
[Federal Register Volume 77, Number 6 (Tuesday, January 10, 2012)]
[Notices]
[Pages 1526-1532]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-185]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66098; File No. SR-NYSEArca-2011-97]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating to Listing and Trading of Shares of 
the Teucrium Agriculture Fund Under NYSE Arca Equities Rule 8.200

January 4, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that, on December 20, 2011, NYSE Arca, Inc. 
(``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade shares of the Teucrium 
Agriculture Fund under NYSE Arca Equities Rule 8.200. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and www.nyse.com.

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

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

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

1. Purpose
    NYSE Arca Equities Rule 8.200, Commentary .02 permits the trading 
of Trust Issued Receipts (``TIRs'') either by listing or pursuant to 
unlisted trading privileges (``UTP'').\3\ The Exchange proposes to list 
and trade shares (``Shares'') of the Teucrium Agriculture Fund 
(``Fund'') pursuant to NYSE Arca Equities Rule 8.200.
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    \3\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to 
TIRs that invest in ``Financial Instruments.'' The term ``Financial 
Instruments,'' as defined in Commentary .02(b)(4) to NYSE Arca 
Equities Rule 8.200, means any combination of investments, including 
cash; securities; options on securities and indices; futures 
contracts; options on futures contracts; forward contracts; equity 
caps, collars and floors; and swap agreements.
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    The Exchange notes that the Commission has previously approved the 
listing and trading of other issues of TIRs on the American Stock 
Exchange LLC,\4\ trading on NYSE Arca pursuant to UTP,\5\ and listing 
on NYSE Arca.\6\ Among these are the Teucrium Corn Fund, Teucrium Wheat 
Fund, Teucrium Soybean Fund, and Teucrium Sugar Fund, each a series of 
the Teucrium Commodity Trust (``Trust'').\7\ In addition, the 
Commission has approved other exchange-traded fund-like products linked 
to the performance of underlying commodities.\8\
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    \4\ See, e.g., Securities Exchange Act Release No. 58161 (July 
15, 2008), 73 FR 42380 (July 21, 2008) (SR-Amex-2008-39).
    \5\ See, e.g., Securities Exchange Act Release No. 58163 (July 
15, 2008), 73 FR 42391 (July 21, 2008) (SR-NYSEArca-2008-73).
    \6\ See, e.g., Securities Exchange Act Release No. 58457 
(September 3, 2008), 73 FR 52711 (September 10, 2008) (SR-NYSEArca-
2008-91).
    \7\ See Securities Exchange Act Release Nos. 62213 (June 3, 
2010), 75 FR 32828 (June 9, 2010) (SR-NYSEArca-2010-22) (order 
approving listing on the Exchange of Teucrium Corn Fund); 65344 
(September 15, 2011), 76 FR 58549 (September 21, 2011) (SR-NYSEArca-
2011-48) (order approving listing on the Exchange of the Teucrium 
Wheat Fund, Teucrium Soybean Fund, and Teucrium Sugar Fund).
    \8\ See, e.g., Securities Exchange Act Release Nos. 57456 (March 
7, 2008), 73 FR 13599 (March 13, 2008) (SR-NYSEArca-2007-91) (order 
granting accelerated approval for NYSE Arca listing and trading of 
the iShares GS Commodity Trusts); 59781 (April 17, 2009), 74 FR 
18771 (April 24, 2009) (SR-NYSEArca-2009-28) (order granting 
accelerated approval for NYSE Arca listing and trading of the ETFS 
Silver Trust); 59895 (May 8, 2009), 74 FR 22993 (May 15, 2009) (SR-
NYSEArca-2009-40) (order granting accelerated approval for NYSE Arca 
listing and trading of the ETFS Gold Trust); 61219 (December 22, 
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95) (order 
approving listing and trading on NYSE Arca of the ETFS Platinum 
Trust).
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    The Shares represent beneficial ownership interests in the Fund, as 
described in the Registration Statement for the Fund.\9\ The Fund is a 
commodity pool that is a series of the Trust, a Delaware statutory 
trust. The Fund is managed and controlled by Teucrium Trading, LLC 
(``Sponsor''). The Sponsor is a Delaware limited liability company that 
is registered as a commodity pool operator (``CPO'') with the U.S. 
Commodity Futures Trading Commission (``CFTC'') and is a member

[[Page 1527]]

of the National Futures Association. The Bank of New York Mellon 
(``Custodian'' or ``Administrator'') is the custodian, transfer agent 
and administrator for the Fund. Foreside Fund Services, LLC 
(``Distributor'') is the distributor for the Fund's Shares.
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    \9\ See Amendment No. 1 to Form S-1 for Teucrium Commodity 
Trust, dated December 5, 2011 (File No. 333-173691) relating to the 
Fund (``Registration Statement''). The discussion herein relating to 
the Trust and the Shares is based, in part, on the Registration 
Statement. See also Amendment No. 4 to the Registration Statement on 
Form S-1 for Teucrium Commodity Trust, dated May 26, 2010 (File No. 
333-162033) relating to the Teucrium Corn Fund; 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.
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Teucrium Agriculture Fund
    According to the Registration Statement, the investment objective 
of the 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 (``Underlying Fund Average'') of 
the NAVs per share of four other commodity pools that are series of the 
Trust and are sponsored by the Sponsor: The Teucrium Corn Fund, the 
Teucrium Wheat Fund, the Teucrium Soybean Fund and the Teucrium Sugar 
Fund (collectively, ``Underlying Funds'').\10\ The Fund seeks to 
achieve its investment objective by investing under normal market 
conditions \11\ in the publicly-traded shares of each Underlying Fund 
so that the Underlying Fund Average will have a weighting of 25% for 
each Underlying Fund, and the Fund's assets will be rebalanced, 
generally on a daily basis, to maintain the approximate 25% allocation 
to each Underlying Fund. The Fund does not intend to invest directly in 
futures contracts (``Futures Contracts'') or other Commodity Interests 
(as defined below), although it reserves the right to do so in the 
future, including if an Underlying Fund ceases operations or if shares 
of an Underlying Fund cease trading on the Exchange.
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    \10\ Additional information regarding the Underlying Funds is 
included in the proposed rule changes approved by the Commission for 
the Underlying Funds and in their corresponding registration 
statements. See notes 7 and 9, supra.
    \11\ The term ``under normal market conditions'' includes, but 
is not limited to, the absence of extreme volatility or trading 
halts in the commodity markets or the financial markets generally; 
operational issues causing dissemination of inaccurate market 
information; or force majeure type events such as systems failure, 
natural or man-made disaster, act of God, armed conflict, act of 
terrorism, riot or labor disruption or any similar intervening 
circumstance.
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    According to the Registration Statement, the investment objective 
of each Underlying Fund is to have the daily changes in percentage 
terms of its shares' NAV reflect the daily changes in percentage terms 
of a weighted average of the closing settlement prices for certain 
Futures Contracts for the commodity specified in the Underlying Fund's 
name. (This weighted average is referred to herein as the Underlying 
Fund's ``Benchmark,'' the Futures Contracts that at any given time make 
up an Underlying Fund's Benchmark are referred to herein as the 
Underlying Fund's ``Benchmark Component Futures Contracts,'' and the 
commodity specified in the Underlying Fund's name is referred to herein 
as its ``Specified Commodity''). Specifically, the Teucrium Corn Fund's 
Benchmark is: (1) The second-to-expire Futures Contract for corn traded 
on the Chicago Board of Trade (``CBOT''), weighted 35%, (2) the third-
to-expire CBOT corn Futures Contract, weighted 30%, and (3) the CBOT 
corn Futures Contract expiring in the December following the expiration 
month of the third-to-expire contract, weighted 35%. The Teucrium Wheat 
Fund's Benchmark is: (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 Teucrium Soybean Fund's Benchmark 
is: (1) The 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%, except that CBOT soybean Futures Contracts expiring in 
August and September will not be part of the Teucrium Soybean Fund's 
Benchmark because of the less liquid market for these Futures 
Contracts. The Teucrium Sugar Fund's Benchmark is: (1) The second-to-
expire Sugar No. 11 Futures Contract traded on ICE Futures U.S. (``ICE 
Futures''),\12\ weighted 35%, (2) the third-to-expire ICE Futures Sugar 
No. 11 Futures Contract, weighted 30%, and (3) the ICE Futures Sugar 
No. 11 Futures Contract expiring in the March following the expiration 
month of the third-to-expire contract, weighted 35%.
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    \12\ According to the Registration Statement, although sugar 
Futures Contracts are primarily traded on the ICE Futures, they may 
also be traded on the New York Mercantile Exchange (``NYMEX'').
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    Each Underlying Fund seeks to achieve its investment objective by 
investing under normal market conditions in Benchmark Component Futures 
Contracts or, in certain circumstances, in other Futures Contracts for 
its Specified Commodity. In addition, and to a limited extent, an 
Underlying Fund also may invest in exchange-traded options on Futures 
Contracts for its Specified Commodity and in swap agreements \13\ based 
on its Specified Commodity that are cleared through a futures exchange 
or its affiliated provider of clearing services (``Cleared Swaps'') in 
furtherance of the Underlying Fund's investment objective. Once 
position limits or accountability levels on Futures Contracts on an 
Underlying Fund's Specified Commodity are reached, each Underlying 
Fund's intention is to invest first in Cleared Swaps based on its 
Specified Commodity to the extent practicable under the position limits 
or accountability levels applicable to such Cleared Swaps and 
appropriate in light of the liquidity in the market for such Cleared 
Swaps, and then in contracts and instruments such as cash-settled 
options on Futures Contracts and forward contracts, swaps other than 
Cleared Swaps, and other over-the-counter transactions that are based 
on the price of its Specified Commodity or Futures Contracts on its 
Specified Commodity (collectively, ``Other Commodity Interests,'' and, 
together with Futures Contracts and Cleared Swaps, ``Commodity 
Interests''). According to the Registration Statement, by utilizing 
certain or all of these investments, the Sponsor will endeavor to cause 
each Underlying Fund's performance to closely track that of its 
Benchmark.
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    \13\ According to the Registration Statement, a cleared swap 
agreement is a standard contract to exchange a periodic stream of 
payments determined by reference to a notional amount, with one 
party's payments determined by reference to a specified price for an 
underlying asset or index, and the other's determined by reference 
to the current market price of that asset or index. Cleared swaps 
may be executed bilaterally or on an exchange or other trading 
platform, but must be accepted for clearing by a derivatives 
clearing organization.
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    The Underlying Funds seek to achieve their investment objectives 
primarily by investing in Commodity Interests such that daily changes 
in the Underlying Fund's NAV will be expected to closely track the 
changes in its Benchmark. Each Underlying Fund's positions in Commodity 
Interests will be changed or ``rolled'' on a regular basis in order to 
track the changing nature of its Benchmark. For example, several times 
a year (on the dates on which Futures Contracts on the Underlying 
Fund's Specified Commodity expire), a particular Futures Contract will 
no longer be a Benchmark Component Futures Contract, and the Underlying 
Fund's investments will have to be changed accordingly. In order that 
the Underlying Funds' 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 Underlying Funds' 
investments typically will not be rolled entirely on that day, but 
rather will typically be rolled over a period of several days.

[[Page 1528]]

    Consistent with achieving each Underlying Fund's investment 
objective of closely tracking its Benchmark, the Sponsor may for 
certain reasons cause the Underlying Fund to enter into or hold Futures 
Contracts other than the Benchmark Component Futures Contracts, Cleared 
Swaps and/or Other Commodity Interests. For example, certain Cleared 
Swaps have standardized terms similar to, and are priced by reference 
to, a corresponding Benchmark Component Futures Contract. Additionally, 
Other Commodity Interests that do not have standardized terms and are 
not exchange-traded, referred to as ``over-the-counter'' Commodity 
Interests, can generally be structured as the parties to the Commodity 
Interest contract desire. Therefore, an Underlying Fund might enter 
into multiple Cleared Swaps and/or over-the-counter Commodity Interests 
related to its Specified Commodity that are intended to exactly 
replicate the performance of Benchmark Component Futures Contracts of 
the Underlying Fund, or a single over-the-counter Commodity Interest 
designed to replicate the performance of its Benchmark as a whole. 
Assuming that there is no default by a counterparty to an over-the-
counter Commodity Interest, the performance of the Commodity Interest 
will necessarily correlate exactly with the performance of the 
Underlying Fund's Benchmark or the applicable Benchmark Component 
Futures Contract.\14\ The Underlying Funds might also enter into or 
hold Commodity Interests other than Benchmark Component Futures 
Contracts to facilitate effective trading, consistent with the 
discussion of an Underlying Fund's ``roll'' strategy in the preceding 
paragraph. In addition, an Underlying Fund might enter into or hold 
Commodity Interests related to its Specified Commodity that would be 
expected to alleviate overall deviation between the Underlying Fund's 
performance and that of its Benchmark that may result from certain 
market and trading inefficiencies or other reasons. According to the 
Registration Statement, by utilizing certain or all of the investments 
described above, the Sponsor will endeavor to cause each Underlying 
Fund's performance to closely track that of its Benchmark.
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    \14\ With respect to the Underlying Funds, 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.
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    While the Fund expects to maintain substantially all of its assets 
in shares of the Underlying Funds at all times, the Fund may hold some 
residual amount of assets in obligations of the United States 
government (``Treasury Securities'') or cash equivalents, and/or hold 
such assets in cash (generally in interest-bearing accounts). The 
Underlying Funds invest in Commodity Interests to the fullest extent 
possible without being leveraged \15\ or unable to satisfy their 
expected current or potential margin or collateral obligations with 
respect to their investments in Commodity Interests. After fulfilling 
such margin and collateral requirements, the Underlying Funds will 
invest the remainder of the proceeds from the sale of baskets (as 
described below) in Treasury Securities or cash equivalents, and/or 
hold such assets in cash. Therefore, the focus of the Sponsor in 
managing the Underlying Funds is investing in Commodity Interests and 
in Treasury Securities, cash and/or cash equivalents. The Fund and 
Underlying Funds will earn interest income from the Treasury Securities 
and/or cash equivalents that it purchases and on the cash it holds 
through the Custodian.
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    \15\ The Sponsor represents that the Fund and Underlying Funds 
will invest in their applicable Commodity Interests in a manner 
consistent with their respective investment objectives and not to 
achieve additional leverage.
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    The Sponsor will endeavor to place the Fund's trades in the 
Underlying Funds and otherwise manage the Fund's investments so that 
the Fund's average daily tracking error against the Underlying Fund 
Average will be less than 10 percent over any period of 30 trading 
days. More specifically, the Sponsor will endeavor to manage the Fund 
so that A will be within plus/minus 10 percent of B, where A is the 
average daily change in the Fund's NAV for any period of 30 successive 
valuation days, i.e., any trading day as of which the Fund calculates 
its NAV, and B is the average daily change in the Underlying Fund 
Average over the same period.\16\
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    \16\ According to the Registration Statement, the Sponsor 
believes that market arbitrage opportunities will cause the Fund's 
Share price on the NYSE Arca to closely track the Fund's NAV per 
Share. The Sponsor believes that the net effect of this expected 
relationship and the expected relationship described above between 
the Fund's NAV and the Underlying Fund Average will be that the 
changes in the price of the Fund's Shares on the NYSE Arca will 
closely track, in percentage terms, changes in the Underlying Fund 
Average.
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    According to the Registration Statement, the Sponsor employs a 
``neutral'' investment strategy intended so that the Fund will track 
the changes in the Underlying Fund Average and each Underlying Fund 
will track the changes in its Benchmark regardless of whether the 
Underlying Fund Average or Benchmark goes up or down. According to the 
Registration Statement, the Fund's and Underlying Funds' ``neutral'' 
investment strategies are designed to permit investors generally to 
purchase and sell the Fund's Shares for the purpose of investing 
indirectly in the agricultural commodities market in a cost-effective 
manner. Such investors may include participants in agricultural 
industries and other industries seeking to hedge the risk of losses in 
their commodity-related transactions, as well as investors seeking 
exposure to the agricultural commodities market. The Sponsor does not 
intend to operate the Fund or an Underlying Fund in a fashion such that 
its per share NAV will equal, in dollar terms, the spot price of a unit 
of a Specified Commodity or the price of any particular Futures 
Contract.
    According to the Registration Statement, the Fund and the 
Underlying Funds do not intend to limit the size of their offerings and 
will attempt to expose substantially all of their proceeds to the 
agricultural commodities market either directly through Commodity 
Interests or, in the case of the Fund, indirectly through the 
Underlying Funds. If an Underlying Fund encounters position limits or 
price fluctuation limits for Futures Contracts and/or Cleared Swaps on 
U.S. exchanges, it may then, if permitted under applicable regulatory 
requirements, purchase Other Commodity Interests and/or Futures 
Contracts listed on foreign exchanges. However, the Futures Contracts 
available on such foreign exchanges may have different underlying 
sizes, deliveries, and prices than the Benchmark Component Futures 
Contracts. In addition, the Futures Contracts available on these 
exchanges may be subject to their own position limits or similar 
restrictions. In any case, notwithstanding the potential availability 
of these instruments in certain circumstances, position limits could 
force the Fund and the Underlying Funds to limit the number of Creation 
Baskets (as defined below) that they sell.\17\
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    \17\ With respect to the Fund, there will be no specified limit 
on the maximum amount of Creation Baskets that can be sold. At some 
point, however, applicable position limits may practically limit the 
number of Creation Baskets that will be sold if the Sponsor 
determines that the other investment alternatives available to the 
Fund at that time will not enable it to meet its stated investment 
objective.
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Calculation of NAV
    The Fund's NAV is calculated by taking the current market value of 
its total assets and subtracting any liabilities. The Administrator 
will

[[Page 1529]]

calculate the NAV of the Fund once each trading day as of the earlier 
of the close of the New York Stock Exchange (``NYSE'') or 4 p.m. 
Eastern time (``E.T.''). The NAV for a particular trading day will be 
released after 4:15 p.m. E.T.
    For purposes of determining the Fund's NAV, the Fund's investments 
in the Underlying Funds will be valued based on the Underlying Funds' 
NAVs. In turn, in determining the value of the Futures Contracts held 
by the Underlying Funds, the Administrator will use the closing price 
on the exchange on which they are traded. The Administrator will 
determine the value of all other Fund and Underlying Fund investments 
as of the earlier of the close of the NYSE or 4 p.m. E.T. The value of 
Cleared Swaps and over-the-counter Commodity Interests will be 
determined based on the value of the commodity or Futures Contract 
underlying such Commodity Interest, except that a fair value may be 
determined if the Sponsor believes that the Underlying Fund is subject 
to significant credit risk relating to the counterparty to such 
Commodity Interest. Treasury Securities held by the Fund or Underlying 
Funds will be valued by the Administrator using values received from 
recognized third-party vendors (such as Reuters) and dealer quotes. NAV 
will include any unrealized profit or loss on open Commodity Interests 
held by each Underlying Fund and any other credit or debit accruing to 
the Fund but unpaid or not received by the Fund.
Dissemination of Indicative Fund Value
    The Indicative Fund Value (``IFV'') will be calculated by using the 
prior day's closing NAV per Share of the Fund as a base and updating 
that value throughout the NYSE Arca Core Trading Session (9:30 a.m. to 
4 p.m. E.T.) to reflect changes in the values of the Underlying Funds' 
shares. Changes in the value of Treasury Securities and cash 
equivalents will not be included in the calculation of IFV. For this 
and other reasons, the IFV disseminated during NYSE Arca trading hours 
should not be viewed as an actual real time update of the NAV.
    The IFV for the Fund and each Underlying Fund will be widely 
disseminated by one or more major market data vendors on a per share 
basis every 15 seconds during the NYSE Arca Core Trading Session.\18\ 
The normal trading hours for Futures Contracts may begin after 9:30 
a.m. and end before 4 p.m. E.T., and there is a gap in time at the 
beginning and the end of each day during which the Underlying Funds' 
shares are traded on the NYSE Arca, but real-time trading prices for at 
least some of the Futures Contracts held by the Underlying Funds are 
not available. As a result, during those gaps there will be no update 
to the IFVs of the Underlying Funds and such IFVs, therefore, will be 
static.
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    \18\ Currently, it is the Exchange's understanding that several 
major market data vendors display and/or make widely available IFVs 
published on Consolidated Tape Association (``CTA'') or other data 
feeds.
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Creation and Redemption of Shares
    The Fund will create and redeem Shares from time to time, but only 
in one or more ``Creation Baskets'' or ``Redemption Baskets,'' each 
consisting of 100,000 Shares. The creation and redemption of baskets 
are made in exchange for delivery to the Fund or the distribution by 
the Fund of the amount of cash equal to the combined NAV of the number 
of Shares included in the baskets being created or redeemed determined 
as of 4 p.m. E.T. on the day the order to create or redeem baskets is 
properly received.
    Authorized Purchasers are the only persons that may place orders to 
create and redeem baskets. Authorized Purchasers must be (1) either 
registered broker-dealers or other securities market participants, such 
as banks and other financial institutions that are not required to 
register as broker-dealers to engage in securities transactions as 
described in the Registration Statement, and (2) Depository Trust 
Company participants.
    The total deposit required to create each basket (``Creation Basket 
Deposit'') is the amount of Treasury Securities and/or cash that is in 
the same proportion to the total assets of the Fund (net of estimated 
accrued but unpaid fees, expenses and other liabilities) on the 
purchase order date as the number of Shares to be created under the 
purchase order is in proportion to the total number of Shares 
outstanding on the purchase order date.
    The procedures by which an Authorized Purchaser can redeem one or 
more baskets mirror the procedures for the creation of baskets. On any 
business day, an Authorized Purchaser may place an order with the 
Distributor to redeem one or more baskets. Creation and redemption 
orders must be placed by noon E.T.
    The redemption distribution from the Fund will consist of a 
transfer to the redeeming Authorized Purchaser of an amount of Treasury 
Securities and/or cash that is in the same proportion to the total 
assets of the Fund (net of estimated accrued but unpaid fees, expenses 
and other liabilities) on the date the order to redeem is properly 
received as the number of Shares to be redeemed under the redemption 
order is in proportion to the total number of Shares outstanding on the 
date the order is received.
    The Fund will meet the initial and continued listing requirements 
applicable to TIRs in NYSE Arca Equities Rule 8.200 and Commentary .02 
thereto. With respect to application of Rule 10A-3 under the Act,\19\ 
the Trust will rely on the exception contained in Rule 10A-3(c)(7).\20\ 
A minimum of 100,000 Shares for the Fund will be outstanding as of the 
start of trading on the Exchange.
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    \19\ 17 CFR 240.10A-3.
    \20\ 17 CFR 240.10A-3(c)(7).
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    A more detailed description of the Fund, Underlying Funds, fees, 
Commodity Interests and other aspects of the applicable commodities 
markets, as well as investment risks, are set forth in the Registration 
Statement and the registration statements relating to the Underlying 
Funds and the releases approving the listing and trading of the 
Underlying Funds.\21\ All terms relating to the Fund that are referred 
to, but not defined in, this proposed rule change are defined in the 
Registration Statement.
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    \21\ See notes 7 and 9, supra.
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Availability of Information Regarding the Shares
    The Web site for the Fund (www.teucriumtagsfund.com) and/or the 
Exchange, which will be publicly accessible at no charge, will contain 
the following information: (a) The current NAV per Share daily and the 
prior business day's NAV and the reported closing price; (b) the 
midpoint of the bid-ask price in relation to the NAV as of the time the 
NAV is calculated (``Bid-Ask Price''); (c) calculation of the premium 
or discount of such price against such NAV; (d) the bid-ask price of 
Shares determined using the highest bid and lowest offer as of the time 
of calculation of the NAV; (e) data in chart form displaying the 
frequency distribution of discounts and premiums of the Bid-Ask Price 
against the NAV, within appropriate ranges for each of the four (4) 
previous calendar quarters; (f) the prospectus; and (g) other 
applicable quantitative information. The Fund will also disseminate the 
Fund's holdings on a daily basis on the Fund's Web site.
    The NAV for the Fund will be calculated by the Administrator once a 
day and will be disseminated daily to all market participants at the 
same time. The Exchange will also make available

[[Page 1530]]

on its Web site daily trading volume of each of the Shares and shares 
of the Underlying Funds, closing prices of the Shares and shares of the 
Underlying Funds, and the corresponding NAV for the Fund and the 
Underlying Funds. The closing price and settlement prices of the corn, 
wheat and soybean Futures Contracts are also readily available from the 
CBOT, and of sugar Futures Contracts from ICE Futures. In addition, 
such prices are available from automated quotation systems, published 
or other public sources, or on-line information services such as 
Bloomberg or Reuters. Each Benchmark and the Underlying Fund Average 
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. E.T. Quotation and last-sale information regarding the Shares and 
shares of the Underlying Funds will be disseminated through the 
facilities of the CTA.
    The daily settlement prices for the corn, wheat and soybeans 
Futures Contracts are publicly available on the Web site of the CBOT 
(www.cmegroup.com) and, for the sugar Futures Contracts, on the Web 
site of ICE Futures (www.theice.com). In addition, various data vendors 
and news publications publish futures prices and data. The Exchange 
represents that quotation and last sale information for the corn, 
wheat, soybeans and sugar 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. The CBOT and ICE Futures also 
provide delayed futures information on current and past trading 
sessions and market news free of charge on their Web sites. The 
specific contract specifications for such contracts are also available 
at the CBOT and ICE Futures Web sites, as well as other financial 
informational sources. The spot price of corn, wheat, soybeans and 
sugar also is available on a 24-hour basis from major market data 
vendors.
    The Fund will provide Web site disclosure of its portfolio holdings 
daily and will include the names, quantity, price and market value of 
shares of the Underlying Funds held by the Fund and other financial 
instruments, if any, and the characteristics of such instruments and 
cash equivalents, and amount of cash held in the portfolio of the Fund. 
In addition, the Underlying Funds provide Web site disclosure of their 
respective portfolio holdings daily and include the names, quantity, 
price and market value of such holdings and the characteristics of such 
holdings. The Web site disclosure of the portfolio composition of the 
Fund will occur at the same time as the disclosure by the Sponsor of 
the portfolio composition to Authorized Purchasers so that all market 
participants are provided portfolio composition information at the same 
time. Therefore, the same portfolio information will be provided on the 
public Web site as well as in electronic files provided to Authorized 
Purchasers. Accordingly, each investor will have access to the current 
portfolio composition of the Fund and each Underlying Fund through the 
applicable fund's Web site.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. Shares will trade on 
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. The Exchange has 
appropriate rules to facilitate transactions in the Shares during all 
trading sessions. As provided in NYSE Arca Equities Rule 7.6, 
Commentary .03, the minimum price variation (``MPV'') for quoting and 
entry of orders in equity securities traded on the NYSE Arca 
Marketplace is $0.01, with the exception of securities that are priced 
less than $1.00 for which the MPV for order entry is $0.0001.
    The trading of the Shares will be subject to NYSE Arca Equities 
Rule 8.200, Commentary .02(e), which sets forth certain restrictions on 
Equity Trading Permit (``ETP'') Holders acting as registered Market 
Makers in TIRs to facilitate surveillance. See ``Surveillance'' below 
for more information.
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading may be halted because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in the Shares inadvisable. These may include: (1) The extent to 
which trading is not occurring in the Futures Contracts or shares of 
the Underlying Funds, or (2) whether other unusual conditions or 
circumstances detrimental to the maintenance of a fair and orderly 
market are present. In addition, trading in Shares will be subject to 
trading halts caused by extraordinary market volatility pursuant to the 
Exchange's ``circuit breaker'' rule \22\ or by the halt or suspension 
of trading of the Futures Contracts or shares of the Underlying Funds.
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    \22\ See NYSE Arca Equities Rule 7.12.
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    The Exchange represents that the Exchange may halt trading during 
the day in which an interruption to the dissemination of the IFV or the 
Underlying Fund Average or the value of the applicable Benchmark 
Component Futures Contracts or the applicable Benchmark occurs. If the 
interruption to the dissemination of the IFV, the Underlying Fund 
Average, the value of the applicable Benchmark Component 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.\23\ In 
addition, if the Exchange becomes aware that the NAV with respect to 
the Shares is not disseminated to all market participants at the same 
time, it will halt trading in the Shares until such time as the NAV is 
available to all market participants.
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    \23\ The Exchange notes that, for each of the Underlying Funds, 
the Exchange may halt trading during the day in which an 
interruption to the dissemination of the IFV or the value of the 
applicable Benchmark Component Futures Contracts or Benchmark 
occurs.
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Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products, including TIRs, to 
monitor trading in the Shares. The Exchange represents that these 
procedures are adequate to properly monitor Exchange trading of the 
Shares in all trading sessions and to deter and detect violations of 
Exchange rules and applicable federal securities laws.
    The Exchange's current trading surveillances focus on detecting 
securities trading outside their normal patterns. When such situations 
are detected, surveillance analysis follows and investigations are 
opened, where appropriate, to review the behavior of all relevant 
parties for all relevant trading violations. The Exchange is able to 
obtain information regarding trading in the Shares, shares of the 
Underlying Funds, and the physical commodities included in, or options, 
futures or options on futures on, Shares and shares of the Underlying 
Funds through ETP Holders, in connection with such ETP Holders' 
proprietary or customer trades through ETP Holders which they effect on 
any relevant market. The Exchange can obtain market surveillance 
information, including customer identity information, with respect to 
transactions occurring on exchanges

[[Page 1531]]

that are members of the Intermarket Surveillance Group (``ISG'') or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement. With respect to the Underlying Funds, which are 
listed and traded on the Exchange, the Exchange can obtain market 
surveillance information from CBOT, NYMEX and ICE Futures, which are 
ISG members, and from Kansas City Board of Trade (``KCBT'') and 
Minneapolis Grain Exchange (``MGEX'') in that the Exchange has in place 
a comprehensive surveillance sharing agreement with KCBT and MGEX. A 
list of ISG members is available at www.isgportal.org.\24\
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    \24\ The Exchange notes that not all Futures Contracts may trade 
on markets that are members of ISG or with which the Exchange has in 
place a comprehensive surveillance sharing agreement.
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    In addition, to the extent that the Fund invests in Futures 
Contracts, 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 ISG or is a market with which the Exchange 
does not have a comprehensive surveillance sharing agreement.\25\
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    \25\ The Exchange notes that, with respect to the Underlying 
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 ISG 
or is a market with which the Exchange does not have a comprehensive 
surveillance sharing agreement.
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    The Exchange also has a general policy prohibiting the distribution 
of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading the Shares. Specifically, the 
Information Bulletin will discuss the following: (1) The risks involved 
in trading the Shares during the Opening and Late Trading Sessions when 
an updated IFV will not be calculated or publicly disseminated; (2) the 
procedures for purchases and redemptions of Shares in Creation Baskets 
and Redemption Baskets (and that Shares are not individually 
redeemable); (3) NYSE Arca Equities Rule 9.2(a), which imposes a duty 
of due diligence on its ETP Holders to learn the essential facts 
relating to every customer prior to trading the Shares; (4) how 
information regarding the IFV 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 advise ETP Holders, 
prior to the commencement of trading, of the prospectus delivery 
requirements applicable to the Fund. The Exchange notes that investors 
purchasing Shares directly from the Fund will receive a prospectus. ETP 
Holders purchasing Shares from the Fund for resale to investors will 
deliver a prospectus to such investors. The Information Bulletin will 
also discuss any exemptive, no-action and interpretive relief granted 
by the Commission from any rules under the Act.
    In addition, the Information Bulletin will reference that the Fund 
is subject to various fees and expenses described in the Registration 
Statement. The Information Bulletin will also reference that the CFTC 
has regulatory jurisdiction over the trading of corn, wheat, soybean 
and sugar futures contracts traded on U.S. markets.
    The Information Bulletin will also disclose the trading hours of 
the Shares of the Fund and that the NAV for the Shares is calculated 
after 4 p.m. E.T. each trading day. The Bulletin will disclose that 
information about the Shares of the Fund is publicly available on the 
Fund's Web site.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \26\ that an exchange have rules that 
are designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in NYSE Arca Equities Rule 8.200 
and Commentary .02 thereto. The Exchange has in place surveillance 
procedures that are adequate to properly monitor trading in the Shares 
in all trading sessions and to deter and detect violations of Exchange 
rules and applicable federal securities laws. The Benchmark Component 
Futures Contracts are traded on futures exchanges that are members of 
ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement. The closing price and settlement prices 
of the Futures Contracts for corn, wheat and soybeans are readily 
available from the CBOT, and of Futures Contracts for sugar from ICE 
Futures. In addition, such prices are available from automated 
quotation systems, published or other public sources, or on-line 
information services such as Bloomberg or Reuters. Each Benchmark and 
the Underlying Fund Average 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. E.T. The Fund and the Underlying Funds 
will provide Web site disclosure of their portfolio holdings daily. 
Quotation and last-sale information regarding the Shares and shares of 
the Underlying Funds will be disseminated through the facilities of the 
CTA. The IFV for the Fund and the Underlying Funds will be widely 
disseminated on a per share basis by one or more major market data 
vendors every 15 seconds during the NYSE Arca Core Trading Session. The 
Exchange may halt trading during the day in which the interruption to 
the dissemination of the IFV or the Underlying Fund Average or the 
value of the applicable Benchmark Component Futures Contracts or the 
applicable Benchmark occurs. If the interruption to the dissemination 
of the IFV, or the Underlying Fund Average or the value of the 
applicable Benchmark Component 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, if the Exchange becomes 
aware that the NAV with respect to the Shares is not disseminated to 
all market participants at the same time, it will halt trading in the 
Shares until such time as the NAV is available to all market 
participants.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that a large amount of information is publicly available regarding the 
Fund and the Shares, thereby promoting market transparency. The NAV per 
Share will be calculated daily and made available to all market 
participants at the same time. One or more major market data vendors 
will disseminate for the Fund and the Underlying Funds on a daily basis 
information with respect to the recent NAV per share and shares 
outstanding.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of exchange-traded

[[Page 1532]]

product that will enhance competition among market participants, to the 
benefit of investors and the marketplace. As noted above, the Exchange 
has in place surveillance procedures relating to trading in the Shares 
and may obtain information via ISG from other exchanges that are 
members of ISG or with which the Exchange has entered into a 
comprehensive surveillance sharing agreement. In addition, as noted 
above, investors will have ready access to information regarding the 
Fund's holdings, IFV, and quotation and last sale information for the 
Shares.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

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

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2011-97 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2011-97. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Section, 100 F Street 
NE., Washington, DC 20549-1090, on official business days between 10 
a.m. and 3 p.m. Copies of the filing will also be available for 
inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEArca-2011-97 and should be submitted on or before 
January 31, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-185 Filed 1-9-12; 8:45 am]
BILLING CODE 8011-01-P


