[Federal Register Volume 78, Number 10 (Tuesday, January 15, 2013)]
[Notices]
[Pages 3053-3055]
[FR Doc No: 2013-00662]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68608; File No. SR-BX-2013-002]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating To
Routing Fee

January 9, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 2, 2013, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Chapter XV, Section 2 entitled ``BX
Options Market--Fees and Rebates'' to amend various fees for routing
options to away markets.
    The text of the proposed rule change is provided in Exhibit 5. The
text of the proposed rule change is also available on the Exchange's
Web site at http://nasdaqomxbx.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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 Exchange 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 these 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 aspects of such
statements.

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

1. Purpose
    The purpose of this filing is to recoup costs that the Exchange
incurs for routing and executing certain orders in equity options to
away markets. The Exchange proposes to amend Routing Fees for the
following away markets: BATS Exchange, Inc. (``BATS''), BOX Options
Exchange LLC (``BOX''), the Chicago Board Exchange Incorporated
(``CBOE''), the International Securities Exchange LLC (``ISE''), the
NASDAQ Options Market LLC (``NOM''), NYSE ARCA, Inc. (``NYSE Arca'')
and NASDAQ OMX PHLX LLC (``Phlx''). These away markets amended their
transaction fees and the Exchange desires to amend its Routing Fees to
reflect the amended transaction cost for routing to these away markets.
In addition, the Exchange proposes to adopt Routing Fees when routing
orders to Miami International Securities Exchange, LLC (``MIAX'').
    BX Options Rules at Chapter XV, Section 2(4) included the following
fees for routing Customer, Firm, Market Maker, Broker-Dealer and
Professional orders:

----------------------------------------------------------------------------------------------------------------
                                                                                Firm/Market
                            Exchange                                 Customer      maker/Broker-   Professional
                                                                                dealer
----------------------------------------------------------------------------------------------------------------
BATS (Penny Pilot)..............................................           $0.55           $0.55           $0.55
BOX.............................................................           $0.11           $0.55           $0.11
CBOE............................................................           $0.11           $0.55           $0.31
CBOE orders greater than 99 contracts in ETFs, ETNs and HOLDRS).           $0.29             N/A           $0.31
C2..............................................................           $0.55           $0.55           $0.55
ISE (Standard)..................................................           $0.11           $0.55           $0.29
ISE (Select Symbols)............................................           $0.35           $0.55           $0.39
NOM.............................................................           $0.55           $0.55           $0.55
NYSE Arca (Penny Pilot).........................................           $0.55           $0.55           $0.55
NYSE Amex.......................................................           $0.11           $0.55           $0.31
PHLX (for all options other than PHLX Select Symbols)...........           $0.11           $0.55           $0.36
PHLX Select Symbols.............................................           $0.50           $0.55           $0.55
----------------------------------------------------------------------------------------------------------------

    BX currently recoups clearing and transaction charges incurred by
the Exchange as well as certain other costs incurred by the Exchange
when routing to away markets, such as administrative and technical
costs associated with operating the order router, membership fees at
away markets, and technical costs associated with routing.\3\ For
example, BX incurs costs related to the Nasdaq Options Services LLC
(``NOS''), a member of the Exchange and the Exchange's exclusive order
router.\4\ Each time NOS routes an order to an away market, NOS is
charged a clearing fee \5\ and, in the case of certain exchanges, a
transaction fee is also charged in certain symbols, which fees are
passed through to the Exchange. The Exchange proposes to recoup a
portion of the above costs along with the away market's routing fee
when routing to an away market. The Exchange is proposing to amend
various away market fees to account for amendments to fees to remove
liquidity at those markets. The Exchange currently assesses an $0.11
per contract fixed routing fee in addition to the away market's
transaction fee.
---------------------------------------------------------------------------

    \3\ In addition to membership fees and transaction fees, the
Exchange also incurs an Options Regulatory Fee (``ORF'') when it
routes to an away market that assesses an ORF.
    \4\ See BX Rules at Chapter VI, Section 11(e) (Order Routing).
    \5\ The Options Clearing Corporation (``OCC'') assesses $0.01
per contract side.

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

    BATS assesses the following fees for removing liquidity from the
BATS Options order book in all other securities, or Non-Penny Pilot
Securities: $0.84 per contract for a Professional, Firm or Market Maker
order and $0.75 per contract for a Customer order.\6\ The Exchange is
proposing to adopt a new category of Routing Fees entitled ``BATS (Non-
Penny Pilot)'' and assess the following Routing Fees: $0.94 per
contract for a Firm/Market Maker/Broker-Dealer and $0.86 per contract
for a Customer.\7\
---------------------------------------------------------------------------

    \6\ See BATS BZX Exchange Fee Schedule.
    \7\ The Exchange computed the BATS Non-Penny Pilot Routing Fees
by adding an $0.11 per contract fixed fee to the away market's
transaction fee. The Exchange proposes to cap the Firm/Market Maker/
Broker-Dealer and Professional BATS Routing Fees at $0.94 per
contract similar to NYSE Arca and BX Options Routing Fees.
---------------------------------------------------------------------------

    BOX amended its Professional fees to assess a Professional non-
auction transaction fee of $0.20 per contact.\8\ The Exchange is
proposing to increase the BOX Professional Routing Fee from $0.11 to
$0.31 per contract.\9\
---------------------------------------------------------------------------

    \8\ See BOX Options Exchange Fee Schedule.
    \9\ The Exchange computed the BOX Professional Routing Fee by
adding an $0.11 per contract fixed fee to the away market's
transaction fee.
---------------------------------------------------------------------------

    CBOE amended its fees in Select Symbols to assess a Professional
transaction fee of $0.30 per contract.\10\ The Exchange is proposing to
increase the CBOE Professional Routing Fee from $0.31 to $0.41 per
contract.\11\ In addition, the Exchange is proposing to amend the
Professional Routing Fee for CBOE orders greater than 99 contracts in
ETFs, ETNs and HOLDRs of $0.31 per contract to ``N/A.'' The Exchange
noted a $0.31 per contract fee, which is the same fee for the
Professional CBOE Routing Fee, at the time that the Exchange created
the CBOE orders greater than 99 contracts Routing Fee category. This
was an error because the Routing Fees for CBOE orders greater than 99
contracts only apply to Customer orders and not Professional orders.
The Exchange has never assessed the Professional Routing Fee for CBOE
orders greater than 99 contracts on a Professional because it was only
able to route Customer orders over 99 contracts to CBOE in this
category. The Exchange proposes to amend the fee rate to display ``N/
A'' because a Professional would not qualify for this category.
Additionally, the Exchange proposes to update the title of the Routing
Fee to ``CBOE orders greater than 99 contracts in ETFs and ETNs'' to
remove the HOLDRs product, which is no longer listed on CBOE.
---------------------------------------------------------------------------

    \10\ See CBOE's Fees Schedule.
    \11\ The Exchange computed the CBOE Professional Routing Fee by
adding an $0.11 per contract fixed fee to the away market's
transaction fee.
---------------------------------------------------------------------------

    ISE amended its Professional Customer Non-Select Symbols or
``Standard'' fee to $0.20 per contract.\12\ The Exchange is proposing
to increase the ISE (Standard) Professional Routing Fee from $0.29 to
$0.31 per contract.\13\ Additionally, ISE amended its Professional
Customer taker fee in Select Symbols to $0.33 per contract.\14\ The
Exchange is proposing to increase the ISE (Select Symbols) Professional
Routing Fee from $0.39 to $0.44 per contract.\15\
---------------------------------------------------------------------------

    \12\ See ISE's Fee Schedule.
    \13\ The Exchange computed the ISE (Standard) Professional
Routing Fee by adding an $0.11 per contract fixed fee to the away
market's transaction fee.
    \14\ See ISE's Fee Schedule.
    \15\ The Exchange computed the ISE (Select Symbols) Professional
Routing Fee by adding an $0.11 per contract fixed fee to the away
market's transaction fee.
---------------------------------------------------------------------------

    The Exchange proposes to rename the ``NOM'' Routing Fees as ``NOM
(Penny Pilot)'' and adopt a new category of NOM Routing Fees entitled
``NOM (Non-Penny Pilot).'' NOM assesses the following Non-Penny Pilot
Fees for Removing Liquidity: $0.82 per contract for a Customer and NOM
Market Maker and $0.89 per contract for a Professional, Firm and Non-
NOM Market Maker.\16\ The Exchange is proposing to adopt NOM Non-Penny
Pilot Routing Fees as follows: $0.93 per contract for a Customer and
$0.94 per contract for a Firm/Market Maker/Broker-Dealer and
Professional.\17\
---------------------------------------------------------------------------

    \16\ See NASDAQ Stock Market LLC Rules at Chapter XV, Section 2.
    \17\ The Exchange computed the NOM Non-Penny Pilot Customer
Routing Fee by adding an $0.11 per contract fixed fee to the away
market's transaction fee. With respect to the Firm/Market Maker/
Broker-Dealer and Professional Routing Fees, the Exchange determined
to cap the fees at $0.94 per contract. The Exchange similarly capped
Routing Fees for BATS and NYSE Arca.
---------------------------------------------------------------------------

    NYSE Arca assesses the following take liquidity fees: $0.79 per
contact for a Customer and $0.85 per contract for a Firm and Broker-
Dealer.\18\ The Exchange is proposing to adopt new Routing Fees for
NYSE Arca entitled ``NYSE Arca (Non-Penny Pilot)'' Routing Fees as
follows: $0.90 per contract for a Customer and Professional and $0.94
for a Firm/Market Maker/Broker-Dealer Routing Fees.\19\
---------------------------------------------------------------------------

    \18\ See NYSE ARCA General Options and Trading Permit (OTP)
Fees.
    \19\ The Exchange computed the NYSE Arca Non-Penny Pilot
Customer and Professional Routing Fees by adding an $0.11 per
contract fixed fee to the away market's transaction fee. Because
NYSE Arca does not have a Professional category, Professional orders
would be routed as Customer to NYSE Arca. In light of this, the
Professional Routing Fee was computed the same as the Customer
Routing Fee. With respect to the Firm/Market Maker/Broker-Dealer
Routing Fees, the Exchange added an $0.11 per contract fixed fee to
the away market's transaction fee and determined to cap the Routing
Fees at $0.94 per contract similar to BATS and BX Options.
---------------------------------------------------------------------------

    Phlx recently amended its fees in Select Symbols to assess no
Customer Fee to Remove Liquidity.\20\ The Exchange is proposing to
decrease the Phlx Select Symbols Customer Routing Fee from $0.50 to
$0.11 per contract.\21\
---------------------------------------------------------------------------

    \20\ See SR-Phlx-2013-01 (not yet published). Phlx lists its
Select Symbols in Section I of its Pricing Schedule.
    \21\ The Exchange is proposing to assess the $0.11 per contract
fixed fee as there is no transaction fee when routing a Customer
order to Phlx in Select Symbols.
---------------------------------------------------------------------------

    MIAX recently filed to adopt transaction fees, which included the
following fees applicable to all classes of options: $0.00 for a
Priority Customer, $0.45 for a Non-MIAX Market Maker, $0.45 for a
Broker-Dealer and $0.25 per contract for a Public Customer other than a
Priority Customer.\22\ The Exchange is proposing to adopt MIAX Routing
Fees, entitled ``MIAX,'' as follows: $0.11 per contract for a Customer
and $0.36 for a Professional and $0.55 per contract for a Firm/Market
Maker/Broker-Dealer.\23\
---------------------------------------------------------------------------

    \22\ See MIAX's Fee Schedule.
    \23\ The Exchange computed the MIAX Customer and Professional
Routing Fees by adding an $0.11 per contract fixed fee to the away
market's transaction fee. With respect to the Firm, Market Maker and
Broker-Dealer Routing Fees, the Exchange determined to cap the fees
at $0.55 per contract similar to other Routing Fees.
---------------------------------------------------------------------------

    The Exchange is not proposing to otherwise amend other Routing Fees
not specifically mentioned. As with all fees, the Exchange may adjust
these Routing Fees in response to competitive conditions by filing a
new proposed rule change.
2. Statutory Basis
    BX believes that the proposed rule changes are consistent with the
provisions of Section 6 of the Act,\24\ in general, and with Section
6(b)(4) of the Act,\25\ in particular, in that they provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which BX operates or controls.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78f.
    \25\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange's amendments to the BATS, BOX, CBOE, ISE, NOM, NYSE
Arca and Phlx Routing fees as well as the adoption of MIAX Routing Fees
are reasonable because these fees are designed to recoup costs that are
incurred by the Exchange when routing certain orders to these away
markets on behalf of members. Each destination market's transaction
charge varies and

there is a standard clearing charge for each transaction incurred by
the Exchange along with other administrative and technical costs \26\
that are incurred by the Exchange. The Exchange believes that the
proposed Routing Fees would enable the Exchange to recover the
respective remove fee assessed to each market participant by the away
market, plus clearing and other administrative and technical fees for
the execution of orders routed to BX and executed on these away
markets.
---------------------------------------------------------------------------

    \26\ The Exchange utilizes the NOS a member of the Exchange and
the Exchange's exclusive order router to route orders in options
listed and open for trading on the BX to destination markets. See
Securities Exchange Act Release No. 67256 (June 26, 2012) 77 FR
39277 (July 2, 2012) (SR-BX-2012-030).
---------------------------------------------------------------------------

    The Exchange also believes that the amended Routing Fees are
equitable and not unfairly discriminatory because these fees would be
uniformly applied to all market participant orders that are routed to
the respective away market to cover the cost to route the order. The
Exchange applied a similar methodology in calculating the routing fees
for each market participant by adding not more than a $0.11 per
contract fee to the away market's remove fee to determine the NOM
Routing Fees.\27\
---------------------------------------------------------------------------

    \27\ See NASDAQ Stock Market LLC Rules at Chapter XV, Section
2(4).
---------------------------------------------------------------------------

    The Exchange believes that the technical amendments to the titles
of the Routing Fees are reasonable, equitable and not unfairly
discriminatory as the amendments add clarity to the fee categories.

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

    BX does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. The Exchange believes that the rule change
would allow the Exchange to recoup its costs when routing orders
designated as available for routing by the market participant. Today,
other options exchanges also assess similar fees to recoup costs
incurred by the Exchange to route orders to away markets. Further, a BX
Options Participant may designate an order as not available for routing
to avoid Routing Fees.\28\ For these reasons, the Exchange does not
believe that the proposed fees impose a burden on competition.
---------------------------------------------------------------------------

    \28\ See BX Rules at Chapter VI, Section 11(e).
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\29\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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<EMAIL_ADDRESS>Please include
File Number SR-BX-2013-002 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-BX-2013-002. 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 20549-1090, on official business days between the hours
of 10:00 a.m. and 3:00 p.m. Copies of such 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-BX-
2013-002, and should be submitted on or before February 5, 2013.

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

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00662 Filed 1-14-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: October 18, 2005 (Volume 70, Number 200)]
[Notices]
[Page 60555]
[DOCID:fr18oc05-100]

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

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[FEMA-1606-DR]

Texas; Amendment No. 5 to Notice of a Major Disaster Declaration

AGENCY: Federal Emergency Management Agency, Emergency Preparedness and
Response Directorate, Department of Homeland Security.

ACTION: Notice.

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

SUMMARY: This notice amends the notice of a major disaster declaration
for the State of Texas (FEMA-1606-DR), dated September 24, 2005, and
related determinations.

EFFECTIVE DATE: October 1, 2005.

FOR FURTHER INFORMATION CONTACT: Magda Ruiz, Recovery Division, Federal
Emergency Management Agency, Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA) hereby gives notice that pursuant to the authority vested in the
Acting Under Secretary for Emergency Preparedness and Response,
Department of Homeland Security, under Executive Order 12148, as
amended, Thomas P. Davies, of FEMA is appointed to act as the Federal
Coordinating Officer for this declared disaster.
    This action terminates my appointment of Alexander S. Wells as
Federal Coordinating Officer for this disaster.

(The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund Program; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services Program; 97.034,
Disaster Unemployment Assistance (DUA); 97.046, Fire Management
Assistance; 97.048, Individuals and Households Housing; 97.049,
Individuals and Households Disaster Housing Operations; 97.050
Individuals and Households Program-Other Needs, 97.036, Public
Assistance Grants; 97.039, Hazard Mitigation Grant Program)

R. David Paulison,
Acting Under Secretary, Emergency Preparedness and Response, Department
of Homeland Security.
[FR Doc. 05-20772 Filed 10-17-05; 8:45 am]

BILLING CODE 9110-10-P


[Federal Register Volume 76, Number 89 (Monday, May 9, 2011)]
[Notices]
[Pages 26776-26777]
[FR Doc No: 2011-11422]

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

SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the
Government in the Sunshine Act, Public Law 94-409, that the Securities
and Exchange Commission will hold a Closed Meeting on Thursday, May 12,
2011 at 2 p.m.
    Commissioners, Counsel to the Commissioners, the Secretary to the
Commission, and recording secretaries will attend the Closed Meeting.
Certain staff members who have an interest in the matters also may be
present.
    The General Counsel of the Commission, or his designee, has
certified that, in his opinion, one or more of the exemptions set forth
in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR
200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the
scheduled matters at the Closed Meeting.

    Commissioner Casey, as duty officer, voted to consider the items
listed for the Closed Meeting in a closed session.
    The subject matter of the Closed Meeting scheduled for Thursday,
May 12, 2011 will be:

    Institution and settlement of injunctive actions;
    Institution and settlement of administrative proceedings;
    Adjudicatory matters; and
    Other matters relating to enforcement proceedings.

    At times, changes in Commission priorities require alterations in
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have
been added, deleted or postponed, please contact:
    The Office of the Secretary at<PHONE_NUMBER>.

    Dated: May 5, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-11422 Filed 5-5-11; 4:15 pm]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 124 (Monday, June 29, 2015)]
[Notices]
[Pages 36996-36997]
[FR Doc No: 2015-15833]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2015-D-2104]

Assessment of Radiofrequency-Induced Heating in the Magnetic
Resonance Environment for Multi-Configuration Passive Medical Devices;
Draft Guidance for Industry and Food and Drug Administration Staff;
Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
the availability of the draft guidance entitled ``Assessment of
Radiofrequency-Induced Heating in the Magnetic Resonance (MR)
Environment for Multi-Configuration Passive Medical Devices.'' The
purpose of this guidance is to provide an assessment paradigm for
radiofrequency (RF)-induced heating on, or near, multi-component, or
multi-configuration, passive medical devices in the magnetic resonance
environment. This draft guidance is not final nor is it in effect at
this time.

DATES: Although you can comment on any guidance at any time (see 21 CFR
10.115(g)(5)), to ensure that the Agency considers your comment of this
draft guidance before it begins work on the final version of the
guidance, submit either electronic or written comments on the draft
guidance by August 28, 2015.

ADDRESSES: An electronic copy of the guidance document is available for
download from the Internet. See the SUPPLEMENTARY INFORMATION section
for information on electronic access to the guidance. Submit written
requests for a single hard copy of the draft guidance document entitled
``Assessment of Radiofrequency-Induced Heating in the Magnetic
Resonance (MR) Environment for Multi-Configuration Passive Medical
Devices'' to the Office of the Center Director, Guidance and Policy
Development, Center for Devices and Radiological Health, Food and Drug

Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5431, Silver
Spring, MD 20993-0002. Send one self-addressed adhesive label to assist
that office in processing your request.
    Submit electronic comments on the draft guidance to http://www.regulations.gov. Submit written comments to the Division of Dockets
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852. Identify comments with the docket number
found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Wolfgang Kainz, Center for Devices and
Radiological Health, Food and Drug Administration, 10903 New Hampshire
Ave., Bldg. 62, Rm. 1129, Silver Spring, MD 20993-0002,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    FDA is announcing the availability of a draft guidance to provide
an assessment paradigm for RF-induced heating on or near multi-
component or multi-configuration passive medical devices in the MR
environment. During MR scanning, applied RF excitation pulses induce
currents that can cause heating of electrically conductive materials.
RF-induced heating of medical devices made with conductive materials
may lead to patient burns. To minimize the risk of patient burns during
MR scanning, sponsors should comprehensively assess devices in all
configurations and combinations. However, multi-component passive
devices, such as orthopedic fixation devices, may permit a very large
number of possible device configurations and combinations of individual
components. Testing all possibilities may be impracticable and
unnecessary. This draft guidance provides an approach to identify a
manageable number of device configurations or combinations for the
testing of RF-induced heating in the MR environment. Additionally, this
draft guidance provides recommendations on how to assess RF-induced
device heating for multi-configuration passive medical devices.

II. Significance of Guidance

    This draft guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). The draft guidance, when
finalized, will represent the current thinking of FDA on the assessment
of RF-induced heating of multi-component, or multi-configuration,
passive medical devices in the MR environment. It does not establish
any rights for any person and is not binding on FDA or the public. You
can use an alternative approach if it satisfies the requirements of the
applicable statutes and regulations.

III. Electronic Access

    Persons interested in obtaining a copy of the draft guidance may do
so by downloading an electronic copy from the Internet. A search
capability for all Center for Devices and Radiological Health guidance
documents is available at http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/default.htm. Guidance
documents are also available at http://www.regulations.gov. Persons
unable to download an electronic copy of ``Assessment of
Radiofrequency-Induced Heating in the Magnetic Resonance (MR)
Environment for Multi-Configuration Passive Medical Devices'' may send
an email request to<EMAIL_ADDRESS>to receive an electronic
copy of the document. Please use the document number 1500001 to
identify the guidance you are requesting.

IV. Paperwork Reduction Act of 1995

    This draft guidance refers to previously approved collections of
information found in FDA regulations. These collections of information
are subject to review by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The
collections of information in 21 CFR part 814 have been approved under
OMB control number 0910-0231.

V. Comments

    Interested persons may submit either electronic comments regarding
this document to http://www.regulations.gov or written comments to the
Division of Dockets Management (see ADDRESSES). It is only necessary to
send one set of comments. Identify comments with the docket number
found in brackets in the heading of this document. Received comments
may be seen in the Division of Dockets Management between 9 a.m. and 4
p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

    Dated: June 23, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015-15833 Filed 6-26-15; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 77, Number 195 (Tuesday, October 9, 2012)]
[Notices]
[Pages 61453-61457]
[FR Doc No: 2012-24738]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67963; File No. SR-NYSEArca-2012-82]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change Relating to the Listing and Trading of
FlexShares Ready Access Variable Income Fund Under NYSE Arca Equities
Rule 8.600

October 2, 2012.

I. Introduction

    On August 7, 2012, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of
FlexShares Ready Access Variable Income Fund (``Fund'') under NYSE Arca
Equities Rule 8.600. The proposed rule change was published for comment
in the Federal Register on August 23, 2012.\3\ The Commission received
no comments on the proposed rule change. This order grants approval of
the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 67682 (August 17,
2012), 77 FR 51081 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange proposes to list and trade Shares of the Fund pursuant
to NYSE Arca Equities Rule 8.600, which governs the listing and trading
of Managed Fund Shares on the Exchange. The Shares will be offered by
FlexShares Trust (``Trust''), a statutory trust organized under the
laws of Maryland and registered with the Commission as an open-end
management investment company.\4\ The investment adviser to the Fund
will be Northern Trust Investments, Inc. (``Investment Adviser'').
Foreside Fund Services, LLC will serve as the distributor for the Fund
(``Distributor''). J.P. Morgan Chase Bank, N.A. will serve as the
administrator, custodian, and transfer agent for the Fund (``Transfer
Agent'').
---------------------------------------------------------------------------

    \4\ The Trust is registered under the 1940 Act (``1940 Act'').
On June 28, 2012, the Trust filed with the Commission a post-
effective amendment to Form N-1A under the Securities Act of 1933
(``1933 Act'') and the 1940 Act relating to the Fund (File Nos. 333-
173967 and 811-22555) (``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.
30068 (May 22, 2012) (File No. 812-13868) (``Exemptive Order'').
---------------------------------------------------------------------------

    The Investment Adviser is affiliated with a broker-dealer and has
implemented a ``fire wall'' with respect to such broker-dealer
regarding access to information concerning the composition and/or
changes to the Fund's portfolio. If a sub-adviser that is also
affiliated with a broker-dealer is hired for the Fund, such sub-adviser
will implement a fire wall with respect to such broker-dealer regarding
access to information concerning the composition and/or changes to the
portfolio. In the event (a) the Investment Adviser or any sub-adviser
becomes newly affiliated with a broker-dealer, or (b) any new manager,
adviser, or sub-adviser becomes affiliated with a broker-dealer, it
will implement a fire wall with respect to such broker-dealer regarding
access to information concerning the composition and/or changes to the
portfolio, and will be subject to procedures designed to prevent the
use and dissemination of material, non-public information regarding
such portfolio.\5\
---------------------------------------------------------------------------

    \5\ See NYSE Arca Equities Rule 8.600, Commentary .06.
---------------------------------------------------------------------------

    The Fund will not be an index fund. The Fund will be actively
managed and will not seek to replicate the performance of a specified
index.
    The Fund will seek maximum current income consistent with the
preservation of capital and liquidity. The Fund will seek to achieve
its investment objective by investing under normal circumstances \6\ at
least 65% of its total assets in a non-diversified portfolio \7\ of
fixed income instruments, including bonds, debt securities, and other
similar instruments issued by U.S. and non-U.S. public and private
sector entities.\8\ Such issuers include, without limitation, U.S. and
non-U.S. governments and their subdivisions, agencies,
instrumentalities, or sponsored enterprises, U.S. state and local
governments, international agencies and supranational entities, and
U.S. and non-U.S. private-sector entities, such as corporations and
banks. The average portfolio duration \9\ of the Fund will vary based
on The Northern Trust Company Investment Policy Committee's forecast
for interest rates and will normally not exceed one year. The dollar-
weighted average portfolio maturity of the Fund is normally not
expected to exceed two years.
---------------------------------------------------------------------------

    \6\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of 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 or labor disruption, or any similar intervening
circumstance.
    \7\ The Fund will be ``non-diversified'' under the 1940 Act and
may invest more of its assets in fewer issuers than ``diversified''
funds.
    \8\ ``Fixed income instruments'' includes, but is not limited
to: securities issued or guaranteed by the U.S. Government, its
agencies, or government sponsored enterprises; corporate debt
securities, including corporate commercial paper; mortgage-backed
and other asset-backed securities; inflation-indexed bonds issued
both by governments and corporations; bank capital and trust
preferred securities; fixed and variable rate loan participations
and assignments; bank certificates of deposit, fixed time deposits
and bankers' acceptances; repurchase agreements on fixed income
instruments; and reverse repurchase agreements on fixed income
instruments.
    \9\ Duration measures the price sensitivity of a fixed-income
security to changes in interest rates. Interest rate changes have a
greater effect on the price of fixed-income securities with longer
durations.
---------------------------------------------------------------------------

    The Fund will invest in debt securities that are, at the time of
investment, rated within the top four rating categories by a Nationally
Recognized Statistical Rating Organization (``NRSRO'') or of comparable
quality as determined by the Investment Adviser.\10\ Subsequent to its
purchase by the Fund, a rated security may cease to be rated or its
rating may be reduced below investment grade or a security may no
longer be considered to be investment grade. In such case, the Fund is
not required to dispose of the security. The Investment Adviser will
determine what action,

including potential sale, is in the best interest of the Fund.
---------------------------------------------------------------------------

    \10\ In determining whether a security is of ``comparable
quality,'' the Investment Adviser may consider, for example, whether
the issuer of the security has issued other rated securities,
whether the obligations under the security are guaranteed by another
entity and the rating of such guarantor (if any), whether and (if
applicable) how the security is collateralized, other forms of
credit enhancement (if any), the security's maturity date, liquidity
features (if any), relevant cash flow(s), valuation features, other
structural analysis, macroeconomic analysis, and sector or industry
analysis.
---------------------------------------------------------------------------

    The Fund may invest, without limitation, in fixed income
instruments of foreign issuers in developed and emerging markets,\11\
including, without limitation, debt securities of emerging-market
foreign governments in the following regions: Asia and Pacific, Central
and South America, Eastern Europe, Africa, and the Middle East. Within
these regions, the Fund may invest in countries such as Brazil, Chile,
China, Columbia, Czech Republic, Egypt, Hungary, India, Indonesia,
Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South
Africa, South Korea, Taiwan, Thailand, and Turkey, although this list
may change as market developments occur and may include additional
emerging market countries that conform to selected ratings, liquidity,
and other criteria. Notwithstanding the foregoing, the Fund will not
invest more than 20% of its total assets in fixed income instruments of
foreign issuers in emerging markets.\12\
---------------------------------------------------------------------------

    \11\ While there is no universally accepted definition of what
constitutes an ``emerging market,'' in general, emerging market
countries are characterized by developing commercial and financial
infrastructure with significant potential for economic growth and
increased capital market participation by foreign investors. The
Investment Adviser will look at a variety of commonly-used factors
when determining whether a country is an ``emerging'' market. In
general, the Investment Adviser will consider a country to be an
emerging market if:
    (1) It is either (a) classified by the World Bank in the lower
middle or upper middle income designation for one of the past 3
years (i.e., per capita gross national product of less than U.S.
$9,385), or (b) classified by the World Bank as high income in each
of the last three years, but with a currency that has been primarily
traded on a non-delivered basis by offshore investors (e.g., Korea
and Taiwan);
    (2) The country's debt market is considered relatively
accessible by foreign investors in terms of capital flow and
settlement considerations; and
    (3) The country has issued the equivalent of $5 billion in local
currency sovereign debt.
    The criteria used to evaluate whether a country is an ``emerging
market'' will change from time to time based on economic and other
events.
    \12\ The Fund may invest more than 25% of its total assets in
fixed income securities and instruments of issuers in a single
developed market country.
---------------------------------------------------------------------------

    Foreign debt securities include direct investments in non-U.S.
dollar-denominated debt securities traded primarily outside of the
United States and dollar-denominated debt securities of foreign
issuers. The Fund will invest in non-U.S. corporate bonds that the
Investment Adviser deems to be sufficiently liquid at the time of
investment.\13\ Foreign government obligations may include debt
obligations of supranational entities, including international
organizations (such as the European Coal and Steel Community and the
International Bank for Reconstruction and Development, also known as
the World Bank) and international banking institutions and related
government agencies. The Fund also may invest in foreign time deposits
and other short-term instruments. The Fund may invest a portion of its
assets in the obligations of foreign banks and foreign branches of
domestic banks.
---------------------------------------------------------------------------

    \13\ The Fund will invest only in non-U.S. corporate bonds that
the Investment Adviser deems to be sufficiently liquid at time of
investment. Generally, a corporate bond must have $200 million (or
an equivalent value if denominated in a currency other than U.S.
dollars) or more par amount outstanding and significant par value
traded to be considered as an eligible investment. Economic and
other conditions may, from time to time, lead to a decrease in the
average par amount outstanding of bond issuances. Therefore,
although the Fund does not intend to do so, the Fund may invest up
to 20% of its net assets in corporate bonds with less than $200
million par amount outstanding, including up to 5% of its assets in
corporate bonds with less than $100 million par amount outstanding,
if (i) the Investment Adviser deems such security to be sufficiently
liquid based on its analysis of the market for such security (based
on, for example, broker-dealer quotations or its analysis of the
trading history of the security or the trading history of other
securities issued by the issuer), (ii) such investment is consistent
with the Fund's goal of seeking maximum current income consistent
with the preservation of capital and liquidity, and (iii) such
investment is deemed by the Investment Adviser to be in the best
interest of the Fund.
---------------------------------------------------------------------------

    The Fund may invest, without limitation, in mortgage- or asset-
backed securities, other structured securities, including
collateralized mortgage obligations (``CMOs''), and also including to-
be-announced transactions (or ``TBA Transactions'').\14\ A TBA
Transaction is a method of trading mortgage-backed securities.\15\
However, the Fund will not invest more than 10% of its total assets in
non-agency \16\ mortgage- or asset-backed securities.
---------------------------------------------------------------------------

    \14\ In addition to credit and market risk, asset-backed
securities may involve prepayment risk because the underlying assets
(loans) may be prepaid at any time. Prepayment (or call) risk is the
risk that an issuer will exercise its right to pay principal on an
obligation held by the Fund (such as a mortgage-backed security)
earlier than expected. This may happen during a period of declining
interest rates. Under these circumstances, the Fund may be unable to
recoup all of its initial investment and will suffer from having to
reinvest in lower yielding securities. The loss of higher yielding
securities and the reinvestment at lower interest rates can reduce
the Fund's income, total return, and share price. The value of these
securities also may change because of actual or perceived changes in
the creditworthiness of the originator, the service agent, the
financial institution providing the credit support, or the
counterparty. Like other fixed-income securities, when interest
rates rise, the value of an asset-backed security generally will
decline. Credit supports generally apply only to a fraction of a
security's value. However, when interest rates decline, the value of
an asset-backed security with prepayment features may not increase
as much as that of other fixed-income securities. In addition, non-
mortgage asset-backed securities involve certain risks not presented
by mortgage-backed securities. Primarily, these securities do not
have the benefit of the same security interest in the underlying
collateral. If the issuer of the security has no security interest
in the related collateral, there is the risk that the Fund could
lose money if the issuer defaults.
    \15\ In a TBA Transaction, the buyer and seller agree upon
general trade parameters such as agency, settlement date, par
amount, and price. The actual pools delivered generally are
determined two days prior to the settlement date.
    \16\ ``Non-agency'' securities are financial instruments that
have been issued by an entity that is not a government-sponsored
agency, such as the Federal National Mortgage Association (``Fannie
Mae''), Federal Home Loan Mortgage Corporation (``Freddie Mac''),
Federal Home Loan Banks, or the Government National Mortgage
Association (``Ginnie Mae'').
---------------------------------------------------------------------------

    The Fund may invest in variable and floating rate instruments.
Variable and floating rate instruments have interest rates that
periodically are adjusted either at set intervals or that float at a
margin tied to a specified index rate. These instruments include
variable amount master demand notes, long-term variable and floating
rate bonds where the Fund obtains at the time of purchase the right to
put the bond back to the issuer or a third party at par at a specified
date, and leveraged inverse floating rate instruments (``inverse
floaters''). Some variable and floating rate instruments have interest
rates that periodically are adjusted as a result of changes in
inflation rates.
    Because there is no active secondary market for certain variable
and floating rate instruments, they may be more difficult to sell if
the issuer defaults on its payment obligations or during periods when
the Fund is not entitled to exercise its demand rights. In addition,
variable and floating rate instruments are subject to changes in value
based on changes in market interest rates or changes in the issuer's or
guarantor's creditworthiness.
    The Fund may borrow money and enter into reverse repurchase
agreements in amounts not exceeding one-fourth of the value of its
total assets (including the amount borrowed). To the extent consistent
with its investment objective and strategies, the Fund may enter into
repurchase agreements with financial institutions such as banks and
broker-dealers that are deemed to be creditworthy by the Investment
Adviser and may invest a portion of its assets in custodial receipts.

Other Investments

    The Fund may engage in forward foreign currency transactions for
hedging purposes in order to protect against uncertainty in the level
of future foreign currency exchange rates, to facilitate local
settlements, or to protect against currency exposure in connection

with its distributions to shareholders.\17\ The Fund, however, does not
expect to engage in currency transactions for speculative purposes
(e.g., for potential income or capital gain). A forward currency
exchange contract is an obligation to exchange one currency for another
on a future date at a specified exchange rate.
---------------------------------------------------------------------------

    \17\ Liquid assets equal to the amount of the Fund's assets that
could be required to consummate forward contracts will be segregated
except to the extent the contracts are otherwise ``covered.'' The
segregated assets will be valued at market or fair value. If the
market or fair value of such assets declines, additional liquid
assets will be segregated daily so that the value of the segregated
assets will equal the amount of such commitments by the Fund. A
forward contract to sell a foreign currency is ``covered'' if the
Fund owns the currency (or securities denominated in the currency)
underlying the contract, or holds a forward contract (or call
option) permitting the Fund to buy the same currency at a price that
is (i) no higher than the Fund's price to sell the currency or (ii)
greater than the Fund's price to sell the currency provided the Fund
segregates liquid assets in the amount of the difference. A forward
contract to buy a foreign currency is ``covered'' if the Fund holds
a forward contract (or call option) permitting the Fund to sell the
same currency at a price that is (i) as high as or higher than the
Fund's price to buy the currency or (ii) lower than the Fund's price
to buy the currency provided the Fund segregates liquid assets in
the amount of the difference.
---------------------------------------------------------------------------

    To the extent consistent with its investment policies, the Fund may
hold up to 15% of its net assets in securities that are illiquid
(calculated at the time of investment), including Rule 144A Securities
and master demand notes. The aggregate value of all of the Fund's
illiquid securities, Rule 144A Securities, master demand notes, fixed
and variable rate loan participations and assignments, inverse
floaters, and long-term variable and floating rate bonds where the Fund
obtains at the time of purchase the right to put the bond back to the
issuer or a third party at par at a specified date shall not exceed 15%
of the Fund's total assets. The Fund will monitor its portfolio
liquidity on an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid securities.
    The Fund may purchase and sell securities on a when-issued, delayed
delivery, or forward commitment basis. The Fund also may, without
limitation, seek to obtain market exposure to the securities in which
it primarily invests by entering into a series of purchase and sale
contracts (such as buy backs or mortgage dollar rolls).
    The Fund may temporarily hold cash and cash-like instruments or
invest in short-term obligations pending investment or to meet
anticipated redemption requests. The Fund also may hold up to 100% of
its total assets in cash or cash-like instruments or invest in short-
term obligations as a temporary measure mainly designed to limit the
Fund's losses in response to adverse market, economic, or other
conditions. The Fund may not achieve its investment objective when it
holds cash or cash-like instruments, or invests its assets in short-
term obligations or otherwise makes temporary investments. The Fund
also may miss investment opportunities and have a lower total return
during these periods.
    The Fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other instruments.
    The Fund may not concentrate its investments (i.e., invest 25% or
more of its total assets in the securities of a particular industry or
industry group). For purposes of this limitation, securities of the
U.S. government (including its agencies and instrumentalities),
repurchase agreements collateralized by U.S. government securities, and
securities of state or municipal governments and their political
subdivisions are not considered to be issued by members of any
industry.
    The Fund may invest in the securities of other investment
companies. Such investments will be limited so that, as determined
after a purchase is made, either: (a) not more than 3% of the total
outstanding stock of such investment company will be owned by the Fund,
the Trust as a whole, and its affiliated persons (as defined in the
1940 Act); or (b)(i) not more than 5% of the value of the total assets
of the Fund will be invested in the securities of any one investment
company, (ii) not more than 10% of the value of its total assets will
be invested in the aggregate securities of investment companies as a
group, and (iii) not more than 3% of the outstanding voting stock of
any one investment company will be owned by the Fund. These limits will
not apply to the investment of uninvested cash balances in shares of
registered or unregistered money market funds whether affiliated or
unaffiliated. The foregoing exemption, however, only applies to an
unregistered money market fund that (i) limits its investments to those
in which a money market fund may invest under Rule 2a-7 of the 1940
Act, and (ii) undertakes to comply with all the other provisions of
Rule 2a-7.
    Investments by the Fund in other investment companies, including
exchange-traded funds (``ETFs''),\18\ will be subject to the
limitations of the 1940 Act except as expressly permitted by Commission
orders. The Fund also may invest in other types of U.S. exchange-traded
products, such as Exchange-Traded Notes.\19\
---------------------------------------------------------------------------

    \18\ For purposes of this proposed rule change, ETFs are
securities registered under the 1940 Act such as those listed and
traded on the Exchange under NYSE Arca Equities Rules 5.2(j)(3),
8.100, and 8.600.
    \19\ For purposes of this proposed rule change, Exchange Traded
Notes are securities registered under the 1933 Act such as those
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(6).
---------------------------------------------------------------------------

    The Fund intends to qualify as a regulated investment company under
Subchapter M of Subtitle A, Chapter 1, of the Internal Revenue Code.
    The Fund will not invest in any non-U.S registered equity
securities. The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage. That is,
while the Fund will be permitted to borrow as permitted under the 1940
Act, the Fund's investments will not be used to seek performance that
is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the Fund's
benchmark (i.e., the Citigroup 3-Month Treasury Bill Index).
    Consistent with the Exemptive Order, the Fund will not invest in
options contracts, futures contracts, or swap agreements.
    The Exchange represents that the Shares will conform to the initial
and continued listing criteria under NYSE Arca Equities Rule 8.600.
Consistent with NYSE Arca Equities Rule 8.600(d)(2)(B)(ii), the
Investment Adviser will implement and maintain, or be subject to,
procedures designed to prevent the use and dissemination of material,
non-public information regarding the actual components of the Fund's
portfolio. The Exchange represents that, for initial and/or continued
listing, the Fund will be in compliance with Rule 10A-3 under the
Exchange Act,\20\ as provided by NYSE Arca Equities Rule 5.3. A minimum
of 100,000 Shares will be outstanding at the commencement of trading on
the Exchange. The Exchange will obtain a representation from the issuer
of the Shares that the net asset value (``NAV'') per Share will be
calculated daily and that the NAV and the Disclosed Portfolio, as
defined in NYSE Arca Equities Rule 8.600(c)(2), will be made available
to all market participants at the same time.
---------------------------------------------------------------------------

    \20\ 17 CFR 240.10A-3.

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

    Additional information regarding the Trust, Fund, Shares, Fund's
investment strategies, risks, creation and redemption procedures, fees,
portfolio holdings and disclosure policies, distributions and taxes,
availability of information, trading rules and halts, and surveillance
procedures, among other things, can be found in the Notice and/or the
Registration Statement, as applicable.\21\
---------------------------------------------------------------------------

    \21\ See Notice and Registration Statement, supra notes 3 and 4,
respectively.
---------------------------------------------------------------------------

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act \22\
and the rules and regulations thereunder applicable to a national
securities exchange.\23\ In particular, the Commission finds that the
proposed rule change is consistent with the requirements of Section
6(b)(5) of the Act,\24\ which requires, among other things, that the
Exchange's rules be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
The Commission notes that the Fund and the Shares must comply with the
requirements of NYSE Arca Equities Rule 8.600 to be listed and traded
on the Exchange.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f.
    \23\ 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).
    \24\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\25\ 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 (``CTA'') high-speed line. In addition, the Portfolio
Indicative Value, as defined in NYSE Arca Equities Rule 8.600(c)(3),
will be widely disseminated by one or more major market data vendors at
least every 15 seconds during the Core Trading Session.\26\ On each
business day, before commencement of trading in Shares in the Core
Trading Session 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.\27\ The NAV of the Fund will normally
be determined as of the close of the regular trading session
(ordinarily 4:00 p.m., Eastern Time) on the New York Stock Exchange
(``NYSE'') on each business day. Further, a basket composition file,
which includes the security names and share quantities, if applicable,
required to be delivered in exchange for Fund Shares, together with
estimates and actual cash components, will be publicly disseminated
daily prior to the opening of the NYSE via the National Securities
Clearing Corporation. 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. 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. In addition, price information for
the debt securities, fixed income instruments, and other investments,
including forwards and securities of other investment companies, held
by the Fund will be available through major market data vendors and/or
the securities exchange on which they are listed and traded. The
Trust's Web site will include a form of the prospectus for the Fund and
additional data relating to NAV and other applicable quantitative
information.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \26\ According to the Exchange, several major market data
vendors display and/or make widely available Portfolio Indicative
Values published on CTA or other data feeds.
    \27\ On a daily basis, the Fund will disclose for each portfolio
security and other financial instrument of the Fund the following
information on the Trust's Web site: ticker symbol (if applicable),
name of securities and financial instruments, number of shares or
dollar value of securities and financial instruments held in the
portfolio, and percentage weighting of the securities and financial
instruments in the portfolio. The Web site information will be
publicly available at no charge.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.\28\
In addition, trading in the Shares will be subject to NYSE Arca
Equities Rule 8.600(d)(2)(D), which sets forth circumstances under
which Shares of the Fund may be halted. The Exchange may halt trading
in the Shares if trading is not occurring in the securities and/or the
financial instruments comprising the Disclosed Portfolio of the Fund,
or if other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present.\29\ Further, the
Commission notes that the Reporting Authority that provides the
Disclosed Portfolio must implement and maintain, or be subject to,
procedures designed to prevent the use and dissemination of material,
non-public information regarding the actual components of the
portfolio.\30\ The Exchange states that it has a general policy
prohibiting the distribution of material, non-public information by its
employees. The Exchange also states that the Investment Adviser is
affiliated with a broker-dealer and has implemented a ``fire wall''
with respect to such broker-dealer regarding access to information
concerning the composition and/or changes to the Fund's portfolio.\31\
Moreover, the

Exchange represents that it is able to obtain information via the
Intermarket Surveillance Group (``ISG'') from other exchanges that are
members of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
---------------------------------------------------------------------------

    \28\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \29\ See NYSE Arca Equities Rule 8.600(d)(2)(C) (providing
additional considerations for the suspension of trading in or
removal from listing of Managed Fund Shares on the Exchange). With
respect to trading halts, the Exchange may consider all relevant
factors in exercising its discretion to halt or suspend trading in
the Shares of the Fund. Trading in Shares of the Fund will be halted
if the circuit breaker parameters in NYSE Arca Equities Rule 7.12
have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.
    \30\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii). The
Exchange represents that, consistent with NYSE Arca Equities Rule
8.600(d)(2)(B)(ii), the Investment Adviser will implement and
maintain, or be subject to, procedures designed to prevent the use
and dissemination of material, non-public information regarding the
actual components of the Fund's portfolio.
    \31\ See supra note 5 and accompanying text. The Commission
notes that an investment adviser to an open-end fund is required to
be registered under the Investment Advisers Act of 1940 (``Advisers
Act''). As a result, the Investment Adviser and its related
personnel are subject to the provisions of Rule 204A-1 under the
Advisers Act relating to codes of ethics. This Rule requires
investment advisers to adopt a code of ethics that reflects the
fiduciary nature of the relationship to clients as well as
compliance with other applicable securities laws. Accordingly,
procedures designed to prevent the communication and misuse of non-
public information by an investment adviser must be consistent with
Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under
the Advisers Act makes it unlawful for an investment adviser to
provide investment advice to clients unless such investment adviser
has (i) adopted and implemented written policies and procedures
reasonably designed to prevent violation, by the investment adviser
and its supervised persons, of the Advisers Act and the Commission
rules adopted thereunder; (ii) implemented, at a minimum, an annual
review regarding the adequacy of the policies and procedures
established pursuant to subparagraph (i) above and the effectiveness
of their implementation; and (iii) designated an individual (who is
a supervised person) responsible for administering the policies and
procedures adopted under subparagraph (i) above.
---------------------------------------------------------------------------

    The Exchange represents that the Shares are deemed to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has made representations,
including:
    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) The Exchange's surveillance procedures applicable to derivative
products, which include Managed Fund Shares, are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and applicable federal
securities laws.
    (4) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit Holders (``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 procedures for purchases and redemptions of
Shares in Creation Unit aggregations (and that Shares are not
individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which
imposes a duty of due diligence on its ETP Holders to learn the
essential facts relating to every customer prior to trading the Shares;
(c) the risks involved in trading the Shares during the Opening and
Late Trading Sessions when an updated Portfolio Indicative Value will
not be calculated or publicly disseminated; (d) how information
regarding the Portfolio Indicative Value is disseminated; (e) 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 (f) trading information.
    (5) For initial and/or continued listing, the Fund will be in
compliance with Rule 10A-3 under the Exchange Act,\32\ as provided by
NYSE Arca Equities Rule 5.3.
---------------------------------------------------------------------------

    \32\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) The Fund will invest in debt securities that are, at the time
of investment, rated within the top four rating categories by an NRSRO.
    (7) The Fund will invest only in non-U.S. corporate bonds that the
Investment Adviser deems to be sufficiently liquid at time of
investment. Generally, a corporate bond must have $200 million (or an
equivalent value if denominated in a currency other than U.S. dollars)
or more par amount outstanding and significant par value traded to be
considered as an eligible investment.
    (8) The Fund will not invest: (a) More than 20% of its total assets
in fixed income instruments of foreign issuers in emerging markets; (b)
more than 10% of its total assets in non-agency mortgage- or asset-
backed securities; (c) consistent with the Exemptive Order, in options
contracts, futures contracts, or swap agreements; and (d) in any non-
U.S. registered equity securities.
    (9) The aggregate value of all of the Fund's illiquid securities,
Rule 144A Securities, master demand notes, fixed and variable rate loan
participations and assignments, inverse floaters, and long-term
variable and floating rate bonds where the Fund obtains at the time of
purchase the right to put the bond back to the issuer or a third party
at par at a specified date shall not exceed 15% of the Fund's total
assets.
    (10) The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage.
    (11) A minimum of 100,000 Shares of the Fund will be outstanding at
the commencement of trading on the Exchange.

This approval order is based on all of the Exchange's representations,
including those set forth above and in the Notice, and the Exchange's
description of the Fund.

    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \33\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\34\ that the proposed rule change (SR-NYSEArca-2012-82) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78s(b)(2).
    \35\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24738 Filed 10-5-12; 8:45 am]
BILLING CODE 8011-01-P