[Federal Register: March 17, 2008 (Volume 73, Number 52)]
[Notices]
[Page 14240-14241]
[DOCID:fr17mr08-45]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP08-36-000]

Chestnut Ridge Storage L.P.; Notice of Public Scoping Meeting and
Site Visit for the Proposed Junction Natural Gas Storage Project

March 10, 2008.
    The staff of the Federal Energy Regulatory Commission (Commission)
will conduct a public scoping meeting and site visit for the Junction
Natural Gas Storage Project involving construction and operation of
natural gas storage and pipeline header facilities by Chestnut Ridge
Storage L.P. in Fayette County, Pennsylvania and Preston and Monongalia
Counties, West Virginia. Further description of the project was
provided in our Notice of Intent to Prepare an Environmental Assessment
for the Junction Natural Gas Storage Project, issued on January 28,
2008.
    Additional information about the project, including maps, is
available from the Commission's Office of External Affairs, at 1-866-
208-FERC or on the FERC Internet Web site (http://www.ferc.gov) using
the ``eLibrary'' link. Click on the eLibrary link, then on ``General
Search'' and enter the docket number--CP08-36. Be sure you have
selected an appropriate date range. For assistance, please contact FERC
Online Support at<EMAIL_ADDRESS>or toll free at 1-866-208-
3676, or for TTY, contact<PHONE_NUMBER>.

    We invite you to attend a public scoping meeting on Thursday
evening, March 27, 2008, to provide environmental comments on the
proposed project. Your input will help us determine the issues that
need to be evaluated in the environmental assessment. The public
scoping meeting will be held at: Volunteer Fire Department Social Hall,
31 Pittsburgh Street, Fairchance, PA 15436, Phone:<PHONE_NUMBER>, Time:
7 p.m.-9 p.m.
    The Commission staff also will conduct a site visit of the location
of the proposed facilities on Friday, March 28, 2008. Anyone interested
in participating in the site visit may attend, and they must provide
their own transportation. The staff will start the site visit on March
28 at approximately 9 a.m. The Commission staff, company
representatives, and interested participants will meet in the parking
lot at the following location: Saints Cyril & Methodius Church, 50 N
Morgantown Street, Fairchance, PA 15436, time: 9 a.m. (EST).

Kimberly D. Bose,
Secretary.
 [FR Doc. E8-5232 Filed 3-14-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: June 22, 2006 (Volume 71, Number 120)]
[Notices]
[Page 35891]
[DOCID:fr22jn06-70]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2195-011]

Clackamas River Hydroelectric Project; Portland General Electric
Company, Clackamas County, OR; Notice of Availability of the Draft
Environmental Impact Statement for the Clackamas River Hydroeletric
Project and Intention To Hold a Public Meeting

June 16, 2006.
    In accordance with the National Environmental Policy Act of 1969
and the Federal Energy Regulatory Commission (Commission or FERC)
regulations contained in the Code of Federal Regulations (CFR) (18 CFR
part 380 [FERC Order No. 486, 52 FR 47897]) the Office of Energy
Projects staff (staff) reviewed the application for a New Major License
for the Clackamas River Hydroelectric Project. Staff prepared a draft
environmental impact statement (DEIS) for the project which is located
on the Clackamas River, Clackamas County, Oregon.
    The DEIS contains staff's analysis of the potential environmental
effects of the project and concludes that licensing the project, with
staff's recommended measures, would not constitute a major federal
action significantly affecting the quality of the human environment.
Copies of the DEIS have been sent to Federal, state, and local
agencies; public interest groups; and individuals on the Commission's
mailing list.
    A copy of the DEIS is available for review at the Commission's
Public Reference Room or may be viewed on the Commission's Web site at
http://www.ferc.gov using the ``e-Library'' link. Enter the docket

number (P-2195), to access the document. For assistance, contact FERC
Online Support at<EMAIL_ADDRESS>or toll-free at (866) 208-
2376, or for TTY, contact<PHONE_NUMBER>.
    Comments should be filed with Magalie R. Salas, Secretary, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426. All comments must be filed by August 7, 2006, and should
reference Project No. 2195-011. Comments may be filed electronically
via the Internet in lieu of paper. The Commission strongly encourages
electronic filings. See 18 CFR 385.2001(a)(1)(iii) and instructions on
the Commission's Web site at http://www.ferc.gov under the eLibrary

link.
    In addition to or in lieu of sending written comments, you are
invited to attend a public meeting that will be held to receive
comments on the draft EIS. The time and location of the meeting is as
follows:
    Date: July 28, 2006.
    Time: 9:30 a.m.-4:30 p.m.
    Place: 2-World Trade Center--Plaza Room-Ground Floor.
    Address: 121 S.W. Salmon Street, Portland, Oregon.
    At this meeting, resource agency personnel and other interested
persons will have the opportunity to provide oral and written comments
and recommendations regarding the draft EIS. The meeting will be
recorded by a court reporter, and all statements (verbal and written)
will become part of the Commission's public record for the project.
    For further information, please contact: John Blair at (202) 502-
6092 or at<EMAIL_ADDRESS>
Magalie R. Salas,
Secretary.
 [FR Doc. E6-9806 Filed 6-21-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 63 (Tuesday, April 2, 2013)]
[Notices]
[Pages 19766-19772]
[FR Doc No: 2013-07585]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69244; File No. SR-NYSEArca-2013-08]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change Relating to the Listing and Trading of
the SPDR Blackstone/GSO Senior Loan ETF Under NYSE Arca Equities Rule
8.600

March 27, 2013.

I. Introduction

    On January 24, 2013, 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 the SPDR Blackstone/GSO Senior Loan ETF (``Fund''). The
proposed rule change was published for comment in the Federal Register
on February 13, 2013.\3\ The Commission received no comments on the
proposed rule change. This order grants approval of the proposed rule
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 68862 (February 7,
2013), 78 FR 10233 (``Notice'').
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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. The Shares will be offered by SSgA Active ETF
Trust (``Trust''), which is organized as a Massachusetts business trust
and is registered with the Commission as an open-end management
investment company.\4\ SSgA Funds Management, Inc. (``Adviser'') serves
as the investment adviser to the Fund. GSO/Blackstone Debt Funds
Management LLC will serve as sub-adviser (``Sub-Adviser'') \5\ to the
Blackstone/GSO Senior Loan Portfolio (``Portfolio'') and the Fund,
subject to supervision by the Adviser and the Trust's Board of Trustees
(``Board''). State Street Global Markets, LLC will be the principal
underwriter and distributor of the Fund's Shares, and State Street Bank
and Trust Company (``Custodian'') will serve as administrator,
custodian, and transfer agent for the Fund.
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    \4\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). On April 1, 2011, the Trust filed with the
Commission Form N-1A under the Securities Act of 1933 and under the
1940 Act relating to the Fund (File Nos. 333-173276 and 811-22542)
(``Registration Statement''). In addition, the Exchange represents
that the Trust has obtained certain exemptive relief under the 1940
Act. See Investment Company Act Release No. 29524 (December 13,
2010) (File No. 812-13487) (``Exemptive Order'').
    \5\ The Exchange represents that, in the event (a) the Adviser
or Sub-Adviser becomes newly affiliated with a broker-dealer, or (b)
any new 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.
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SPDR Blackstone/GSO Senior Loan ETF

    The investment objective of the Fund is to provide current income
consistent with the preservation of capital. Under normal market
conditions,\6\ the Fund will invest all of its assets in the shares of
the Portfolio, a separate series of the SSgA Master Trust with an
identical investment objective as the Fund. As a result, the Fund will
invest indirectly through the Portfolio.
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    \6\ The terms ``under normal market conditions'' or ``under
normal market circumstances'' include, but are not limited to, the
absence of extreme volatility or trading halts in the fixed income
markets or the financial markets generally; of operational issues
causing dissemination of inaccurate market information; or of 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. In
periods of extreme market disturbance, the Fund may take temporary
defensive positions by overweighting its portfolio in cash/cash-like
instruments; however, to the extent possible, the Sub-Adviser would
continue to seek to achieve the Fund's investment objective.
Specifically, the Portfolio and Fund would continue to invest in
Senior Loans. In response to prolonged periods of constrained or
difficult market conditions, the Sub-Adviser will likely focus on
investing in the largest and most liquid loans available in the
market.
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    According to the Exchange, in pursuing its investment objective,
the Fund, under normal market conditions, will seek to outperform a
primary and secondary loan index (as described below) by investing at
least 80% of its net assets (plus any borrowings for investment
purposes) in ``Senior Loans.'' \7\ The S&P/LSTA U.S. Leveraged Loan 100
Index (``Primary Index'') comprises the 100 largest Senior Loans, as
measured by the borrowed amounts outstanding.\8\ The Markit iBoxx USD
Leveraged Loan Index (``Secondary Index'') selects the 100 most liquid
Senior Loans in the market.\9\ In addition to size, liquidity is also
measured, in part, based on the number of market makers who trade a
specific Senior Loan and the number and size of transactions in the
context of the prevailing bid/offer spread.
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    \7\ A detailed discussion of Senior Loans and the Senior Loan
market can be found in the Notice, supra note 3, 78 FR at 10238-39.
    \8\ The ``Primary Index Committee,'' composed of employees of
Standard & Poor's, Inc. (``S&P''), maintains the Primary Index. See
id. at 10240.
    \9\ The oversight committee of the Markit iBoxx USD Leveraged
Loans Indices (``Oversight Committee'') conducts an annual review of
the loan market and the index rules relating to the Secondary Index.
See id. at 10241. A detailed discussion of the Primary Index and
Secondary Index can be found in the Notice, supra note 3, 78 FR at
10239-42.
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    The Fund will not seek to track either the Primary or Secondary
Index, but rather will seek to outperform those indices. In doing so,
the Sub-Adviser represents that the Portfolio will primarily invest in
Senior Loans.\10\ The Portfolio intends to hold a large percentage of
the components of the Primary and Secondary Indices. It is

anticipated that the Portfolio, in accordance with its principal
investment strategy, will invest approximately 50% to 75% of its net
assets in Senior Loans that are eligible for inclusion and meet the
liquidity thresholds of the Primary and/or the Secondary Indices. Each
of the Portfolio's Senior Loan investments is expected to have no less
than $250 million USD par outstanding.
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    \10\ The Sub-Adviser represents that, in general, the Portfolio
(i.e., the master fund) is where investments will be held, which
investments will primarily consist of Senior Loans and may, to a
lesser extent, include ``other investments'' as described below. The
Fund (i.e., the feeder fund) will invest in shares of the Portfolio
and will not invest in other investments, but may be exposed to such
investments by means of the Fund's investment in shares of the
Portfolio. In extraordinary instances, the Fund reserves the right
to make direct investments in Senior Loans and other investments.
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    The Sub-Adviser considers Senior Loans to be first lien senior
secured floating rate bank loans. A Senior Loan is an advance or
commitment of funds made by one or more banks or similar financial
institutions to one or more corporations, partnerships, or other
business entities and typically pays interest at a floating or
adjusting rate that is determined periodically at a designated premium
above a base lending rate, most commonly the London-Interbank Offered
Rate. A Senior Loan is considered senior to all other unsecured claims
against the borrower and senior to or pari passu with all other secured
claims, meaning that in the event of a bankruptcy, the Senior Loan,
together with other first lien claims, is entitled to be the first to
be repaid out of proceeds of the assets securing the loans before other
existing unsecured claims or interests receive repayment. However, in
bankruptcy proceedings, there may be other claims, such as taxes or
additional advances which take precedence.\11\
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    \11\ Senior Loans consist generally of obligations of companies
and other entities (collectively, ``borrowers'') incurred for the
purpose of reorganizing the assets and liabilities of a borrower;
acquiring another company; taking over control of a company
(leveraged buyout); temporary refinancing; or financing internal
growth or other general business purposes. Senior Loans are often
obligations of borrowers who have incurred a significant percentage
of debt compared to equity issued and thus are highly leveraged.
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    According to the Exchange, the Portfolio will invest in Senior
Loans that are made predominantly to businesses operating in North
America, but may also invest in Senior Loans made to businesses
operating outside of North America. The Portfolio may invest in Senior
Loans directly, either from the borrower as part of a primary issuance
or in the secondary market through assignments of portions of Senior
Loans from third parties or participations in Senior Loans, which are
contractual relationships with an existing lender in a loan facility
whereby the Portfolio purchases the right to receive principal and
interest payments on a loan, but the existing lender remains the record
holder of the loan. Under normal market conditions, the Portfolio
expects to maintain an average interest rate duration of less than 90
days.
    In selecting securities for the Portfolio, the Sub-Adviser will
seek to construct a portfolio of loans that it believes is less
volatile than the general loan market. In addition, when making
investments, the Sub-Adviser will seek to maintain appropriate
liquidity and price transparency for the Portfolio. On an on-going
basis, the Sub-Adviser will add or remove those individual loans that
it believes will cause the Portfolio to outperform or underperform,
respectively, either the Primary or Secondary Index.
    When identifying prospective investment opportunities in Senior
Loans, the Sub-Adviser currently intends to invest primarily in Senior
Loans that are below investment grade quality and will rely on
fundamental credit analysis in an effort to attempt to minimize the
loss of the Portfolio's capital.\12\ The Sub-Adviser expects to invest
in Senior Loans or other debt of companies possessing the attributes
described below, which it believes will help generate higher risk
adjusted total returns. The Sub-Adviser does not intend to purchase
Senior Loans that are in default; however, the Portfolio may hold a
Senior Loan that has defaulted subsequent to its purchase by the
Portfolio.
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    \12\ The Portfolio will primarily invest in securities
(including Senior Loans) which typically will be rated below
investment grade. Securities rated below investment grade, commonly
referred to as ``junk'' or ``high yield'' securities, include
securities that are rated Ba1/BB+/BB+ or below by Moody's Investors
Service, Inc. (``Moody's''), Fitch Inc., or S&P, respectively, and
may involve greater risks than securities in higher rating
categories.
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    The Sub-Adviser intends to invest in Senior Loans or other debt of
companies that it believes have developed strong positions within their
respective markets and exhibit the potential to maintain sufficient
cash flows and profitability to service their obligations in a range of
economic environments. The Sub-Adviser will seek Senior Loans or other
debt of companies that it believes possess advantages in scale, scope,
customer loyalty, product pricing, or product quality versus their
competitors, thereby minimizing business risk and protecting
profitability.
    The Sub-Adviser intends to invest primarily in Senior Loans or
other debt of established companies which have demonstrated a record of
profitability and cash flows over several economic cycles. The Sub-
Adviser believes such companies are well-positioned to maintain
consistent cash flow to service and repay their obligations and
maintain growth in their businesses or market share. The Sub-Adviser
does not intend to invest in Senior Loans or other debt of primarily
start-up companies, companies in turnaround situations, or companies
with speculative business plans.
    The Sub-Adviser intends to focus on investments in which the Senior
Loans or other debt of a target company has an experienced management
team with an established track record of success. The Sub-Adviser will
typically require companies to have in place proper incentives to align
management's goals with the Portfolio's goals.
    The Sub-Adviser will seek to invest in Senior Loans or other debt
broadly among companies and industries, thereby potentially reducing
the risk of a downturn in any one company or industry having a
disproportionate impact on the value of the Portfolio's holdings.
However, as a result of its investment in participations in loans and
the fact that originating banks may be deemed issuers of loans, the
Portfolio may be deemed to concentrate its investments in the financial
services industries. Loans, and the collateral securing them, are
typically monitored by agents for the lenders, which may be the
originating bank or banks.\13\
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    \13\ According to the Exchange, the Portfolio may be reliant on
the creditworthiness of the agent bank and other intermediate
participants in a Senior Loan, in addition to the borrower, since
rights that may exist under the loan against the borrower if the
borrower defaults are typically asserted by or through the agent
bank or intermediate participant. Agents are typically large
commercial banks, although for Senior Loans that are not broadly
syndicated, they can also include thrift institutions, insurance
companies, or finance companies (or their affiliates). Such
companies may be especially susceptible to the effects of changes in
interest rates resulting from changes in U.S. or foreign fiscal or
monetary policies, governmental regulations affecting capital
raising activities, or other economic or market fluctuations. It is
the expectation that the Portfolio will only invest in broadly
syndicated loans.
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    The Portfolio and the Fund are expected to be managed in a
``master-feeder'' structure, under which the Fund, under normal market
conditions, will invest all of its assets in the Portfolio, the
corresponding ``master fund,'' which is a separate 1940 Act-registered
mutual fund that has an identical investment objective. As a result,
the Fund (i.e., a ``feeder fund'') has an indirect interest in all of
the securities owned by the Portfolio. Because of this indirect
interest, the Fund's investment returns should be the same as those of
the Portfolio, adjusted for the expenses of the Fund. In extraordinary
instances, the Fund reserves the right to make direct investments.

    The Sub-Adviser will manage the investments of the Portfolio. Under
the master-feeder arrangement, investment advisory fees charged at the
master fund level are deducted from the advisory fees charged at the
feeder fund level. According to the Exchange, this arrangement avoids a
``layering'' of fees, e.g., the Fund's total annual operating expenses
would be no higher as a result of investing in a master-feeder
arrangement than they would be if the Fund pursued its investment
objectives directly. In addition, the Fund may discontinue investing
through the master-feeder arrangement and pursue its investment
objectives directly if the Trust's Board determines that doing so would
be in the best interests of shareholders.
    According to the Exchange, historically, the amount of public
information available about a specific Senior Loan has been less
extensive than if the loan were registered or exchange-traded. As noted
above, the loans in which the Portfolio will invest will, in most
instances, be Senior Loans, which are secured and senior to other
indebtedness of the borrower. Each Senior Loan will generally be
secured by collateral such as accounts receivable; inventory;
equipment; real estate; intangible assets such as trademarks,
copyrights, and patents; and securities of subsidiaries or affiliates.
The value of the collateral generally will be determined by reference
to financial statements of the borrower, by an independent appraisal,
by obtaining the market value of such collateral (in the case of cash
or securities if readily ascertainable), or by other customary
valuation techniques considered appropriate by the Sub-Adviser. The
value of collateral may decline after the Portfolio's investment, and
collateral may be difficult to sell in the event of default.
Consequently, the Portfolio may not receive all the payments to which
it is entitled. By virtue of their senior position and collateral,
Senior Loans typically provide lenders with the first right to cash
flows or proceeds from the sale of a borrower's collateral if the
borrower becomes insolvent (subject to the limitations of bankruptcy
law, which may provide higher priority to certain claims such as
employee salaries, employee pensions, and taxes). This means Senior
Loans are generally repaid before unsecured bank loans, corporate
bonds, subordinated debt, trade creditors, and preferred or common
stockholders. To the extent that the Portfolio invests in unsecured
loans, if the borrower defaults on such loans, there is no specific
collateral on which the lender can foreclose. If the borrower defaults
on a subordinated loan, the collateral may not be sufficient to cover
both the senior and subordinated loans.
    There is no organized exchange on which loans are traded, and
reliable market quotations may not be readily available. A majority of
the Portfolio's assets are likely to be invested in loans that are less
liquid than securities traded on national exchanges. Loans with reduced
liquidity involve greater risk than securities with more liquid
markets. Available market quotations for such loans may vary over time,
and if the credit quality of a loan unexpectedly declines, secondary
trading of that loan may decline for a period of time. During periods
of infrequent trading, valuing a loan can be more difficult, and buying
and selling a loan at an acceptable price can be more difficult and
delayed. In the event that the Portfolio voluntarily or involuntarily
liquidates Portfolio assets during periods of infrequent trading, it
may not receive full value for those assets. Therefore, elements of
judgment may play a greater role in the valuation of loans. To the
extent that a secondary market exists for certain loans, the market may
be subject to irregular trading activity, wide bid/ask spreads, and
extended trade settlement periods.
    Senior Loans will usually require, in addition to scheduled
payments of interest and principal, the prepayment of the Senior Loan
from free cash flow. The degree to which borrowers prepay Senior Loans,
whether as a contractual requirement or at their election, may be
affected by general business conditions, the financial condition of the
borrower, and competitive conditions among loan investors, among other
factors. As such, prepayments cannot be predicted with accuracy. Recent
market conditions, including falling default rates among others, have
led to increased prepayment frequency and loan renegotiations. These
renegotiations are often on terms more favorable to borrowers. Upon a
prepayment, either in part or in full, the actual outstanding debt on
which the Portfolio derives interest income will be reduced. However,
the Portfolio may receive a prepayment penalty fee assessed against the
prepaying borrower.

Other Investments

    The Fund may (indirectly through its investments in the Portfolio
or, in extraordinary circumstances, directly) invest in certain other
types of investments. According to the Exchange, in addition to the
principal investments described above, the Portfolio may invest in
bonds, including corporate bonds, high-yield debt securities, and U.S.
Government obligations.\14\ The Portfolio also may invest in preferred
securities.
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    \14\ U.S. Government obligations are a type of bond and include
securities issued or guaranteed as to principal and interest by the
U.S. Government or its agencies or instrumentalities. The Portfolio
also may purchase U.S.-registered, dollar-denominated bonds of
foreign corporations, governments, agencies, and supra-national
entities.
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    The Portfolio may invest in repurchase agreements with commercial
banks, brokers, or dealers to generate income from its excess cash
balances and its securities lending cash collateral.\15\ In addition,
the Portfolio may enter into reverse repurchase agreements, which
involve the sale of securities with an agreement to repurchase the
securities at an agreed-upon price, date, and interest payment and have
the characteristics of borrowing. The Portfolio also may invest in
commercial paper.\16\
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    \15\ A repurchase agreement is an agreement under which the
Portfolio acquires a financial instrument (e.g., a security issued
by the U.S. government or an agency thereof, a banker's acceptance
or a certificate of deposit) from a seller, subject to resale to the
seller at an agreed-upon price and date (normally, the next business
day). A repurchase agreement may be considered a loan collateralized
by securities.
    \16\ Commercial paper consists of short-term promissory notes
issued by banks, corporations, and other entities to finance short-
term credit needs. These securities generally are discounted, but
sometimes may be interest bearing.
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    Subject to limitations, the Portfolio may invest in secured loans
that are not first lien loans or loans that are unsecured. These loans
have the same characteristics as Senior Loans except that such loans
are not first in priority of repayment and/or may not be secured by
collateral. Accordingly, the risks associated with these loans are
higher than the risks for loans with first priority over the
collateral. Because these loans are lower in priority and/or unsecured,
they are subject to the additional risk that the cash flow of the
borrower may be insufficient to meet scheduled payments after giving
effect to the secured obligations of the borrower or in the case of a
default, recoveries may be lower for unsecured loans than for secured
loans.\17\
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    \17\ According to the Exchange, secured loans that are not first
lien and loans that are unsecured generally have greater price
volatility than Senior Loans and may be less liquid. There is also a
possibility that originators will not be able to sell participations
in these loans, which would create greater credit risk exposure for
the holders of such loans. Secured loans that are not first lien and
loans that are unsecured share the same risks as other below
investment grade instruments.
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    The Portfolio may invest in short-term instruments, including money
market instruments (including money market funds advised by the
Adviser), cash, and

cash equivalents, on an ongoing basis to provide liquidity or for other
reasons.
    The Portfolio may invest in the securities of other investment
companies, including closed-end funds (including loan-focused closed
end funds), subject to applicable limitations under Section 12(d)(1) of
the 1940 Act.\18\ To the extent allowed by law, the Portfolio's
investment restrictions, and the Trust's Exemptive Order, the Portfolio
may invest its assets in securities of investment companies that are
money market funds, including those advised by the Adviser or otherwise
affiliated with the Adviser, in excess of the limits discussed above.
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    \18\ The Portfolio may invest in other debt or fixed income
exchange-traded funds (``ETFs''), such as securities listed on the
Exchange under NYSE Arca Equities Rules 5.2(j)(3), 8.100, and 8.600
(including other ETFs managed by the Adviser). ETFs may be
structured as investment companies that are registered under the
1940 Act, typically as open-end funds or unit investment trusts.
These ETFs are generally based on specific domestic and foreign
market securities indices.
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    In addition, the Portfolio may invest in exchange-traded notes,
such as securities listed on the Exchange under NYSE Arca Equities Rule
5.2(j)(6), which are debt obligations of investment banks that are
traded on exchanges and the returns of which are linked to the
performance of certain reference assets, which may include market
indexes.
    The Portfolio will not invest 25% or more of the value of its total
assets in securities of issuers in any one industry; however it may be
deemed to concentrate its investment in any of the industries or group
of industries in the financial services sector (consisting of financial
institutions, including commercial banks, insurance companies, and
other financial companies and their respective holding companies) to
the extent that the banks originating or acting as agents for the
lenders, or granting or acting as intermediaries in participation
interests, in loans held by the Portfolio are deemed to be issuers of
such loans.
    The Portfolio may hold up to an aggregate amount of 15% of its net
assets in illiquid securities (calculated at the time of investment),
including Rule 144A securities, junior subordinated loans, and
unsecured loans deemed illiquid by the Adviser and Sub-Adviser. The
Portfolio 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
Portfolio's net assets are held in illiquid securities. Illiquid
securities include securities subject to contractual or other
restrictions on resale and other instruments that lack readily
available markets as determined in accordance with Commission staff
guidance.
    Except for investments in ETFs that may hold non-U.S. issues, the
Portfolio will not otherwise invest in non-U.S.-registered equity
issues. In addition, the Portfolio will not invest in options
contracts, futures contracts, or swap agreements.
    In certain situations or market conditions, the Portfolio may
temporarily depart from its normal investment policies and strategies
provided that the alternative is consistent with the Portfolio's
investment objective and is in the best interest of the Portfolio. For
example, the Portfolio may hold a higher than normal proportion of its
assets in cash in times of extreme market stress.\19\ The Portfolio may
borrow money from a bank as permitted by the 1940 Act or other
governing statute, by applicable rules thereunder, or by Commission or
other regulatory agency with authority over the Portfolio, but only for
temporary or emergency purposes.
---------------------------------------------------------------------------

    \19\ See note 6, supra.
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    The Portfolio will be classified as a ``diversified'' investment
company under the 1940 Act and intends to qualify for and to elect
treatment as a separate regulated investment company under Subchapter M
of the Internal Revenue Code.
    The Portfolio's investments will be consistent with the Portfolio's
investment objective and will not be used to enhance leverage.

Criteria To Be Applied to the Fund

    While the Fund, which would be listed pursuant to the criteria
applicable to actively managed funds under NYSE Arca Equities Rule
8.600, is not eligible for listing under NYSE Arca Equities Rule
5.2(j)(3) applicable to listing and trading of Investment Company Units
based on a securities index, the Adviser and Sub-Adviser represent
that, under normal market conditions, the Fund would generally satisfy
the generic fixed income initial listing requirements in NYSE Arca
Equities Rule 5.2(j)(3), Commentary .02 on a continuous basis measured
at the time of purchase, as described below.\20\
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    \20\ NYSE Arca Equities Rule 5.2(j)(3), Commentary .02 sets
forth generic listing criteria applicable to listing under Rule 19b-
4(e) under the Exchange Act of Investment Company Units (``Units'')
based on an index or portfolio of ``Fixed Income Securities,'' which
are debt securities that are notes, bonds, debentures, or evidence
of indebtedness that include, but are not limited to, U.S.
Department of Treasury securities (``Treasury Securities''),
government-sponsored entity securities (``GSE Securities''),
municipal securities, trust preferred securities, supra-national
debt, and debt of a foreign country or a subdivision thereof. NYSE
Arca Equities Rule 5.2(j)(3), Commentary .02(a) is as follows:
    (a) Eligibility Criteria for Index Components. Upon the initial
listing of a series of Units pursuant to Rule 19b-4(e) under the
Exchange Act, the components of an index or portfolio underlying a
series of Units shall meet the following criteria:
    (1) The index or portfolio must consist of Fixed Income
Securities;
    (2) Components that in aggregate account for at least 75% of the
weight of the index or portfolio each shall have a minimum original
principal amount outstanding of $100 million or more;
    (3) A component may be a convertible security, however, once the
convertible security component converts to the underlying equity
security, the component is removed from the index or portfolio;
    (4) No component fixed-income security (excluding Treasury
Securities and GSE Securities) shall represent more than 30% of the
weight of the index or portfolio, and the five most heavily weighted
component fixed-income securities in the index or portfolio shall
not in the aggregate account for more than 65% of the weight of the
index or portfolio;
    (5) An underlying index or portfolio (excluding one consisting
entirely of exempted securities) must include a minimum of 13 non-
affiliated issuers; and
    (6) Component securities that in aggregate account for at least
90% of the weight of the index or portfolio must be either (a) from
issuers that are required to file reports pursuant to Sections 13
and 15(d) of the Exchange Act; (b) from issuers that have a
worldwide market value of its outstanding common equity held by non-
affiliates of $700 million or more; (c) from issuers that have
outstanding securities that are notes, bonds debentures, or evidence
of indebtedness having a total remaining principal amount of at
least $1 billion; (d) exempted securities as defined in Section
3(a)(12) of the Exchange Act; or (e) from issuers that are a
government of a foreign country or a political subdivision of a
foreign country.
---------------------------------------------------------------------------

    With respect to the requirement of Commentary .02(a)(1), the Fund
(through its investment in the Portfolio) will invest at least 80% of
its net assets (plus any borrowings for investment purposes) in Senior
Loans. The Adviser and Sub-Adviser expect that substantially all of the
Fund's assets will be invested in Fixed Income Securities or cash/cash-
like instruments.
    With respect to the requirement of Commentary .02(a)(2), the
Portfolio's Adviser and Sub-Adviser expect that substantially all, but
at least 75%, of the Portfolio will be invested in loans that have an
aggregate outstanding exposure of greater than $100 million.
    With respect to the requirement of Commentary .02(a)(3), the Sub-
Adviser represents that the Portfolio will not typically invest in
convertible securities; however, should the Portfolio make such
investments, the Sub-Adviser would direct the Portfolio to divest any
converted equity security as soon as practicable.

    With respect to the requirement of Commentary .02(a)(4), the Sub-
Adviser represents that the Portfolio will not concentrate its
investments in excess of 30% in any one security (excluding Treasury
Securities and GSE Securities) and will not invest more than 65% of its
assets in five or fewer securities (excluding Treasury Securities and
GSE Securities).
    With respect to the requirement of Commentary .02(a)(5), the Sub-
Adviser represents that the Portfolio will invest in Senior Loans
issued to at least 13 non-affiliated borrowers.
    With respect to the requirements of Commentary .02(a)(6), the Sub-
Adviser represents that the Portfolio may make investments on a
continuous basis in compliance with such requirement at the time of
purchase; however, the market for Senior Loans differs in several
material respects from the market of other fixed income securities
(e.g., bonds). A significant percentage of the Senior Loan market would
not meet the criteria set forth in Commentary .02(a)(6), but would be
readily tradable in the secondary market. For the 12-month period
ending August 12, 2012, 53.4% of the borrowers of primary Senior Loans
(also known as leveraged loans) had total indebtedness of $1 billion or
less and Senior Loans outstanding of $250 million or more (Source:
S&P). In order to add to the Portfolio's diversification and to expand
the Portfolio's investment universe, the Portfolio may invest in Senior
Loans borrowed by entities that would not meet the criteria set forth
in Commentary .02(a)(6) above, provided the borrower has at least $250
million outstanding in Senior Loans. The Senior Loans borrowed by such
entities would be well known to participants in the Senior Loan
markets, would typically attract multiple market makers, and would
share the liquidity and transparency characteristics of senior secured
debt borrowed by entities meeting the criteria in the generic listing
criteria of NYSE Arca Equities Rule 5.2(j)(3), Commentary .02.
    Additional information regarding the Fund, the Portfolio, and the
Shares, including investment strategies, risks, Senior Loan market,
Primary and Secondary Indices, creation and redemption procedures,
fees, Portfolio holdings disclosure policies, distributions and taxes
is included in the Notice and Registration Statement.\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
proposal is consistent with Section 6(b)(5) of the Act,\24\ which
requires, among other things, that the Exchange's rules be designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest. The Commission notes that the Shares will be listed and
traded on the Exchange pursuant to the initial and continued listing
criteria in NYSE Arca Equities Rule 8.600.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f.
    \23\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \24\ 17 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' 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. 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, and quotation and last-sale
information will be available via the Consolidated Tape Association
(``CTA'') high-speed line. The intra-day, closing and settlement prices
of the Portfolio securities, including Senior Loans and other assets,
will also readily available from the national securities exchanges
trading such securities, automated quotation systems, published or
other public sources, or on-line information services. The Portfolio
Indicative Value (``PIV''), 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 Exchange's 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 its 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 net asset value (``NAV'') at the end of the
business day.\27\ The NAV of the Fund will be calculated by the
Custodian and determined at the close of the regular trading session on
the New York Stock Exchange (ordinarily 4:00 p.m. Eastern time) on each
day that such exchange is open. The Web site for the Fund will include
a form of the prospectus for the Fund and additional data relating to
NAV and other applicable quantitative information. In addition, a
basket composition file, which includes the security names, amount, and
share quantities, as applicable, required to be delivered in exchange
for the Fund's Shares, together with estimates and actual cash
components, will be publicly disseminated daily prior to the opening of
the New York Stock Exchange via the National Securities Clearing
Corporation. The Primary Index and Secondary Index descriptions are
publicly available, and information, including values, components, and
weightings, is updated and provided daily on a subscription basis by
S&P and Markit, respectively. Complete methodologies for the Primary
and Secondary Index are made available on the Web sites of S&P and
Markit, respectively. Moreover, prior to the commencement of trading,
the Exchange will inform its Equity Trading Permit Holders in an
Information Bulletin of the special characteristics and risks
associated with trading the Shares.
---------------------------------------------------------------------------

    \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 PIVs taken from the CTA
or other data feeds. See Notice, supra note 3, 78 FR at 10243, n.43.
    \27\ On a daily basis, the Disclosed Portfolio will include each
portfolio security, including Senior Loans, and other financial
instruments of the Portfolio with the following information on the
Fund's Web site: ticker symbol (if applicable), name of security and
financial instrument, number of shares (if applicable) and dollar
value of securities (including Senior Loans) and financial
instruments held in the Portfolio, and percentage weighting of the
security and financial instrument in the Portfolio.
---------------------------------------------------------------------------

    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 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.

Trading in Shares of the Fund will be halted if the circuit breaker
parameters in NYSE Arca Equities Rule 7.12 have been reached or because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable,\28\ and trading in the Shares
will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets
forth additional circumstances under which Shares of the Fund may be
halted.\29\ The Exchange states that it has a general policy
prohibiting the distribution of material, non-public information by its
employees. 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 Adviser and the Sub-Adviser are each affiliated
with a broker-dealer and have implemented a ``fire wall'' with respect
to such broker-dealers regarding access to information concerning the
composition and/or changes to the Fund's Portfolio.\31\ The Primary
Index Committee has implemented procedures designed to prevent the use
and dissemination of material, non-public information regarding the
Primary Index, and the Oversight Committee has implemented procedures
designed to prevent the use and dissemination of material, non-public
information regarding the Secondary Index. The Exchange further
represents that S&P and Markit are not broker-dealers or affiliated
with a broker-dealer, and each has implemented procedures designed to
prevent the use and dissemination of material, non-public information
regarding the Primary Index and Secondary Index, respectively. The
Commission also notes that the Financial Industry Regulatory Authority
(``FINRA''), on behalf of the Exchange,\32\ will communicate as needed
regarding trading in the Shares with other markets that are members of
the Intermarket Surveillance Group (``ISG'') or with which the Exchange
has in place a comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    \28\ These reasons may include: (1) The extent to which trading
is not occurring in the securities and/or the financial instruments
composing 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.
    \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).
    \30\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
    \31\ See note 5, supra 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 Adviser and Sub-Adviser and their 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.
    \32\ The Exchange states that, while 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.
---------------------------------------------------------------------------

    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 represents that trading in the Shares will be
subject to the existing trading surveillances, administered by FINRA on
behalf of the Exchange, which are designed to detect violations of
Exchange rules and applicable federal securities laws and that these
procedures are adequate to properly monitor Exchange trading of the
Shares in all trading sessions and to deter and detect violations of
Exchange rules and applicable federal securities laws.
    (4) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit 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 Equity Trading Permit 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 PIV will not be calculated or publicly
disseminated; (d) how information regarding the PIV is disseminated;
(e) 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 (f) trading
information.
    (5) For initial and/or continued listing, the Fund will be in
compliance with Rule 10A-3 under the Act,\33\ as provided by NYSE Arca
Equities Rule 5.3.
---------------------------------------------------------------------------

    \33\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) It is anticipated that the Portfolio, in accordance with its
principal investment strategy, will invest approximately 50% to 75% of
its net assets in Senior Loans that are eligible for inclusion and meet
the liquidity thresholds of the Primary and/or the Secondary Indices.
Each of the Portfolio's Senior Loan investments will have no less than
$250 million USD par outstanding. The Sub-Adviser does not intend to
purchase Senior Loans that are in default, and it is the expectation
that the Portfolio will only invest in broadly syndicated loans.
    (7) Under normal market conditions, the Fund would generally
satisfy the generic fixed income initial listing requirements in NYSE
Arca Equities Rule 5.2(j)(3), Commentary .02 on a continuous basis
measured at the time of purchase.
    (8) The Fund will not invest in non-U.S.-registered equity issues
(except for Underlying ETFs that may hold non-U.S. issues). The
Portfolio may hold in the aggregate up to 15% of its net assets in
illiquid securities (calculated at the time of investment), including
Rule 144A securities, junior subordinated loans, and unsecured loans
deemed illiquid by the Adviser and Sub-Adviser. The Portfolio will not
invest in options contracts, futures contracts, or swap agreements.
    (9) The Portfolio's and Fund's investments will be consistent with
the Portfolio's and Fund's investment objective and will not be used to
enhance leverage.
    (10) 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 \34\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\35\ that the proposed rule change (SR-NYSEArca-2013-08) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------

    \36\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-07585 Filed 4-1-13; 8:45 am]
BILLING CODE 8011-01-P