
[Federal Register: May 14, 2008 (Volume 73, Number 94)]
[Notices]               
[Page 27878-27882]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14my08-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57801; File No. SR-NYSEArca-2008-31]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Accelerated Approval of Proposed Rule Change Relating to the Listing 
and Trading of Shares of Twelve Actively Managed Exchange-Traded Funds 
of the WisdomTree Trust

May 8, 2008.

I. Introduction

    On April 4, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''), 
through its wholly owned subsidiary, NYSE Arca Equities, Inc. (``NYSE 
Arca Equities''), 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 the shares of twelve actively 
managed exchange-traded funds of the WisdomTree Trust (``Trust'') 
pursuant to NYSE Arca Equities Rule 8.600 (Managed Fund Shares). The 
proposed rule change was published for comment in the Federal Register 
on April 21, 2008 for a 15-day comment period.\3\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57670 (April 15, 
2008), 73 FR 21397.
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II. Description of the Proposal

    The Exchange proposes to list and trade the shares (``Shares'') of 
the following twelve actively managed exchange-traded funds of the 
Trust pursuant to NYSE Arca Equities Rule 8.600 (Managed Fund Shares): 
(1) WisdomTree U.S. Current Income Fund (``Current Income Fund''); (2) 
WisdomTree Dreyfus Australian Dollar Fund; (3) WisdomTree Dreyfus 
Brazilian Real Fund; (4) WisdomTree Dreyfus British Pound Sterling 
Fund; (5) WisdomTree Dreyfus Canadian Dollar Fund; (6) WisdomTree 
Dreyfus Chinese Yuan Fund; (7) WisdomTree Dreyfus Euro Fund; (8) 
WisdomTree Dreyfus Indian Rupee Fund; (9) WisdomTree Dreyfus Japanese 
Yen Fund; (10) WisdomTree Dreyfus New Zealand Dollar Fund; (11) 
WisdomTree Dreyfus South African Rand Fund; and (12) WisdomTree Dreyfus 
South Korean Won Fund (``International Currency Income Funds,'' and 
together with the

[[Page 27879]]

Current Income Fund, collectively, the ``Funds'').
    The Exchange proposes to list and trade the Shares of the Funds 
pursuant to NYSE Arca Equities Rule 8.600, which governs the listing 
and trading of Managed Fund Shares on the Exchange.\4\ Each Fund will 
be an actively managed exchange-traded fund. The Shares will be offered 
by the Trust, which was established as a Delaware statutory trust on 
December 15, 2005 and is registered with the Commission as an 
investment company.\5\
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    \4\ ``Managed Fund Shares'' are securities that: (1) Represent 
an interest in a registered investment company (``Investment 
Company'') organized as an open-end management investment company or 
similar entity, that invests in a portfolio of securities selected 
by the Investment Company's investment adviser consistent with the 
Investment Company's investment objectives and policies; (2) are 
issued in a specified aggregate minimum number in return for a 
deposit of a specified portfolio of securities and/or a cash amount 
with a value equal to the next determined net asset value (``NAV''); 
and (3) when aggregated in the same specified minimum number, may be 
redeemed at a holder's request, which holder will be paid a 
specified portfolio of securities and/or cash with a value equal to 
the next determined NAV. See NYSE Arca Equities Rule 8.600(c)(1) 
(defining Managed Fund Shares). See also Securities Exchange Act 
Release No. 57619 (April 4, 2008), 73 FR 19544 (April 10, 2008) (SR-
NYSEArca-2008-25) (approving, among other things, rules permitting 
the listing and trading of Managed Fund Shares).
    \5\ See Post-Effective Amendment No. 14 to Registration 
Statement on Form N-1A for the Trust (File Nos. 333-132380 and 811-
21864) (``Registration Statement'').
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Description of the Funds and the Shares

    WisdomTree Asset Management, Inc. (``WisdomTree Asset Management'') 
is the investment adviser to each Fund.\6\ The Exchange represents that 
WisdomTree Asset Management is not affiliated with any broker-dealer. 
Mellon Capital Management serves as the sub-adviser for the Current 
Income Fund. The Dreyfus Corporation serves as the sub-adviser to each 
International Currency Income Fund. The Bank of New York is the 
administrator, custodian, and transfer agent for each Fund. ALPS 
Distributors, Inc. serves as the distributor for the Funds.\7\
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    \6\ WisdomTree Investments, Inc. (``WisdomTree Investments'') is 
the parent company of WisdomTree Asset Management.
    \7\ The Exchange states that the Trust has received and been 
granted by Commission order certain exemptive relief under the 
Investment Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act''). In 
compliance with Commentary .05 to NYSE Arca Equities Rule 8.600, 
which applies to Managed Fund Shares based on an international or 
global portfolio, the Trust's application for exemptive relief under 
the 1940 Act states that the Funds will comply with the federal 
securities laws in accepting securities for deposits and satisfying 
redemptions with redemption securities, including that the 
securities accepted for deposits and the securities used to satisfy 
redemption requests are sold in transactions that would be exempt 
from registration under the Securities Act of 1933.
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    The Current Income Fund. The Current Income Fund seeks to earn 
current income while preserving capital and maintaining liquidity by 
investing primarily in very short term, high-quality money market 
securities denominated in U.S. dollars. Eligible investments include 
commercial paper, time deposits and certificates of deposits, asset-
backed securities, government bills, government notes, corporate notes, 
and repurchase agreements. The Current Income Fund intends to maintain 
an average portfolio maturity of 90 days or less and will not purchase 
any money market security with a remaining maturity of more than 397 
calendar days.
    The International Currency Income Funds. Each of the WisdomTree 
Dreyfus Australian Dollar Fund, British Pound Sterling Fund, Canadian 
Dollar Fund, Euro Fund, and Japanese Yen Fund seeks (1) to earn current 
income reflective of money market rates available to foreign investors 
in the specified country or region, and (2) to maintain liquidity and 
preserve capital measured in the currency of the specified country or 
region. Each of these Funds intends to invest primarily in very short 
term, investment grade money market securities denominated in the non-
U.S. currency specified in its name. Eligible investments include 
short-term securities issued by non-U.S. governments, agencies, or 
instrumentalities, bank debt obligations and time deposits, bankers' 
acceptances, commercial paper, short-term corporate debt obligations, 
mortgage-backed securities, and asset-backed securities.
    Each of the WisdomTree Dreyfus Brazilian Real Fund, Chinese Yuan 
Fund, Indian Rupee Fund, New Zealand Dollar Fund, South African Rand 
Fund, and South Korean Won Fund seeks (1) to earn current income 
reflective of money market rates available to foreign investors in the 
specified country, and (2) to provide exposure to changes in the value 
of the designated non-U.S. currency relative to the U.S. dollar. Each 
of these Funds intends to achieve exposure to the non-U.S. market 
designated by its name using the following strategy. Each of the Funds 
will invest primarily in short-term U.S. money market securities. In 
addition, each such Fund will invest a smaller portion of its assets in 
forward currency contracts and swaps\8\ designed to provide exposure to 
exchange rates and/or money market instruments available to foreign 
investors in the non-U.S. market designated in the Fund's name. The 
combination of U.S. money market securities with forward currency 
contracts and currency swaps is designed to create a position 
economically similar to a money market instrument denominated in a non-
U.S. currency.\9\
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    \8\ A forward currency contract is an agreement to buy or sell a 
specific currency at a future date at a price set at the time of the 
contract. A currency swap is an agreement between two parties to 
exchange one currency for another at a future rate.
    \9\ The Exchange states that each of these Funds may pursue its 
objectives through direct investments in money market instruments 
issued by entities in the applicable non-U.S. country and 
denominated in the applicable non-U.S. currency when WisdomTree 
Asset Management believes it is in the best interest of the Fund to 
do so. The decision to secure exposure directly or indirectly will 
be a function of, among other things, market accessibility, credit 
exposure, and tax ramifications for foreign investors. If any of 
these Funds pursues direct investment, eligible investments will 
include short-term securities issued by the applicable foreign 
government and its agencies or instrumentalities, bank debt 
obligations and time deposits, bankers' acceptances, commercial 
paper, short-term corporate debt obligations, mortgage-backed 
securities, and asset-backed securities.
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    Each International Currency Income Fund generally will maintain a 
weighted average portfolio maturity of 90 days or less and will not 
purchase any money market instrument with a remaining maturity of more 
than 397 calendar days. The Exchange represents that none of the Funds 
will invest in non-U.S. equity securities.
    The Shares. Each Fund will issue and redeem Shares on a continuous 
basis at NAV\10\ only in large blocks of shares, typically 50,000 
shares or more (``Creation Units''), in transactions with authorized 
participants. Each International Currency Income Fund may issue and 
redeem Creation Units in exchange for a designated basket of non-U.S. 
currency and an amount of U.S. dollar-denominated cash, a basket of 
non-U.S. money market instruments and a designated amount of cash, or 
simply a designated amount of cash. In addition, creations and 
redemptions of the Current Income Fund and the WisdomTree Dreyfus 
Brazilian Real Fund, Chinese Yuan Fund, Indian Rupee Fund, New Zealand 
Dollar Fund, South African Rand Fund, and South Korean Won Fund would 
usually occur in exchange for a basket of U.S. money market instruments 
and/or a designated amount of cash. Once created, Shares of the Funds 
will trade on the secondary

[[Page 27880]]

market in amounts less than a Creation Unit.
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    \10\ The NAV of each Fund's Shares generally is calculated once 
daily Monday through Friday as of the close of regular trading on 
the New York Stock Exchange LLC, generally 4 p.m. Eastern Time or 
``ET.'' NAV per Share is calculated by dividing a Fund's net assets 
by the number of Fund Shares outstanding. The Exchange states that 
more information regarding the valuation of Fund investments in 
calculating a Fund's NAV can be found in the Registration Statement.
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    More information regarding the Shares and the Funds, including 
investment strategies, risks, creation and redemption procedures, fees, 
portfolio holdings disclosure policies, distributions, and taxes can be 
found in the Registration Statement.\11\
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    \11\ See supra note 5.
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Availability of Information

    The Funds' Web site (http://www.wisdomtree.com), which will be 
publicly available prior to the public offering of the Shares, will 
include a form of the Prospectus for each Fund that may be downloaded. 
The Web site will include additional quantitative information updated 
on a daily basis, including, for each Fund: (1) The prior business 
day's reported NAV, mid-point of the bid/ask spread at the time of 
calculation of such NAV (the ``Bid/Ask Price''),\12\ and a calculation 
of the premium and discount of the Bid/Ask Price against the NAV; and 
(2) data in chart format displaying the frequency distribution of 
discounts and premiums of the daily Bid/Ask Price against the NAV, 
within appropriate ranges, for each of the four previous calendar 
quarters. On each business day, before commencement of the Core Trading 
Session,\13\ the Trust will disclose on its Web site the identities and 
quantities of the portfolio of securities and other assets (the 
``Disclosed Portfolio'')\14\ held by each Fund that will form the basis 
for the Fund's calculation of NAV at the end of the business day.\15\ 
The Web site information will be publicly available at no charge.
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    \12\ The Bid/Ask Price of a Fund is determined using the 
midpoint of the highest bid and the lowest offer on the Exchange as 
of the time of calculation of such Fund's NAV. The records relating 
to Bid/Ask Prices will be retained by the Funds and their service 
providers.
    \13\ The Core Trading Session is 9:30 a.m. to 4 p.m. ET.
    \14\ See NYSE Arca Equities Rule 8.600(c)(2) (defining the 
Disclosed Portfolio for a series of Managed Fund Shares as the 
identities and quantities of the securities and other assets held by 
the Investment Company that will form the basis for the Investment 
Company's calculation of NAV at the end of the business day).
    \15\ Under accounting procedures followed by the Funds, trades 
made on the prior business day (``T'') will be booked and reflected 
in the NAV on the current business day (``T+1''). Notwithstanding 
the foregoing, portfolio trades that are executed prior to the 
opening of the Exchange on any business day may be booked and 
reflected in the NAV on such business day. Accordingly, the Funds 
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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    In addition, for each Fund, an estimated value, defined in Rule 
8.600 as the Portfolio Indicative Value,\16\ will be updated and 
disseminated by the Exchange at least every 15 seconds during the Core 
Trading Session on the Exchange through the facilities of the 
Consolidated Tape Association. The Exchange states that the 
dissemination of the Portfolio Indicative Value, together with the 
Disclosed Portfolio, will allow investors to determine the value of the 
underlying portfolio of a Fund on a daily basis and to provide a close 
estimate of that value throughout the trading day.
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    \16\ NYSE Arca Equities Rule 8.600(c)(3) (defining Portfolio 
Indicative Value as the estimated indicative value of a Managed Fund 
Share based on current information regarding the value of the 
securities and other assets in the Disclosed Portfolio).
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    Information regarding market price and volume of the Shares is and 
will be continually available on a real-time basis throughout the day 
on brokers' computer screens and other electronic services. The 
previous day's closing price and trading volume information will be 
published daily in the financial section of newspapers. Quotation and 
last-sale information for the Shares will be available via the 
facilities of the Consolidated Tape Association.

Initial and Continued Listing

    The Exchange represents that the Shares will be subject to NYSE 
Arca Equities Rule 8.600(d), which sets forth the initial and continued 
listing criteria applicable to Managed Fund Shares.\17\ The Exchange 
further represents that, for initial and/or continued listing, the 
Shares must be in compliance with Rule 10A-3 under the Exchange 
Act,\18\ as provided by NYSE Arca Equities Rule 5.3.
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    \17\ See also supra note 7 (describing the Funds' compliance 
with Commentary .05 to NYSE Arca Equities Rule 8.600).
    \18\ See 17 CFR 240.10A-3.
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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 a Fund. The Shares of the Funds will be halted 
if the ``circuit breaker'' parameters in NYSE Arca Equities Rule 7.12 
are reached. 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 securities comprising the Disclosed Portfolio and/or 
the financial instruments of a Fund; or (2) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. In addition, 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 a Fund may be halted.

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. The 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 states that it has appropriate rules to 
facilitate transactions in the Shares during all such trading sessions. 
The minimum trading increment for the Shares on the Exchange will be 
$0.01.

Surveillance

    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products (which will include 
Managed Fund Shares) 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 surveillance focuses 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 states that 
it may obtain information via the Intermarket Surveillance Group 
(``ISG'') from other exchanges who are members or affiliate members of 
ISG.\19\ In addition, the Exchange also has a general policy 
prohibiting the distribution of material, non-public information by its 
employees.
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    \19\ The Exchange notes that not all of the components of the 
Disclosed Portfolio for each Fund may trade on exchanges that are 
members or affiliate members of ISG.
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Information Bulletin

    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders \20\ in an Information Bulletin (``Bulletin'') of the 
special characteristics and risks associated with trading the Shares. 
Specifically, the

[[Page 27881]]

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),\21\ 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 Portfolio Indicative 
Value will not be calculated or publicly disseminated; (4) how 
information regarding the Portfolio Indicative Value is disseminated; 
(5) the requirement that ETP Holders deliver a prospectus to investors 
purchasing newly issued Shares prior to or concurrently with the 
confirmation of a transaction; and (6) trading information. In 
addition, the Bulletin will reference that the Fund is subject to 
various fees and expenses described in the Registration Statement, 
discuss any exemptive, no-action, and interpretive relief granted by 
the Commission from any rules under the Act, and disclose that the NAV 
for the Shares will be calculated after 4 p.m. ET each trading day.
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    \20\ ETP Holder refers to a sole proprietorship, partnership, 
corporation, limited liability company, or other organization in 
good standing that has been issued an Equity Trading Permit or 
``ETP.'' An ETP Holder must be a registered broker or dealer 
pursuant to Section 15 of the Act. See NYSE Arca Equities Rule 
1.1(n).
    \21\ NYSE Arca Equities Rule 9.2(a) provides that an ETP Holder, 
before recommending a transaction, must have reasonable grounds to 
believe that the recommendation is suitable for the customer based 
on any facts disclosed by the customer as to his other security 
holdings and as to his financial situation and needs. Further, the 
rule provides, with a limited exception, that prior to the execution 
of a transaction recommended to a non-institutional customer, the 
ETP Holder shall make reasonable efforts to obtain information 
concerning the customer's financial status, tax status, investment 
objectives, and any other information that the ETP Holder believes 
would be useful to make a recommendation.
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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 \22\ and the rules and regulations thereunder applicable to a 
national securities exchange.\23\ In particular, the Commission finds 
that the proposal is consistent with section 6(b)(5) of the Act,\24\ 
which requires, among other things, that the Exchange's rules be 
designed to promote just and equitable principles of trade, 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, for the Shares to be listed 
and traded on the Exchange, such Shares must be in compliance with the 
initial and continued listing requirements under NYSE Arca Equities 
Rule 8.600.
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    \22\ 15 U.S.C. 78f.
    \23\ 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).
    \24\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposal to list and trade the 
Shares on the Exchange is consistent with section 11A(a)(1)(C)(iii) of 
the Act,\25\ 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. Quotations and last-sale 
information for the Shares will be disseminated by means of the 
facilities of the Consolidated Tape Association. In addition, the 
Portfolio Indicative Value will be updated and disseminated at least 
every 15 seconds during the Core Trading Session on the Exchange 
through the facilities of the Consolidated Tape Association, and, on 
each business day before commencement of the Core Trading Session, the 
Trust will disseminate the Disclosed Portfolio on its Web site. The 
Commission also notes that information regarding market price and 
volume of the Shares is and will be continually available on a real-
time basis throughout the day on brokers' computer screens and other 
electronic services, and the previous day's closing price and trading 
volume information will be published daily in the financial section of 
newspapers. Additionally, the following information will be available 
on the Funds' Web site (http://www.wisdomtree.com), which will be 
publicly accessible at no charge: (1) The prior business day's reported 
NAV, the Bid/Ask Price, and a calculation of the premium and discount 
of the Bid/Ask Price against the NAV; and (2) data in chart format 
displaying the frequency distribution of discounts and premiums of the 
daily Bid/Ask Price against the NAV, within appropriate ranges, for 
each of the four previous calendar quarters.
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    \25\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    Furthermore, the Commission believes that the proposal to list and 
trade the Shares 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 is required to obtain a 
representation from the Trust, prior to listing, 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.\26\ 
The Exchange may consider the suspension of trading in, or removal from 
listing of, the Shares if the value of the Portfolio Indicative Value 
is no longer calculated or available or the Disclosed Portfolio is not 
made available to all market participants at the same time.\27\ In 
addition, NYSE Arca Equities Rule 8.600(d)(2)(B)(ii) requires that the 
Reporting Authority that provides the Disclosed Portfolio 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. Lastly, the Commission notes that 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 
that, if WisdomTree Asset Management becomes affiliated with a broker-
dealer, WisdomTree Asset Management must erect a firewall between it 
and such broker-dealer with respect to access to information concerning 
the composition and/or changes to the investment portfolio of the 
Funds, in accordance with Commentary .07 to NYSE Arca Equities Rule 
8.600.
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    \26\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \27\ See NYSE Arca Equities Rule 8.600(d)(2)(C)(ii).
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    The Commission further believes that the trading rules and 
procedures to which the Shares will be subject pursuant to this 
proposal are consistent with the Act. The Exchange has represented that 
the Shares are equity securities subject to Exchange's rules governing 
the trading of equity securities.
    In support of this proposal, the Exchange has made the following 
representations:
    1. The Shares will be subject to the initial and continued listing 
criteria applicable to Managed Fund Shares and, for initial and/or 
continued listing, the Shares must comply with Rule 10A-3 under the 
Act,\28\ as provided by NYSE Arca Equities Rule 5.3.
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    \28\ 17 CFR 240.10A-3.
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    2. The Exchange's surveillance procedures are adequate to properly 
monitor the trading of the Shares. Specifically, NYSE Arca will rely on 
its existing surveillance procedures applicable to derivative products, 
which will include Managed Fund Shares.\29\
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    \29\ The Commission notes that none of the Funds will invest in 
non-U.S. equity securities and believes that the Exchange's proposed 
rules and procedures are adequate with respect to the Shares. 
However, the Commission notes that other proposed series of Managed 
Fund Shares may require additional Exchange rules and procedures to 
govern their listing and trading on the Exchange. For example, in 
the case of a proposed series of Managed Fund Shares that are based 
on a portfolio, at least in part, of non-U.S. equity securities, 
rules relating to comprehensive surveillance sharing agreements and 
quantitative initial and continued listing standards may be 
required.

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[[Page 27882]]

    3. Prior to the commencement of trading, the Exchange will inform 
its members and member organizations in an Information Bulletin of 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 Portfolio Indicative Value will not be 
calculated or publicly disseminated; (4) how information regarding the 
Portfolio Indicative Value is disseminated; (5) the requirement that 
ETP Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (6) trading information. In addition, the Information Bulletin will 
reference that the Fund is subject to various fees and expenses 
described in the Registration Statement, discuss any exemptive, no-
action, and interpretive relief granted by the Commission from any 
rules under the Act, and disclose that the NAV for the Shares will be 
calculated after 4:00 p.m. ET each trading day.
    This approval order is based on the Exchange's representations.
    The Commission finds good cause for approving the proposed rule 
change before the 30th day after the date of publication of notice of 
filing thereof in the Federal Register. The Commission notes that the 
investment objectives of the Funds are similar to those applicable to 
other Managed Fund Shares, the listing and trading of which the 
Commission has previously approved for other national securities 
exchanges.\30\ The Commission believes that accelerated approval of the 
proposed rule change should provide additional choices for investors 
in, and promote additional competition in the market for, Managed Fund 
Shares. Therefore, the Commission finds good cause, consistent with 
section 19(b)(2) of the Act, to approve the proposed rule change on an 
accelerated basis.
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    \30\ See, e.g., Securities Exchange Act Release Nos. 57619 
(April 4, 2008), 73 FR 19544 (April 10, 2008) (SR-NYSEArca-2008-25) 
(approving, among other things, the listing and trading of shares of 
the PowerShares Active Low Duration Portfolio, which seeks to exceed 
the total return of the Lehman Brothers 1-3 Year U.S. Treasury Index 
by investing, normally, at least 80% of its assets in a diversified 
portfolio of U.S. government and corporate debt securities); and 
57514 (March 17, 2008), 73 FR 15230 (March 21, 2008) (SR-Amex-2008-
02) (approving the listing and trading of shares of the Bear Stearns 
Current Yield Fund, which seeks to invest primarily in short-term 
debt obligations, including U.S. government securities, bank 
obligations, corporate debt obligations, foreign bank obligations 
(U.S. dollar denominated), foreign corporate debt obligations (U.S. 
dollar denominated), and other financial instruments).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\31\ that the proposed rule change (SR-NYSEArca-2008-31) be, and it 
hereby is, approved on an accelerated basis.
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    \31\ 15 U.S.C. 78s(b)(2).

    \32\ 17 CFR 200.30-3(a)(12).
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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-10724 Filed 5-13-08; 8:45 am]

BILLING CODE 8010-01-P
