[Federal Register Volume 77, Number 200 (Tuesday, October 16, 2012)]
[Notices]
[Pages 63380-63383]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25358]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68030; File No. SR-NYSEArca-2012-88]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of Proposed Rule Change to List and Trade Shares of the 
RiverFront Strategic Income Fund under NYSE Arca Equities Rule 8.600

October 10, 2012.

I. Introduction

    On August 10, 2012, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
list and trade shares (``Shares'') of the RiverFront Strategic Income 
Fund (``Fund'') under NYSE Arca Equities Rule 8.600. The proposed rule 
change was published for comment in the Federal Register on August 28, 
2012.\3\ The Commission received no comments on the proposal. This 
order grants approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 67715 (August 22, 
2012), 77 FR 52083 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange proposes to list and trade the Shares of the Fund 
pursuant to NYSE Arca Equities Rule 8.600, which governs the listing 
and trading of Managed Fund Shares on the Exchange. The Shares will be 
offered by ALPS ETF Trust (``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.\4\ The Fund 
will be managed by WisdomTree Asset Management, Inc. (``WisdomTree'' or 
the ``Adviser''). RiverFront Investment Group, LLC (``RiverFront'') is 
the investment sub-adviser for the Fund (the ``Sub-Adviser''). The 
Exchange represents that, while the Adviser is not affiliated with a 
broker-dealer, the Sub-Adviser is affiliated with a broker-dealer and 
has implemented a fire wall with respect to its broker-dealer affiliate 
regarding access to information concerning the composition and/or 
changes to the portfolio.\5\
---------------------------------------------------------------------------

    \4\ The Trust is registered under the Investment Company Act of 
1940 (``1940 Act''). On February 23, 2012, the Trust filed with the 
Commission an amendment to its registration statement on Form N-1A 
under the Securities Act of 1933 (``Securities Act'') and under the 
1940 Act relating to the Fund (File Nos. 333-148826 and 811-22175) 
(``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. 28471 (October 27, 
2008) (File No. 812-13458).
    \5\ See Commentary .06 to NYSE Arca Equities Rule 8.600. The 
Exchange represents that in the event (a) the Adviser or Sub-Adviser 
becomes newly affiliated with a broker-dealer, or (b) any new 
adviser or sub-adviser becomes affiliated with a broker-dealer, it 
will implement a fire wall with respect to such broker-dealer 
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.
---------------------------------------------------------------------------

RiverFront Strategic Income Fund

    The investment objective of the Fund is to seek total return with 
an emphasis on income as the source of that total return by investing 
in a global portfolio of fixed income securities of various maturities, 
ratings and currency denominations. The Fund intends to utilize various 
investment strategies in a broad array of fixed income sectors. The 
Fund will allocate its investments based upon the analysis of the Sub-
Adviser of the pertinent economic and market conditions, as well as 
yield, maturity and currency considerations.
    The Fund may purchase fixed income securities issued by U.S. or 
foreign corporations \6\ or financial institutions, including debt 
securities of all types and maturities, convertible securities and 
preferred stocks. The Fund also may purchase securities issued or 
guaranteed by the U.S. Government or foreign governments (including 
foreign states, provinces and municipalities) or their agencies and 
instrumentalities or issued or guaranteed by international 
organizations designated or supported

[[Page 63381]]

by multiple government entities to promote economic reconstruction or 
development. The average maturity or duration of the Fund's portfolio 
of fixed income securities will vary based on the Sub-Adviser's 
assessment of economic and market conditions.
---------------------------------------------------------------------------

    \6\ The Fund will invest only in securities that the Adviser or 
Sub-Adviser deems to be sufficiently liquid. While foreign corporate 
debt generally must have $200 million or more par amount outstanding 
and significant par value traded to be considered as an eligible 
investment, at least 80% of issues of foreign corporate debt held by 
the Fund will have $200 million or more par amount outstanding.
---------------------------------------------------------------------------

    The Fund may invest in mortgage-backed securities (``MBS'') issued 
or guaranteed by federal agencies and/or U.S. government sponsored 
instrumentalities, such as the Government National Mortgage 
Administration (``Ginnie Mae''), the Federal Housing Administration 
(``FHA''), the Federal National Mortgage Association (``Fannie Mae'') 
and the Federal Home Loan Mortgage Corporation (``Freddie Mac'').\7\ 
The MBS in which the Fund may invest will be either pass-through 
securities or collateralized mortgage obligations (``CMOs'').\8\ The 
Fund may purchase or sell securities on a when issued, delayed delivery 
or forward commitment basis. The Fund may also invest in other fixed 
income investment companies, including exchange-traded funds (``ETFs'') 
\9\ and/or closed-end funds.
---------------------------------------------------------------------------

    \7\ A third-party pricing service will be used to value some or 
all of the Fund's MBS.
    \8\ Pass-through securities represent a right to receive 
principal and interest payments collected on a pool of mortgages, 
which are passed through to security holders. CMOs are created by 
dividing the principal and interest payments collected on a pool of 
mortgages into several revenue streams (tranches) with different 
priority rights to portions of the underlying mortgage payments. The 
Fund will not invest in CMO tranches which represent a right to 
receive interest only (``IOs''), principal only (``POs'') or an 
amount that remains after other floating-rate tranches are paid (an 
inverse floater). If the Fund invests in CMO tranches (including CMO 
tranches issued by government agencies) and interest rates move in a 
manner not anticipated by Fund management, it is possible that the 
Fund could lose all or substantially all of its investment.
    \9\ The Fund will not invest in leveraged or leveraged inverse 
ETFs.
---------------------------------------------------------------------------

    The Fund may invest without limitation in debt securities 
denominated in foreign currencies and in U.S. dollar-denominated debt 
securities of foreign issuers, including securities of issuers located 
in emerging markets. The Sub-Adviser may attempt to reduce currency 
risk by entering into contracts with banks, brokers or dealers to 
purchase or sell securities or foreign currencies at a future date 
(``forward contracts''). The Fund may enter into foreign currency 
forward and foreign currency futures contracts to facilitate local 
securities settlements or to protect against currency exposure in 
connection with its distributions to shareholders.
    The Fund has not established any credit rating criteria for the 
fixed income securities in which it may invest, and it may invest 
entirely in high yield securities (``junk bonds''). Junk bonds are debt 
securities that are rated below investment grade by nationally 
recognized statistical rating organizations (``NRSROs''), or are 
unrated securities that the Sub-Adviser believes are of comparable 
quality. The Sub-Adviser considers the credit ratings assigned by 
NRSROs as one of several factors in its independent credit analysis of 
issuers.
    The Fund may also invest in money market instruments, including 
repurchase agreements or other funds which invest exclusively in money 
market instruments, structured notes (notes on which the amount of 
principal repayment and interest payments are based on the movement of 
one or more specified factors, such as the movement of a particular 
bond or bond index), and, in accordance with the Exemptive Order, in 
swaps, options and futures contracts. The Fund may also invest in 
municipal securities. The Fund may invest up to 5% of its assets in MBS 
(which may include commercial mortgage-backed securities (``CMBS'')) or 
other asset-backed securities issued or guaranteed by private issuers. 
The Fund may also invest in money market instruments or other short-
term fixed income instruments as part of a temporary defensive strategy 
to protect against temporary market declines.
    The Fund may invest in commercial paper and other short-term 
corporate instruments.\10\ The Fund may purchase participations in 
corporate loans. Participation interests generally will be acquired 
from a commercial bank or other financial institution (a ``Lender'') or 
from other holders of a participation interest (a ``Participant''). The 
purchase of a participation interest either from a Lender or a 
Participant will not result in any direct contractual relationship with 
the borrowing company (the ``Borrower''). The Fund generally will have 
no right directly to enforce compliance by the Borrower with the terms 
of the credit agreement. Instead, the Fund will be required to rely on 
the Lender or the Participant that sold the participation interest, 
both for the enforcement of the Fund's rights against the Borrower and 
for the receipt and processing of payments due to the Fund under the 
loans. Under the terms of a participation interest, the Fund may be 
regarded as a member of the Participant, and thus the Fund is subject 
to the credit risk of both the Borrower and a Participant. 
Participation interests are generally subject to restrictions on 
resale. Generally, the Fund considers participation interests to be 
illiquid and therefore subject to the Fund's percentage limitations for 
investments in illiquid securities.
---------------------------------------------------------------------------

    \10\ Commercial paper consists of short-term promissory notes 
issued primarily by corporations. Commercial paper may be traded in 
the secondary market after its issuance. As of July 31, 2012, the 
amount of commercial paper outstanding (seasonally adjusted) was 
approximately $1000.5 billion. See http://www.federalreserve.gov/releases/CP/default.htm.
---------------------------------------------------------------------------

    The Fund may invest in securities that have variable or floating 
interest rates which are readjusted on set dates (such as the last day 
of the month or calendar quarter) in the case of variable rates or 
whenever a specified interest rate change occurs in the case of a 
floating rate instrument. Variable or floating interest rates generally 
reduce changes in the market price of securities from their original 
purchase price because, upon readjustment, such rates approximate 
market rates. Accordingly, as interest rates decrease or increase, the 
potential for capital appreciation or depreciation is less for variable 
or floating rate securities than for fixed rate obligations. Many 
securities with variable or floating interest rates purchased by the 
Fund are subject to payment of principal and accrued interest (usually 
within seven days) on the Fund's demand. The terms of such demand 
instruments require payment of principal and accrued interest by the 
issuer, a guarantor and/or a liquidity provider. The Sub-Adviser will 
monitor the pricing, quality and liquidity of the variable or floating 
rate securities held by the Fund.
    The Fund may enter into repurchase agreements, which are agreements 
pursuant to which securities are acquired by the Fund from a third 
party with the understanding that they will be repurchased by the 
seller at a fixed price on an agreed date. These agreements may be made 
with respect to any of the portfolio securities in which the Fund is 
authorized to invest. Repurchase agreements may be characterized as 
loans secured by the underlying securities.
    The Fund may enter into reverse repurchase agreements, which 
involve the sale of securities with an agreement to repurchase the 
securities at an agreed-upon price, date and interest payment and have 
the characteristics of borrowing. The securities purchased with the 
funds obtained from the agreement and securities collateralizing the 
agreement will have maturity dates no later than the repayment date.
    The Fund may purchase when-issued securities. Purchasing securities 
on a ``when-issued'' basis means that the date for delivery of and 
payment for the securities is not fixed at the date of purchase, but is 
set after the securities

[[Page 63382]]

are issued. The payment obligation and, if applicable, the interest 
rate that will be received on the securities are fixed at the time the 
buyer enters into the commitment. The Fund will only make commitments 
to purchase such securities with the intention of actually acquiring 
such securities, but the Fund may sell these securities before the 
settlement date if it is deemed advisable.
    The Fund may not hold more than 15% of its net assets in: (1) 
Illiquid securities (which include participation interests); and (2) 
Rule 144A securities.\11\ 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 securities. Illiquid securities 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\
---------------------------------------------------------------------------

    \11\ Rule 144A securities are securities which, while privately 
placed, are eligible for purchase and resale pursuant to Rule 144A. 
According to the Registration Statement, Rule 144A permits certain 
qualified institutional buyers, such as the Fund, to trade in 
privately placed securities even though such securities are not 
registered under the Securities Act.
    \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).
---------------------------------------------------------------------------

    The Shares will conform to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents 
that, for initial and/or continued listing, the Fund will be in 
compliance with Rule 10A-3 \13\ under the Exchange 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 net asset value (``NAV'') and the Disclosed Portfolio will be 
made available to all market participants at the same time. The Fund's 
investments will be consistent with the Fund's investment objective and 
will not be used to enhance leverage. The Fund will not invest in non-
US equity securities.
---------------------------------------------------------------------------

    \13\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    Additional information regarding the Trust and the Shares, 
including investment strategies, risks, creation and redemption 
procedures, fees, portfolio holdings disclosure policies, distributions 
and taxes, among other things, can be found in the Notice and 
Registration Statement, as applicable.\14\
---------------------------------------------------------------------------

    \14\ See Notice and Registration Statement, supra notes 3 and 4, 
respectively.
---------------------------------------------------------------------------

III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of Section 6 of the 
Act \15\ and the rules and regulations thereunder applicable to a 
national securities exchange.\16\ In particular, the Commission finds 
that the proposal is consistent with Section 6(b)(5) of the Act,\17\ 
which requires, among other things, that the Exchange's rules be 
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, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. The Commission notes that 
the Fund and the Shares must comply with the requirements of NYSE Arca 
Equities Rule 8.600 to be listed and traded on the Exchange.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission finds that the proposal to list and trade the Shares 
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the 
Act,\18\ which sets forth Congress' finding that it is in the public 
interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares will be available via the Consolidated 
Tape Association (``CTA'') high-speed line. In addition, the Portfolio 
Indicative Value (``PIV''), as defined in NYSE Arca Equities Rule 
8.600(c)(3), will be widely disseminated by one or more major market 
data vendors at least every 15 seconds during the Exchange's Core 
Trading Session.\19\ On each business day before commencement of 
trading in Shares in the Core Trading Session on the Exchange, the Fund 
will disclose on its Web site the Disclosed Portfolio, as defined in 
NYSE Arca Equities Rule 8.600(c)(2), that will form the basis for the 
Fund's calculation of the net asset value (``NAV'') at the end of the 
business day.\20\ The Fund's custodian will calculate the NAV per Share 
as of the close of normal trading on the New York Stock Exchange 
(normally, 4:00 p.m. Eastern Time) on each day that such exchange is 
open. In addition, 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 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. The Web site for the Fund will 
include a form of the prospectus for the Fund, additional data relating 
to NAV, and other applicable quantitative information. Intra-day and 
end-of-day prices for all debt securities or other financial 
instruments held by the Fund will be available through major market 
data vendors and broker-dealers. Further, a basket composition file 
disclosing the Fund's portfolio securities that will be applicable that 
day to redemption requests, which includes the security names and share 
quantities required to be delivered in exchange for Fund Shares, 
together with estimates and actual cash components, will be publicly 
disseminated daily prior to the opening of the NYSE via the National 
Securities Clearing Corporation. The basket represents one ``Creation 
Unit'' of the Fund.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \19\ According to the Exchange, several major market data 
vendors widely disseminate PIVs taken from CTA or other data feeds. 
See Notice, supra note 3, 77 FR 52083 at 52087.
    \20\ On a daily basis, the Adviser will disclose for each 
portfolio security and other financial instrument of the Fund the 
following information on the Fund's Web site: ticker symbol (if 
applicable), name of security and financial instrument, number of 
shares, if applicable, and dollar value of financial instruments 
held in the portfolio, and percentage weighting of the security and 
financial instrument in the portfolio. The Web site information will 
be publicly available at no charge.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade 
the Shares

[[Page 63383]]

is reasonably designed to promote fair disclosure of information that 
may be necessary to price the Shares appropriately and to prevent 
trading when a reasonable degree of transparency cannot be assured. The 
Commission notes that 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 will be made 
available to all market participants at the same time.\21\ In addition, 
the Exchange will halt trading in the Shares under the specific 
circumstances set forth in NYSE Arca Equities Rule 8.600(d)(2)(D), and 
may halt trading in the Shares if trading is not occurring in the 
securities and/or the financial instruments comprising the Disclosed 
Portfolio of the Fund, or if other unusual conditions or circumstances 
detrimental to the maintenance of a fair and orderly market are 
present.\22\ The Exchange will consider the suspension of trading in or 
removal from listing of the Shares if the PIV is no longer calculated 
or available or the Disclosed Portfolio is not made available to all 
market participants at the same time.\23\ The Exchange represents that 
the Adviser is not affiliated with a broker-dealer. The Exchange 
further represents that the Sub-Adviser is affiliated with a broker-
dealer and has implemented a fire wall with respect to its broker-
dealer affiliate regarding access to information concerning the 
composition and/or changes to the portfolio.\24\ The Commission notes 
that Adviser and Sub-Adviser personnel who make decisions on the Fund's 
portfolio composition must be subject to procedures designed to prevent 
the use and dissemination of material, non-public information regarding 
the Fund's portfolio.\25\ Further, the Commission notes that the 
Reporting Authority that provides the Disclosed Portfolio must 
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 portfolio.\26\ The Exchange 
states that it has a general policy prohibiting the distribution of 
material, non-public information by its employees. While not all 
components of the Disclosed Portfolio for the Fund may trade on markets 
that are members of the Intermarket Surveillance Group (``ISG'') or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement, the Exchange may obtain information via the ISG from 
other exchanges that are members of ISG or with which the Exchange has 
entered into a surveillance sharing agreement.
---------------------------------------------------------------------------

    \21\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \22\ 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. 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.
    \23\ See NYSE Arca Equities Rule 8.600(d)(2)(C)(ii).
    \24\ See supra note 5 and accompanying text. The Commission 
notes that an investment adviser to an open-end fund is required to 
be registered under the Investment Advisers Act of 1940 (``Advisers 
Act''). As a result, the Adviser, the Sub-Adviser, and their 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.
    \25\ See Commentary .06 to NYSE Arca Equities Rule 8.600.
    \26\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
---------------------------------------------------------------------------

    The Exchange further represents that the Shares are deemed to be 
equity securities, thus rendering trading in the Shares subject to the 
Exchange's existing rules governing the trading of equity securities. 
In support of this proposal, the Exchange has made representations, 
including:
    (1) The Shares will conform to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.
    (3) The Exchange's surveillance procedures applicable to derivative 
products, which include Managed Fund Shares, 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.
    (4) Prior to the commencement of trading, the Exchange will inform 
its Equity Trading Permit Holders in an Information Bulletin 
(``Bulletin'') of the special characteristics and risks associated with 
trading the Shares. Specifically, the Bulletin will discuss the 
following: (a) The procedures for purchases and redemptions of Shares 
in Creation Unit aggregations (and that Shares are not individually 
redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty 
of due diligence on its Equity Trading Permit Holders to learn the 
essential facts relating to every customer prior to trading the Shares; 
(c) the risks involved in trading the Shares during the Opening and 
Late Trading Sessions when an updated PIV will not be calculated or 
publicly disseminated; (d) how information regarding the PIV is 
disseminated; (e) the requirement that Equity Trading Permit Holders 
deliver a prospectus to investors purchasing newly issued Shares prior 
to or concurrently with the confirmation of a transaction; and (f) 
trading information.
    (5) For initial and/or continued listing, the Fund will be in 
compliance with Rule 10A-3 under the Act,\27\ as provided by NYSE Arca 
Equities Rule 5.3.
---------------------------------------------------------------------------

    \27\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) The Fund may not hold more than an aggregate amount of 15% of 
its net assets in illiquid securities (which include participation 
interests), including Rule 144A securities.
    (7) The Fund will not invest in non-U.S. equity securities.
    (8) The Fund's investments will be consistent with the Fund's 
investment objective and will not be used to enhance leverage.
    (9) A minimum of 100,000 Shares of each Fund will be outstanding at 
the commencement of trading on the Exchange.

This approval order is based on the Exchange's representations and 
description of the Fund, including those set forth above and in the 
Notice.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \28\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\29\ that the proposed rule change (SR-NYSEArca-2012-88) be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
---------------------------------------------------------------------------

    \30\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25358 Filed 10-15-12; 8:45 am]
BILLING CODE 8011-01-P