
[Federal Register Volume 79, Number 123 (Thursday, June 26, 2014)]
[Notices]
[Pages 36361-36365]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14939]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72439; File No. SR-NYSEArca-2014-47]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendments No. 2 and No. 3 and Order Granting Accelerated Approval 
of a Proposed Rule Change, as Modified by Amendments No. 1, No. 2, and 
No. 3 To List and Trade Shares of Fidelity[supreg] Corporate Bond ETF 
Managed Shares Under NYSE Arca Equities Rule 8.600

June 20, 2014.

I. Introduction

    On April 16, 2014, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 
(``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\ a proposed rule 
change to list and trade shares (``Shares'') of the Fidelity Corporate 
Bond ETF (``Fund''). On April 30, 2014, the Exchange filed Amendment 
No. 1 to the proposed rule change, which amended and replaced the 
proposed rule change in its entirety.\4\ The proposed rule change, as 
modified by Amendment No. 1, was published for comment in the Federal 
Register on May 1, 2014.\5\ On June 16, 2014, the Exchange filed 
Amendment No. 2 to the proposed rule change.\6\ On June 19, 2014, the 
Exchange filed Amendment No. 3 to the proposed rule change.\7\ The 
Commission received no

[[Page 36362]]

comments on the proposal. The Commission is publishing this notice to 
solicit comments on Amendments No. 2 and No. 3 (collectively, 
``Amendments'') from interested persons and is approving the proposed 
rule change, as modified by Amendments No. 1, No. 2, and No. 3, on an 
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ Amendment No. 1 replaced SR-NYSEArca-2014-47 as originally 
filed and supersedes such filing in its entirety.
    \5\ See Securities Exchange Act Release No. 72068 (May 1, 2014), 
79 FR 25923 (``Notice'').
    \6\ In Amendment No. 2, the Exchange: (1) Clarified its 
description of the reference assets that may underlie the derivative 
investments held by the Fund; (2) deleted a representation that the 
Fund's investments in preferred securities are generally not 
expected to be exchange-listed, thus making clearer that the Fund 
may invest in both exchange-listed and non-exchange-listed preferred 
securities; (3) clarified that information regarding only U.S. 
exchange-listed options is available via the Options Price Reporting 
Authority (``OPRA''); and (4) corrected its characterization of 
investments such as swaps, forwards and currency-related derivatives 
by referring to them as ``OTC-traded derivative instruments'' rather 
than as ``OTC-traded derivative securities.''
    \7\ In Amendment No. 3, the Exchange: (1) Expanded the list of 
reference assets underlying the futures contracts which the Fund may 
hold to include both rates and indexes of rates; (2) added that 
futures contracts currently overlie both rates and indexes of rates; 
and (3) deleted an unnecessary reference to other entities in which 
the Fund may invest.
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II. Description of the Proposed Rule Change

    The Exchange has proposed to list and trade the Shares under NYSE 
Arca Equities Rule 8.600, which governs the listing and trading of 
Managed Fund Shares on the Exchange. The Shares will be offered by 
Fidelity Merrimack Street Trust (``Trust''). The Trust is registered 
with the Commission as an open-end management investment company.\8\ 
Fidelity Management & Research Company (``FMR'') will be the Fund's 
manager (``Manager''). Fidelity Investments Money Management, Inc. 
(``FIMM'') and other investment advisers, as described below, will 
serve as sub-advisers for the Fund (``Sub-Advisers''). FIMM will have 
day-to-day responsibility for choosing investments for the Fund. FIMM 
is an affiliate of FMR. Other investment advisers, which also are 
affiliates of FMR, will assist FMR with foreign investments, including 
Fidelity Management & Research (U.K.) Inc. (``FMR U.K.''), Fidelity 
Management & Research (Hong Kong) Limited (``FMR H.K.''), and Fidelity 
Management & Research (Japan) Inc. (``FMR Japan''). Fidelity 
Distributors Corporation (``FDC'') will be the distributor for the 
Fund's Shares. The Exchange represents that the Manager and the Sub-
Advisers are not broker-dealers but are affiliated with one or more 
broker-dealers and have implemented a firewall with respect to such 
broker-dealers regarding access to information concerning the 
composition of or changes to the Fund's portfolio and will be subject 
to procedures designed to prevent the use and dissemination of material 
non-public information regarding the Fund's portfolio.\9\
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    \8\ The Trust is registered under the 1940 Act. On April 17, 
2014, the Trust filed with the Commission an amendment to its 
registration statement on Form N-1A under the Securities Act of 1933 
(15 U.S.C. 77a) (``1933 Act'') and the 1940 Act relating to the Fund 
(File Nos. 333-186372 and 811-22796) (``Registration Statement''). 
The description of the operation of the Trust and the Fund herein is 
based, in part, on the Registration Statement. In addition, the 
Commission has issued an order granting certain exemptive relief to 
the Trust under the 1940 Act. See Investment Company Act Release No. 
30513 (May 10, 2013) (``Exemptive Order'') (File No. 812-14104).
    \9\ See Commentary .06 to NYSE Arca Equities Rule 8.600. The 
Exchange represents that in the event (a) the Manager or any of the 
Sub-Advisers become registered as a broker-dealer or become newly 
affiliated with a broker-dealer, or (b) any new adviser or sub-
adviser is a registered broker-dealer or becomes affiliated with a 
broker-dealer, they will implement a firewall with respect to their 
relevant personnel or broker-dealer affiliate regarding access to 
information concerning the composition of or changes to the 
portfolio and will be subject to procedures designed to prevent the 
use and dissemination of material non-public information regarding 
such portfolio.
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    The Exchange has made the following representations and statements 
regarding the Fund.\10\
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    \10\ Additional information regarding the Trust, the Fund, the 
Shares, investment strategies, investment restrictions, risks, net 
asset value (``NAV'') calculation, creation and redemption 
procedures, fees, portfolio holdings, disclosure policies, 
distributions, and taxes, among other information, is included in 
the Notice and the Registration Statement, as applicable. See Notice 
and Registration Statement, supra notes 5 and 8, respectively.
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Fidelity Corporate Bond ETF

    The Fund will seek a high level of current income and normally \11\ 
and will invest at least 80% of its assets in investment-grade 
corporate bonds and other corporate debt securities. The Fund may hold 
uninvested cash or may invest in cash equivalents such as money market 
securities, shares of short-term bond exchanged-traded funds registered 
under the 1940 Act (``ETFs''),\12\ or mutual funds or money market 
funds, including Fidelity central funds (which are special types of 
investment vehicles created by Fidelity for use by the Fidelity funds 
and other advisory clients).\13\ FMR also may invest the Fund's assets 
in debt securities of foreign issuers in addition to securities of 
domestic issuers.
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    \11\ The term ``normally'' includes, but is not limited to, the 
absence of adverse market, economic, political, or other conditions, 
including extreme volatility or trading halts in the fixed-income 
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, labor 
disruption, or any similar intervening circumstance.
    \12\ ETFs, which will be listed on a national securities 
exchange, include the following: Investment Company Units (as 
described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio 
Depositary Receipts (as described in NYSE Arca Equities Rule 8.100); 
and Managed Fund Shares (as described in NYSE Arca Equities Rule 
8.600). See Notice, supra note 5, at 25924.
    \13\ It is currently expected that the Fund will only invest in 
central funds that are money market funds. See id.
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Other Investments

    While FMR normally will invest at least 80% of assets of the Fund 
in investment-grade corporate bonds and other corporate debt 
securities, as described above, FMR may invest up to 20% of the Fund's 
assets in other securities and financial instruments, as summarized 
below.\14\
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    \14\ The Fund's holdings of investment-grade corporate bonds and 
other corporate debt securities are generally expected to be U.S. 
dollar denominated. See id.
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    In addition to corporate debt securities, the debt securities in 
which the Fund may invest are U.S. Government securities; repurchase 
agreements and reverse repurchase agreements; mortgage- and other 
asset-backed securities; loans; loan participations, loan assignments, 
and other evidences of indebtedness, including letters of credit, 
revolving credit facilities, and other standby financing commitments; 
structured securities; stripped securities; municipal securities; 
sovereign debt obligations; obligations of international agencies or 
supranational entities; and other securities believed to have debt-like 
characteristics, including hybrid securities, which may offer 
characteristics similar to those of a bond security such as stated 
maturity and preference over equity in bankruptcy. (The securities 
described in the preceding sentence, along with corporate debt 
securities, are collectively referred to herein as ``Debt 
Securities''.)
    The Fund may invest in securities of other investment companies, 
including shares of ETFs registered under the 1940 Act, closed-end 
investment companies (which include business development companies), 
unit investment trusts, and open-end investment companies. In addition, 
the Fund may invest in other exchange-traded products (``ETPs'') such 
as commodity pools.\15\ It is anticipated that the Fund's investments 
in other ETFs and ETPs will generally be limited to fixed-income ETFs 
and ETPs.
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    \15\ See Amendment No. 3, supra note 7.
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    The Fund may invest in inverse ETFs (also called ``short ETFs'' or 
``bear ETFs''), shares of which are expected to increase in value as 
the value of the underlying benchmark decreases.
    The Fund also may invest in leveraged ETFs, which seek to deliver 
multiples or inverse multiples of the performance of an index or other 
benchmark they track and which use derivatives in an effort to amplify 
the returns of the underlying index or benchmark.
    The Fund may invest in exchange-traded notes (``ETNs''), which are 
a type of senior, unsecured, unsubordinated debt security that is 
issued by a financial institution and that pays a return based on the 
performance of a reference asset. It is anticipated that the

[[Page 36363]]

Fund's investments in other ETNs will generally be limited to fixed-
income ETNs. The Fund may invest in leveraged ETNs.
    The Fund may invest in American Depositary Receipts (``ADRs'') as 
well as other ``hybrid'' forms of ADRs, including European Depositary 
Receipts (``EDRs'') and Global Depositary Receipts (``GDRs''), which 
are certificates evidencing ownership of shares of a foreign 
issuer.\16\
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    \16\ The Fund will invest only in ADRs, EDRs and GDRs that are 
traded on an exchange that is a member of the Intermarket 
Surveillance Group (``ISG'') or with which the Exchange has in place 
a comprehensive surveillance sharing agreement.
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    FMR may make investments in derivatives--regardless of whether the 
Fund may own the asset, instrument, or components of the index 
underlying the derivative, as applicable (e.g., a swap based on the 
Barclays U.S. Credit Bond Index)--and in forward-settling securities. 
The Fund's derivative investments, as described further below, may 
reference: Corporate debt securities; Debt Securities; rates; 
currencies; commodities; indexes related to corporate debt securities, 
Debt Securities, rates, currencies, securities prices, or commodities 
prices; specific assets or securities or baskets thereof; a basket of 
issuers or assets or an index of assets; a benchmark, asset class, or 
designated security or interest-rate indicator; or futures contracts 
(including commodity futures contracts).
    The Fund may conduct foreign currency transactions on a spot (i.e., 
cash) or forward basis (i.e., by entering into forward contracts to 
purchase or sell foreign currencies). The Fund may invest in options 
and futures relating to foreign currencies.
    The Fund may invest in exchange-listed futures. The exchange-listed 
futures contracts in which the Fund may invest will have various types 
of underlying instruments, including specific assets or securities, 
baskets of assets or securities, commodities or commodities indexes, 
indexes of securities prices, indexes of rates, or rates.\17\
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    \17\ See Amendment No. 3, supra note 7.
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    The Fund may invest in U.S. exchange-traded option, as well as 
over-the-counter (``OTC'') options. The OTC options in which the Fund 
may invest will have various types of underlying instruments, including 
specific assets or securities, baskets of assets or securities, indexes 
of securities or commodities prices, and futures contracts (including 
commodity futures contracts). To the extent that the Fund invests in 
OTC options, not more than 10% of the net assets of the Fund in the 
aggregate shall consist of futures contracts or exchange-traded options 
contracts whose principal market is not a member of ISG or is a market 
with which the Exchange does not have a comprehensive surveillance 
sharing agreement.
    The Fund may also buy and sell options on swaps (swaptions), which 
are generally options on interest-rate swaps. The Fund may hold swap 
agreements, a portion of which may be cleared swaps. The Fund may enter 
into, among other things, interest rate swaps (where the parties 
exchange a floating rate for a fixed rate), asset swaps (e.g., where 
parties combine the purchase or sale of a bond with an interest rate 
swap), total return swaps, and credit default swaps.
    The Fund may invest in lower-quality Debt Securities. Lower-quality 
Debt Securities include all types of debt instruments, including debt 
securities of foreign issuers, that have poor protection with respect 
to the payment of interest and repayment of principal, and they may be 
in default.
    The Fund may invest in preferred securities. Preferred securities, 
which may take the form of preferred stock, represent an equity or 
ownership interest in an issuer that pays dividends at a specified rate 
and have precedence over common stock in the payment of dividends.
    The Fund may invest in real estate investment trusts (``REITS''). 
The Fund may invest in exchange-listed and non-exchange-listed REITs.
    The Fund may invest in restricted securities, which are subject to 
legal restrictions on their sale.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's 
proposal to list and trade the Shares is consistent with the Exchange 
Act and the rules and regulations thereunder applicable to a national 
securities exchange.\18\ In particular, the Commission finds that the 
proposed rule change, as modified by Amendments No. 1, No. 2, and No. 
3, is consistent with Section 6(b)(5) of the Exchange Act,\19\ 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 remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest. The 
Commission notes that the Fund and the Shares must comply with the 
requirements of NYSE Arca Equities Rule 8.600 to be listed and traded 
on the Exchange.
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    \18\ 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).
    \19\ 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 
Exchange Act,\20\ which sets forth Congress' finding that it is in the 
public interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for and transactions in securities. Quotation and last-sale 
information for the Shares and underlying equity securities that are 
U.S. exchange listed--including ETFs, ETPs, ETNs, and ADRs; exchange-
traded REITs; exchange-traded preferred securities; and exchange-traded 
convertible securities--will be available via the Consolidated Tape 
Association (``CTA'') high speed line. Quotation and last-sale 
information for U.S. exchange-listed securities and futures will be 
available from the exchange on which they are listed. Quotation and 
last-sale information for U.S. exchange-listed options will be 
available via the OPRA.\21\
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    \20\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \21\ See Amendment No. 2, supra note 6.
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    Quotation information for OTC-Traded Securities, OTC-traded 
derivative instruments (such as options, swaps, forwards, and currency-
related derivatives), and investment company securities (excluding 
ETFs), may be obtained from brokers and dealers who make markets in 
such instruments or through nationally recognized pricing services 
through subscription agreements.\22\ The U.S. dollar value of foreign 
securities, instruments, and currencies can be derived by using foreign 
currency exchange rate quotations obtained from nationally recognized 
pricing services.
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    \22\ See id.
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    Information regarding market price and trading volume of the Shares 
will be continually available on a real-time basis throughout the day 
on brokers' computer screens and other electronic services.\23\ 
Information regarding the previous day's closing price and trading 
volume information for the Shares will be published daily in the 
financial section of newspapers.\24\
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    \23\ See Notice, supra note 5, 79 FR at 25930.
    \24\ See id.
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    In addition, the Portfolio Indicative Value, as defined in NYSE 
Arca Equities

[[Page 36364]]

Rule 8.600(c)(3), will be widely disseminated by one or more major 
market-data vendors at least every 15 seconds during the Core Trading 
Session.\25\ The dissemination of the Portfolio Indicative Value, 
together with the Disclosed Portfolio, will allow investors to 
determine the approximate value of the underlying portfolio of the Fund 
on a daily basis and will provide a close estimate of that value 
throughout the trading day.\26\
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    \25\ Several major market data vendors display or make widely 
available Portfolio Indicative Values taken from the CTA or other 
data feeds. See id. at 25931.
    \26\ See id.
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    The net asset value (``NAV'') of the Fund for the Shares will be 
calculated after 4:00 p.m. Eastern time each trading day.\27\ The 
Trust's Web site (www.fidelity.com), which will be publicly available, 
will include a form of the prospectus for the Fund that may be 
downloaded. The Trust's Web site will include additional quantitative 
information updated on a daily basis, including, on a per Share basis 
for the Fund, (a) the prior business day's NAV and the market closing 
price or, if that is unavailable, the mid-point of the bid/ask spread 
at the time of calculation of such NAV (the ``Bid/Ask Price''),\28\ and 
(b) a calculation of the premium or discount of the market closing 
price or, if that is unavailable, the Bid/Ask Price against the NAV.
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    \27\ See id. at 25931-32.
    \28\ The Bid/Ask Price of the Fund's Shares will be determined 
using the mid-point of the highest bid and the lowest offer on the 
Exchange as of the time of calculation of the Fund's NAV. The 
records relating to Bid/Ask Prices will be retained by the Fund and 
its service providers.
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    Further, 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. On each business day, before commencement of trading in Shares 
in the Core Trading Session (9:30 a.m. Eastern time to 4:00 p.m. 
Eastern time) on the Exchange, the Fund will disclose on the Trust's 
Web site the Disclosed Portfolio, as defined in NYSE Arca Equities Rule 
8.600(c)(2), that will form the basis for the Fund's calculation of NAV 
at the end of the business day.\29\ The Commission notes that the 
Exchange will obtain a representation from the issuer of the Shares 
that the NAV per Share will be calculated daily and that the NAV and 
the Disclosed Portfolio will be made available to all market 
participants at the same time.\30\
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    \29\ See id. at 25930. On a daily basis, the Fund will disclose 
for each portfolio security and other financial instrument of the 
Fund the following information: ticker symbol (if applicable), name 
of security or financial instrument, number of shares (if 
applicable) and dollar value of each of the securities and financial 
instruments held in the portfolio, and percentage weighting of the 
security and financial instrument in the portfolio. The Web site 
information will be publicly available at no charge. Under 
accounting procedures followed by the Fund, trades made on the prior 
business day (``T'') will be booked and reflected in NAV on the 
current business day (``T+1''). Accordingly, the Fund 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. See id.
    \30\ See id. at 25931.
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    In addition, the Fund will make available through the NSCC on each 
business day, prior to the opening of trading on the NYSE (currently 
9:30 a.m. Eastern time), the list of the names and the required number 
of shares of each Deposit Security and the amount of the Cash Component 
(or Cash Deposit) to be included in the current Portfolio Deposit 
(based on information at the end of the previous business day) for the 
Fund.\31\ The Portfolio Deposit will be applicable, subject to any 
adjustments, in order to effect purchases of Creation Units until such 
time as the next-announced Portfolio Deposit composition is made 
available.\32\
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    \31\ See id. at 25929.
    \32\ See id.
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    Further, the Commission notes that personnel who make decisions on 
the Fund's portfolio composition must be subject to procedures designed 
to prevent the use and dissemination of material nonpublic information 
regarding the open-end fund's portfolio.\33\
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    \33\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
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    The Exchange represents that the Manager and the Sub-Advisers are 
not broker-dealers but are affiliated with one or more broker-dealers 
and have implemented a firewall with respect to such broker-dealers 
regarding access to information concerning the composition of or 
changes to the Fund's portfolio and will be subject to procedures 
designed to prevent the use and dissemination of material non-public 
information regarding the Fund's portfolio.\34\ The Exchange also has a 
general policy prohibiting the distribution of material, non-public 
information by its employees.
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    \34\ See supra note 9 and accompanying text.
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    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares.\35\ Trading in Shares will be halted if the 
circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been 
reached. Trading also may be halted because of market conditions or for 
reasons that, in the view of the Exchange, make trading in the Shares 
inadvisable. These may include: (1) The extent to which trading is not 
occurring in the securities or the financial instruments constituting 
the Disclosed Portfolio of the Fund; or (2) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. Trading in the Shares will be subject 
to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth 
circumstances under which Shares may be halted.
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    \35\ See NYSE Arca Equities Rule 7.12.
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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 rules governing the trading of equity securities.\36\
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    \36\ See NYSE Arca Equities Rule 8.600(d)(2)(C)(ii).
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    In support of this proposal, the Exchange has made additional 
representations, including:
    (1) The Shares will conform to the initial and continuing listing 
criteria under NYSE Arca Equities Rule 8.600.
    (2) 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.\37\
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    \37\ The Financial Industry Regulatory Authority (``FINRA'') 
surveils trading on the Exchange pursuant to a regulatory services 
agreement. The Exchange is responsible for FINRA's performance under 
this regulatory services agreement. See Notice, supra note 5, 79 FR 
at 25931.
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    (3) FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading in the Shares and underlying exchange-traded options, 
futures, exchange-traded equity securities (including ADRs, EDRs, and 
GDRs), and other exchange-traded instruments with other markets and 
other entities that are members of the ISG, and FINRA, on behalf of the 
Exchange, may obtain trading information regarding trading in the 
Shares and underlying exchange-traded options, futures, exchange-traded 
equity securities (including ADRs, EDRs, and GDRs), and other exchange-
traded instruments from such markets and other entities. In addition, 
the Exchange may obtain information regarding trading in the Shares and 
underlying exchange-traded options, futures, exchange-traded equity 
securities (including ADRs, EDRs, and GDRs), and other exchange-traded 
instruments from markets and other entities that are members of ISG or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement. In addition, FINRA, on

[[Page 36365]]

behalf of the Exchange, is able to access, as needed, trade information 
for certain fixed-income securities held by the Fund reported to 
FINRA's Trade Reporting and Compliance Engine.
    (4) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.
    (5) Prior to the commencement of trading, the Exchange will inform 
its Equity Trading Permit Holders in an Information Bulletin 
(``Bulletin'') of the special characteristics and risks associated with 
trading the Shares. Specifically, the Bulletin will discuss the 
following: (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 Equity Trading Permit 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 Equity Trading Permit Holders deliver a prospectus to 
investors purchasing newly issued Shares prior to or concurrently with 
the confirmation of a transaction; and (6) trading information.
    (6) For initial and continued listing, the Fund will be in 
compliance with Rule 10A-3 under the Exchange Act,\38\ as provided by 
NYSE Arca Equities Rule 5.3.\39\
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    \38\ 17 CFR 240.10A-3.
    \39\ See Notice, supra note 5, 79 FR at 25931.
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    (7) The Fund's investments will be consistent with its investment 
objective.
    (8) The Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid assets (calculated at the time of investment), 
including Rule 144A securities deemed illiquid by the Manager or Sub-
Advisers. The Fund will monitor its portfolio liquidity on an ongoing 
basis to determine whether, in light of current circumstances, an 
adequate level of liquidity is being maintained, and will consider 
taking appropriate steps in order to maintain adequate liquidity if, 
through a change in values, net assets, or other circumstances, more 
than 15% of the Fund's net assets are held in illiquid assets.
    (9) A minimum of 100,000 Shares will be outstanding at the 
commencement of trading on the Exchange.

This order is based on all of the Exchange's representations, including 
those set forth above and in the Notice.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Exchange Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning whether the Amendments are 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-2014-47 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2014-47. 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 Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. 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-2014-47, and should 
be submitted on or before July 17, 2014.

V. Accelerated Approval of Proposed Rule Change as Modified by 
Amendments No. 1, No. 2, and No. 3

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendments Nos. 1, No. 2, and No. 3, prior to 
the thirtieth day after the date of publication of notice in the 
Federal Register. Amendment No. 2 supplements the proposed rule change 
by describing more clearly and specifically certain of the securities 
and financial instruments in which the Fund may invest, including the 
availability of price information for those investments. This 
additional information about the Fund's underlying investments assisted 
the Commission's analysis regarding the intraday trading of the Shares. 
Amendment No. 3 supplements the proposed rule change by adding that the 
futures contacts in which the Fund may invest may overlie both rates or 
indexes of rates. This additional information regarding the underlying 
investments of the Fund assisted the Commission analysis regarding the 
other investments which may be made by the Fund. Accordingly, the 
Commission finds good cause, pursuant to Section 19(b)(2) of the Act, 
to approve the proposed rule change, as modified by Amendments No. 1, 
No. 2, and No. 3, on an accelerated basis.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act,\40\ that the proposed rule change, as modified by 
Amendments No. 1, No. 2, and No. 3 (SR-NYSEArca-2014-47), be, and it 
hereby is, approved on an accelerated basis.
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    \40\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\41\
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    \41\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14939 Filed 6-25-14; 8:45 am]
BILLING CODE 8011-01-P


