
[Federal Register Volume 76, Number 183 (Wednesday, September 21, 2011)]
[Notices]
[Pages 58549-58553]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-24175]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65344; File No. SR-NYSEArca-2011-48]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a 
Proposed Rule Change To List and Trade Shares of the Teucrium Wheat 
Fund, the Teucrium Soybean Fund and the Teucrium Sugar Fund Under NYSE 
Arca Equities Rule 8.200, Commentary .02

September 15, 2011.

I. Introduction

    On July 11, 2011, 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 of the Teucrium Wheat Fund, the Teucrium Soybean 
Fund, and the Teucrium Sugar Fund under Commentary .02 to NYSE Arca 
Equities Rule 8.200. The proposed rule change was published for comment 
in the Federal Register on August 1, 2011.\3\ The Commission received 
no comments on the proposal. This order grants approval of the proposed 
rule change.
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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. 64967 (July 26, 
2011), 76 FR 45885 (``Notice'').
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II. Description of the Proposed Rule Change

    The Exchange proposes to list and trade shares (``Shares'') of the 
Teucrium Wheat Fund, the Teucrium Soybean Fund, and the Teucrium Sugar 
Fund (each a ``Fund'' and, collectively, ``Funds'') \4\ pursuant to 
NYSE Arca Equities Rule 8.200, Commentary .02, which permits the 
trading of Trust Issued Receipts either by listing or pursuant to 
unlisted trading privileges.\5\ The Funds are commodity pools that are 
series of the Teucrium Commodity Trust (``Trust''), a Delaware 
statutory trust. The Funds are managed and controlled by Teucrium 
Trading, LLC (``Sponsor''). The Sponsor is a Delaware limited liability 
company that is registered as a commodity pool operator with the 
Commodity Futures Trading Commission (``CFTC'') and is a member of the 
National Futures Association.
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    \4\ See Amendment No. 3 to Form S-1 for Teucrium Commodity 
Trust, dated June 3, 2011 (File No. 333-167591) relating to the 
Teucrium Wheat Fund; Amendment No. 3 to Form S-1 for Teucrium 
Commodity Trust, dated June 3, 2011 (File No. 333-167590) relating 
to the Teucrium Soybean Fund; and Amendment No. 3 to Form S-1 for 
Teucrium Commodity Trust, dated June 3, 2011 (File No. 333-167585) 
relating to the Teucrium Sugar Fund (each, a ``Registration 
Statement,'' and, collectively, the ``Registration Statements'').
    \5\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to 
Trust Issued Receipts 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.
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Teucrium Wheat Fund

    The investment objective of the Teucrium Wheat Fund is to have the 
daily changes in percentage terms of the Shares' net asset value 
(``NAV'') reflect the daily changes in percentage terms of a weighted 
average of the closing settlement prices for three futures contracts 
for wheat (wheat futures contracts generally referred to herein as 
``Wheat Futures Contracts'') that are traded on the Chicago Board of 
Trade (``CBOT''), specifically: (1) The second-to-expire CBOT Wheat 
Futures Contract, weighted 35%; (2) the third-to-expire CBOT Wheat 
Futures Contract, weighted 30%; and (3) the CBOT Wheat Futures Contract 
expiring in the December following the expiration month of the third-
to-expire contract, weighted 35%. The weighted average of the three 
above-referenced Wheat Futures Contracts is referred to herein as the 
``Wheat Benchmark,'' and the three Wheat Futures Contracts that at any 
given time make up the Wheat Benchmark are referred to herein as the 
``Wheat Benchmark Component Futures Contracts.''
    The Fund seeks to achieve its investment objective by investing 
under normal market conditions in Wheat Benchmark Component Futures 
Contracts or, in certain circumstances, in other Wheat Futures 
Contracts traded on the CBOT, the Kansas City Board of Trade 
(``KCBT''), or the Minneapolis Grain Exchange (``MGEX''), or Wheat 
Futures Contracts traded on foreign exchanges. In addition, and to a 
limited extent, the Fund also may invest in exchange-traded options on 
Wheat Futures Contracts, and in wheat-based swap agreements that are 
cleared through the CBOT or its affiliated provider of clearing 
services (``Cleared Wheat Swaps'') in furtherance of the Fund's 
investment objective. Specifically, once position limits in CBOT Wheat 
Futures Contracts are reached, the Fund's intention is to invest first 
in Cleared Wheat Swaps to the extent permitted under the position 
limits applicable to Cleared Wheat Swaps and appropriate in light of 
the liquidity in the Cleared Wheat Swaps market, and then, using its 
commercially reasonable judgment, in other Wheat Futures Contracts 
(i.e., Wheat Futures Contracts traded on KCBT, MGEX or traded on 
foreign exchanges) or instruments such as cash-settled options on Wheat 
Futures Contracts and forward contracts, swaps other than Cleared Wheat 
Swaps, and other over-the-counter transactions that are based on the 
price of wheat and Wheat Futures Contracts (collectively, ``Other Wheat 
Interests,'' and together with Wheat Futures Contracts and Cleared 
Wheat Swaps, ``Wheat Interests''). By utilizing certain or all of these 
investments, the Sponsor will endeavor to cause the Fund's performance 
to closely track that of the Wheat Benchmark.
    The Fund seeks to achieve its investment objective primarily by 
investing in Wheat Interests such that daily changes in the Fund's NAV 
will be expected to closely track the changes in the Wheat Benchmark. 
The Fund's positions in Wheat Interests will be changed or ``rolled'' 
on a regular basis in order to track the changing nature of the Wheat 
Benchmark. For example, five times a year (on the date on which a Wheat 
Futures Contract expires), the second-to-expire Wheat Futures Contract 
will become the next-to-expire Wheat Futures Contract and will no 
longer be a Wheat Benchmark Component Futures Contract, and the Fund's 
investments will have to be changed accordingly.\6\
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    \6\ For each of the Funds, in order that the Fund's trading does 
not cause unwanted market movements and to make it more difficult 
for third parties to profit by trading based on such expected market 
movements, the Fund's investments typically will not be rolled 
entirely on that day, but rather will typically be rolled over a 
period of several days.
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    Consistent with achieving the Fund's investment objective of 
closely tracking the Wheat Benchmark, the Sponsor may for certain 
reasons cause the Fund to enter into or hold Cleared Wheat Swaps and/or 
Other Wheat Interests. For example, certain Cleared Wheat Swaps have 
standardized terms similar to, and are priced by reference to, a 
corresponding Wheat Benchmark

[[Page 58550]]

Component Futures Contract. Additionally, Other Wheat Interests that do 
not have standardized terms and are not exchange-traded (``over-the-
counter'' Wheat Interests), can generally be structured as the parties 
desire. Therefore, the Fund might enter into multiple Cleared Wheat 
Swaps and/or over-the-counter Wheat Interests intended to exactly 
replicate the performance of each of the three Wheat Benchmark 
Component Futures Contracts, or a single over-the-counter Wheat 
Interest designed to replicate the performance of the Wheat Benchmark 
as a whole. Assuming that there is no default by a counterparty to an 
over-the-counter Wheat Interest, the performance of the over-the-
counter Wheat Interest will necessarily correlate exactly with the 
performance of the Wheat Benchmark or the applicable Wheat Benchmark 
Component Futures Contract.\7\ The Fund might also enter into or hold 
over-the-counter Wheat Interests to facilitate effective trading. In 
addition, the Fund might enter into or hold over-the-counter Wheat 
Interests that would be expected to alleviate overall deviation between 
the Fund's performance and that of the Wheat Benchmark that may result 
from certain market and trading inefficiencies or other reasons.
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    \7\ Each of the Funds face the risk of non-performance by the 
counterparties to over-the-counter contracts. Unlike in futures 
contracts, the counterparty to these contracts is generally a single 
bank or other financial institution, rather than a clearing 
organization backed by a group of financial institutions. As a 
result, there will be greater counterparty credit risk in these 
transactions. The creditworthiness of each potential counterparty 
will be assessed by the Sponsor. The Sponsor will assess or review, 
as appropriate, the creditworthiness of each potential or existing 
counterparty to an over-the-counter contract pursuant to guidelines 
approved by the Sponsor. The creditworthiness of existing 
counterparties will be reviewed periodically by the Sponsor.
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    The Fund will invest in Wheat Interests to the fullest extent 
possible without being leveraged or unable to satisfy its expected 
current or potential margin or collateral obligations with respect to 
its investments in Wheat Interests.\8\ After fulfilling such margin and 
collateral requirements, the Fund will invest the remainder of its 
proceeds from the sale of baskets in obligations of the United States 
government (``Treasury Securities'') or cash equivalents, and/or hold 
such assets in cash (generally in interest-bearing accounts). 
Therefore, the focus of the Sponsor in managing the Fund is investing 
in Wheat Interests and in Treasury Securities, cash and/or cash 
equivalents. Each of the Funds will earn interest income from the 
Treasury Securities and/or cash equivalents that it purchases and on 
the cash it holds through each Fund's custodian, the Bank of New York 
Mellon (``Custodian'' or ``Administrator'').
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    \8\ The Sponsor represents that the Fund will invest in Wheat 
Interests in a manner consistent with the Fund's investment 
objective and not to achieve additional leverage.
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Teucrium Soybean Fund

    The investment objective of the Teucrium Soybean Fund is to have 
the daily changes in percentage terms of the Shares' NAV reflect the 
daily changes in percentage terms of a weighted average of the closing 
settlement prices for three futures contracts for soybeans (soybean 
futures contracts generally referred to herein as ``Soybean Futures 
Contracts'') that are traded on the CBOT. Generally, the three Soybean 
Futures Contracts will be: (1) Second-to-expire CBOT Soybean Futures 
Contract, weighted 35%; (2) the third-to-expire CBOT Soybean Futures 
Contract, weighted 30%; and (3) the CBOT Soybean Futures Contract 
expiring in the November following the expiration month of the third-
to-expire contract, weighted 35%. The weighted average of the three 
above-referenced Soybean Futures Contracts is referred to herein as the 
``Soybean Benchmark,'' and the three Soybean Futures Contracts that at 
any given time make up the Soybean Benchmark are referred to herein as 
the ``Soybean Benchmark Component Futures Contracts.''
    The Fund seeks to achieve its investment objective by investing 
under normal market conditions in Soybean Benchmark Component Futures 
Contracts or, in certain circumstances, in other Soybean Futures 
Contracts traded on CBOT or Soybean Futures Contracts traded on foreign 
exchanges. In addition, and to a limited extent, the Fund also may 
invest in exchange-traded options on Soybean Futures Contracts and in 
soybean-based swap agreements that are cleared through the CBOT or its 
affiliated provider of clearing services (``Cleared Soybean Swaps'') in 
furtherance of the Fund's investment objective. Specifically, once CBOT 
position limits in Soybean Futures Contracts are reached, the Fund's 
intention is to invest first in Cleared Soybean Swaps to the extent 
permitted under the CBOT position limits applicable to Cleared Soybean 
Swaps and appropriate in light of the liquidity in the Cleared Soybean 
Swaps market, and then, using its commercially reasonable judgment, in 
other Soybean Futures Contracts (i.e., Soybean Futures Contracts traded 
on foreign exchanges) and instruments such as cash-settled options on 
Soybean Futures Contracts and forward contracts, swaps other than 
Cleared Soybean Swaps, and other over-the-counter transactions that are 
based on the price of soybeans and Soybean Futures Contracts 
(collectively, ``Other Soybean Interests,'' and together with Soybean 
Futures Contracts and Cleared Soybean Swaps, ``Soybean Interests'').
    The Fund seeks to achieve its investment objective primarily by 
investing in Soybean Interests such that daily changes in the Fund's 
NAV will be expected to closely track the changes in the Soybean 
Benchmark. The Fund's positions in Soybean Interests will be changed or 
``rolled'' on a regular basis in order to track the changing nature of 
the Soybean Benchmark. For example, five times a year (on the date on 
which certain Soybean Futures Contracts expire), a particular Soybean 
Futures Contract will no longer be a Soybean Benchmark Component 
Futures Contract, and the Fund's investments will have to be changed 
accordingly.
    Consistent with achieving the Fund's investment objective of 
closely tracking the Soybean Benchmark, the Sponsor may for certain 
reasons cause the Fund to enter into or hold Cleared Soybean Swaps and/
or Other Soybean Interests. For example, certain Cleared Soybean Swaps 
have standardized terms similar to, and are priced by reference to, a 
corresponding Soybean Benchmark Component Futures Contract. 
Additionally, Other Soybean Interests that do not have standardized 
terms and are not exchange-traded (``over-the-counter'' Soybean 
Interests) can generally be structured as the parties desire. 
Therefore, the Fund might enter into multiple Cleared Soybean Swaps 
and/or over-the-counter Soybean Interests intended to exactly replicate 
the performance of each of the three Soybean Benchmark Component 
Futures Contracts, or a single over-the-counter Soybean Interest 
designed to replicate the performance of the Soybean Benchmark as a 
whole. Assuming that there is no default by a counterparty to an over-
the-counter Soybean Interest, the performance of the over-the-counter 
Soybean Interest will necessarily correlate exactly with the 
performance of the Soybean Benchmark or the applicable Soybean 
Benchmark Component Futures Contract. The Fund might also enter into or 
hold over-the-counter Soybean Interests to facilitate effective 
trading, consistent with the discussion of the Fund's ``roll'' strategy 
in the preceding paragraph. In addition, the Fund might enter into or 
hold over-the-counter Soybean Interests that would be expected to 
alleviate overall deviation between the Fund's

[[Page 58551]]

performance and that of the Soybean Benchmark that may result from 
certain market and trading inefficiencies or other reasons.
    The Fund will invest in Soybean Interests to the fullest extent 
possible without being leveraged or unable to satisfy its expected 
current or potential margin or collateral obligations with respect to 
its investments in Soybean Interests.\9\ After fulfilling such margin 
and collateral requirements, the Fund will invest the remainder of its 
proceeds from the sale of baskets in Treasury Securities or cash 
equivalents, and/or hold such assets in cash (generally in interest-
bearing accounts). Therefore, the focus of the Sponsor in managing the 
Fund is investing in Soybean Interests and in Treasury Securities, cash 
and/or cash equivalents.
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    \9\ The Sponsor represents that the Fund will invest in Soybean 
Interests in a manner consistent with the Fund's investment 
objective and not to achieve additional leverage.
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Teucrium Sugar Fund

    The investment objective of the Teucrium Sugar Fund is to have the 
daily changes in percentage terms of the Shares' NAV reflect the daily 
changes in percentage terms of a weighted average of the closing 
settlement prices for three futures contracts for sugar (sugar futures 
contracts generally referred to herein as ``Sugar Futures Contracts'') 
that are traded on ICE Futures US (``ICE Futures''), specifically: (1) 
The second-to-expire Sugar No. 11 Futures Contract (a ``Sugar No. 11 
Futures Contract''), weighted 35%; (2) the third-to-expire Sugar No. 11 
Futures Contract, weighted 30%; and (3) the Sugar No. 11 Futures 
Contract expiring in the March following the expiration month of the 
third-to-expire contract, weighted 35%. The weighted average of the 
three above-referenced Sugar No. 11 Futures Contracts is referred to 
herein as the ``Sugar Benchmark,'' and the three Sugar No. 11 Futures 
Contracts that at any given time make up the Sugar Benchmark are 
referred to herein as the ``Sugar Benchmark Component Futures 
Contracts.''
    The Fund seeks to achieve its investment objective by investing 
under normal market conditions in Sugar Benchmark Component Futures 
Contracts or, in certain circumstances, in other Sugar Futures 
Contracts traded on ICE Futures or the New York Mercantile Exchange 
(``NYMEX''), or Sugar Futures Contracts traded on foreign exchanges. In 
addition, and to a limited extent, the Fund also may invest in 
exchange-traded options on Sugar Futures Contracts and in sugar-based 
swap agreements that are cleared through ICE Futures or its affiliated 
provider of clearing services (``Cleared Sugar Swaps'') in furtherance 
of the Fund's investment objective. Specifically, once accountability 
levels in Sugar No. 11 Futures Contracts traded on ICE Futures are 
reached, the Fund's intention is to invest first in Cleared Sugar Swaps 
to the extent permitted under the accountability levels applicable to 
Cleared Sugar Swaps and appropriate in light of the liquidity in the 
Cleared Sugar Swaps market, and then, using its commercially reasonable 
judgment, in other Sugar Futures Contracts (i.e., Sugar Futures 
Contracts traded on the NYMEX or foreign exchanges) and instruments 
such as cash-settled options on Sugar Futures Contracts and forward 
contracts, swaps other than Cleared Sugar Swaps, and other over-the-
counter transactions that are based on the price of sugar and Sugar 
Futures Contracts (collectively, ``Other Sugar Interests,'' and 
together with Sugar Futures Contracts and Cleared Sugar Swaps, ``Sugar 
Interests'').
    The Fund seeks to achieve its investment objective primarily by 
investing in Sugar Interests such that daily changes in the Fund's NAV 
will be expected to closely track the changes in the Sugar Benchmark. 
The Fund's positions in Sugar Interests will be changed or ``rolled'' 
on a regular basis in order to track the changing nature of the Sugar 
Benchmark. For example, four times a year (on the date on which a Sugar 
No. 11 Futures Contract expires), a particular Sugar No. 11 Futures 
Contract will no longer be a Sugar Benchmark Component Futures 
Contract, and the Fund's investments will have to be changed 
accordingly.
    Consistent with achieving the Fund's investment objective of 
closely tracking the Sugar Benchmark, the Sponsor may for certain 
reasons cause the Fund to enter into or hold Cleared Sugar Swaps and/or 
Other Sugar Interests. For example, certain Cleared Sugar Swaps have 
standardized terms similar to, and are priced by reference to, a 
corresponding Sugar Benchmark Component Futures Contract. Additionally, 
Other Sugar Interests that do not have standardized terms and are not 
exchange-traded, referred to as ``over-the-counter'' Sugar Interests, 
can generally be structured as the parties desire. Therefore, the Fund 
might enter into multiple Cleared Sugar Swaps and/or over-the-counter 
Sugar Interests intended to exactly replicate the performance of each 
of the three Sugar Benchmark Component Futures Contracts, or a single 
over-the-counter Sugar Interest designed to replicate the performance 
of the Sugar Benchmark as a whole. Assuming that there is no default by 
a counterparty to an over-the-counter Sugar Interest, the performance 
of the over-the-counter Sugar Interest will necessarily correlate 
exactly with the performance of the Sugar Benchmark or the applicable 
Sugar Benchmark Component Futures Contract. The Fund might also enter 
into or hold over-the-counter Sugar Interests other than Sugar 
Benchmark Component Futures Contracts to facilitate effective trading, 
consistent with the discussion of the Fund's ``roll'' strategy in the 
preceding paragraph. In addition, the Fund might enter into or hold 
over-the-counter Sugar Interests that would be expected to alleviate 
overall deviation between the Fund's performance and that of the Sugar 
Benchmark that may result from certain market and trading 
inefficiencies or other reasons.
    The Fund will invest in Sugar Interests to the fullest extent 
possible without being leveraged or unable to satisfy its expected 
current or potential margin or collateral obligations with respect to 
its investments in Sugar Interests.\10\ After fulfilling such margin 
and collateral requirements, the Fund will invest the remainder of its 
proceeds from the sale of baskets in Treasury Securities or cash 
equivalents, and/or hold such assets in cash (generally in interest-
bearing accounts). Therefore, the focus of the Sponsor in managing the 
Fund is investing in Sugar Interests and in Treasury Securities, cash 
and/or cash equivalents.
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    \10\ The Sponsor represents that the Fund will invest in Sugar 
Interests in a manner consistent with the Fund's investment 
objective and not to achieve additional leverage.
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    The Exchange represents that 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. The Exchange 
further represents that, with respect to application of Rule 10A-3 
under the Act,\11\ the Trust will rely on the exception contained in 
Rule 10A-3(c)(7),\12\ and a minimum of 100,000 Shares for each Fund 
will be outstanding as of the start of trading on the Exchange.
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    \11\ 17 CFR 240.10A-3.
    \12\ 17 CFR 240.10A-3(c)(7).
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    Additional details regarding the Trust; Funds; Shares; trading 
policies of the Funds; creations and redemptions of the Shares; Wheat, 
Soybean, and Sugar Futures Contracts; position, accountability, price 
fluctuation, and other limits on Wheat, Soybean, and

[[Page 58552]]

Sugar Futures Contracts; investment risks; Wheat, Soybean, and Sugar 
Benchmarks; NAV calculation; the dissemination and availability of 
information about the underlying assets; trading halts; applicable 
trading rules; surveillance; and the Information Bulletin, among other 
things, can be found in the Notice and/or the Registration Statements, 
as applicable.\13\
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    \13\ See Notice and Registration Statements, supra notes 3 and 
4, respectively.
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III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule 
change to list and trade the Shares of the Funds is consistent with the 
requirements of Section 6 of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\14\ In 
particular, the Commission finds that the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act,\15\ 
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 Funds and the Shares must comply with the requirements of NYSE Arca 
Equities Rule 8.200 and Commentary .02 thereto to be listed and traded 
on the Exchange.
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    \14\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \15\ 15 U.S.C. 78f(b)(5).
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    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,\16\ which sets forth Congress's 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, and each Wheat, Soybean, and Sugar Benchmark will be 
disseminated by one or more major market data vendors every 15 seconds 
during the NYSE Arca Core Trading Session of 9:30 a.m. to 4 p.m. 
Eastern Time (``E.T.''). In addition, an updated Indicative Trust Value 
(``ITV''), which is calculated by using the prior day's closing NAV per 
Share of each Fund as a base and updating that value throughout the 
trading day to reflect changes in the value of the Wheat, Soybean and 
Sugar Benchmark Component Futures Contracts, as applicable, and other 
financial instruments, if any, for each Fund will be disseminated on a 
per-Share basis by one or more major market data vendors every 15 
seconds during the NYSE Arca Core Trading Session.\17\ The NAV for the 
Funds will be calculated by the Administrator once a day and will be 
disseminated daily to all market participants at the same time.\18\ 
Each Fund will provide website disclosure of portfolio holdings daily 
and will include, as applicable, the names, quantity, price and market 
value of Wheat, Soybean and Sugar Benchmark Component Futures 
Contracts, as applicable, and other financial instruments, if any, and 
the characteristics of such instruments and cash equivalents, and 
amount of cash held in the portfolios of the Funds. The closing price 
and settlement prices of the Wheat Futures Contracts and Soybean 
Futures Contracts are readily available from CBOT, and of the Sugar No. 
11 Futures Contracts from ICE Futures. The Exchange represents that 
quotation and last sale information for the Wheat Futures Contracts, 
Soybean Futures Contracts and Sugar No. 11 Futures Contracts are widely 
disseminated through a variety of major market data vendors worldwide, 
including Bloomberg and Reuters. In addition, the Exchange further 
represents that complete real-time data for such contracts is available 
by subscription from Reuters and Bloomberg. CBOT and ICE Futures also 
provide delayed futures information on current and past trading 
sessions and market news free of charge on their websites. The specific 
contract specifications for such contracts are also available at the 
CBOT and ICE Futures websites, as well as other financial informational 
sources. The spot prices of wheat, soybeans, and sugar are also 
available on a 24-hour basis from major market data vendors. In 
addition, the website for the Funds and/or the Exchange will contain 
the prospectus and additional data relating to NAV and other applicable 
quantitative information.
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    \16\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \17\ The normal trading hours for Wheat Futures Contracts on the 
CBOT are 10:30 a.m. E.T. to 2:15 p.m. E.T.; the normal trading hours 
for Soybean Futures Contracts on the CBOT are 10:30 a.m. E.T. to 
2:15 p.m. E.T.; and the normal trading hours for Sugar No. 11 
Futures Contracts on ICE Futures are 3:30 a.m. E.T. to 2 p.m. E.T. 
Thus, there is a gap in time at the end of each day during which the 
Funds' Shares are traded on the NYSE Arca, but real-time CBOT 
trading prices for Wheat Futures Contracts and Soybean Futures 
Contracts traded on CBOT, and real-time ICE Futures trading prices 
for Sugar No. 11 Futures Contracts, are not available. As a result, 
during those gaps there will be no update to the ITV. Therefore, a 
static ITV will be disseminated, between the close of trading on 
CBOT for Wheat Futures Contracts and Soybean Futures Contracts, and 
on ICE Futures for Sugar No. 11 Futures Contracts, and the close of 
the NYSE Arca Core Trading Session.
    \18\ For each Fund, the NAV will be calculated by taking the 
current market value of the Fund's total assets and subtracting any 
liabilities. Under the Funds' current operational procedures, the 
Administrator will generally calculate the NAV of the Funds' Shares 
as of 4 p.m. E.T. The NAV for a particular trading day will be 
released after 4:15 p.m. E.T.
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    The Commission further 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. 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. Further, the Exchange represents 
that it may halt trading during the day in which an interruption to the 
dissemination of the ITV or the value of the underlying futures 
contracts or the applicable benchmark occurs. If the interruption to 
the dissemination of the ITV, the value of the underlying futures 
contracts or the applicable benchmark 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, 
the website disclosure of the portfolio composition of each Fund will 
occur at the same time as the disclosure by the Sponsor 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 website 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 
sites. The Exchange may halt trading in the Shares if trading is not 
occurring in the underlying futures contracts or if other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly

[[Page 58553]]

market are present.\19\ Lastly, 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 \20\ acting as registered 
Market Makers \21\ in Trust Issued Receipts to facilitate surveillance.
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    \19\ With respect to trading halts, the Exchange may consider 
other relevant factors in exercising its discretion to halt or 
suspend trading in the Shares of the Funds. Trading in the Shares of 
the Funds will be subject to halts caused by extraordinary market 
volatility pursuant to the Exchange's circuit breaker rules in NYSE 
Arca Equities Rule 7.12. 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.
    \20\ See NYSE Arca Equities Rule 1.1(n) (defining ETP Holder).
    \21\ See NYSE Arca Equities Rule 1.1(u) (defining Market Maker).
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    The Exchange has represented 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 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.
    (2) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.
    (3) The Exchange's surveillance 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.
    (4) With respect to the Funds' futures contracts traded on 
exchanges, not more than 10% of the weight of such futures contracts in 
the aggregate shall consist of components whose principal trading 
market is not a member of the Intermarket Surveillance Group or is a 
market with which the Exchange does not have a comprehensive 
surveillance sharing agreement.
    (5) 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: (a) 
The risks involved in trading the Shares during the Opening and Late 
Trading Sessions when an updated ITV will not be calculated or publicly 
disseminated; (b) the procedures for purchases and redemptions of 
Shares in creation baskets and redemption baskets (and that Shares are 
not individually redeemable); (c) 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; 
(d) how information regarding the ITV is disseminated; (e) that a 
static ITV will be disseminated, between the close of trading on the 
applicable futures exchange and the close of the NYSE Arca Core Trading 
Session; (f) 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 (g) trading information.
    (6) A minimum of 100,000 Shares will be outstanding as of the start 
of trading on the Exchange.
    (7) With respect to the application of Rule 10A-3 under the Act, 
the Trust will rely on the exception contained in Rule 10A-3(c)(7).\22\
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    \22\ See supra notes 11 and 12 and accompanying text.
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    This approval order is based on all of the Exchange's 
representations.\23\ The Commission notes that the Funds are 
substantially similar to another fund, the shares of which have been 
approved for the listing and trading on the Exchange by the 
Commission.\24\
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    \23\ The Commission notes that it does not regulate the market 
for futures in which the Fund plans to take positions, which is the 
responsibility of the CFTC. The CFTC has the authority to set limits 
on the positions that any person may take in futures. These limits 
may be directly set by the CFTC or by the markets on which the 
futures are traded. The Commission has no role in establishing 
position limits on futures, even though such limits could impact an 
exchange-traded product that is under the jurisdiction of the 
Commission.
    \24\ See Securities Exchange Act Release No. 62213 (June 3, 
2010), 75 FR 32828 (June 9, 2010) (SR-NYSEArca-2010-22) (approving 
the listing and trading on the Exchange of the Teucrium Corn Fund).
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    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \25\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.
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    \25\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\26\ that the proposed rule change (SR-NYSEArca-2011-48) be, and it 
hereby is, approved.
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    \26\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-24175 Filed 9-20-11; 8:45 am]
BILLING CODE 8011-01-P


