[Federal Register Volume 79, Number 199 (Wednesday, October 15, 2014)]
[Notices]
[Pages 61857-61858]
[FR Doc No: 2014-24371]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER14-2548-002.
    Applicants: Ocean State Power.
    Description: Tariff Amendment per 35.17(b): Second Amendment--Ocean
State Power Notice of Succession to be effective 10/7/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5057.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER14-2556-001.
    Applicants: South Carolina Electric & Gas Company.
    Description: Compliance filing per 35: Order 792 Errata Notice
Filing to be effective 7/31/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5055.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER14-2750-002.
    Applicants: New York State Electric & Gas Corporation.
    Description: Tariff Amendment per 35.17(b): Amendment to Facilities
Agreement to be effective 9/1/2014.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5183.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER14-2967-001.
    Applicants: TransCanada Maine Wind Development Inc.
    Description: Tariff Amendment per 35.17(b): Amendment to
TransCanada Maine Wind Development 9/30/14 revised tariff to be
effective 10/7/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5048.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER14-2967-002.
    Applicants: TransCanada Maine Wind Development Inc.
    Description: Tariff Amendment per 35.17(b): Second Amendment--
TransCanada Maine Development Inc. to be effective 10/7/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5081.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-1-001.
    Applicants: TransCanada Energy Sales Ltd.
    Description: Tariff Amendment per 35.17(b): Second Amendment--
TransCanada Energy Sales to be effective 10/7/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5087.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-32-000.
    Applicants: Duke Energy Progress, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): DEP-PJM
Amended and Restated JOA Concurrence to be effective 12/1/2014.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5184.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-33-000.
    Applicants: The Dayton Power and Light Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): FERC
Rate Schedule No. 303, Village of Lakeview to be effective 1/1/2015.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5185.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-34-000.
    Applicants: Pacific Gas and Electric Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii):
Balancing Account Update 2015 (TRBAA, RSBA, ECRBAA) to be effective 1/
1/2015.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5186.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-35-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): 2014-
10-03 External Resources Filing to be effective 12/2/2014.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5191.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-36-000.
    Applicants: The Dayton Power and Light Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): FERC
Rate Schedule No. 304, Village of Mendon to be effective 1/1/2015.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5226.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-37-000.
    Applicants: The Dayton Power and Light Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): FERC
Rate Schedule No. 305, Village of Waynesfield to be effective 1/1/2015.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5236.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-38-000.
    Applicants: The Dayton Power and Light Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): FERC
Rate Schedule No. 306, Village of Yellow Springs to be effective 1/1/
2015.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5237.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-39-000.
    Applicants: The Dayton Power and Light Company.
    Description: Tariff Withdrawal per 35.15: FERC Rate Schedule No.
301, Village of Arcanum to be effective 1/1/2015.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5001.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-40-000.
    Applicants: The Dayton Power and Light Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): FERC
Rate Schedule No. 301, Village of Arcanum to be effective 1/1/2015.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5002.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-41-000.
    Applicants: The Dayton Power and Light Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): FERC
Rate Schedule No. 302, Village of Eldorado to be effective 1/1/2015.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5003.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-42-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Southwest Power Pool, Inc.'s Informational Filing to
Notify the Commission of Implementation of Year-Three Reallocation of
Revenue Requirements Pursuant to Attachments J and O for the Balanced
Portfolio.
    Filed Date: 10/3/14.
    Accession Number: 20141003-5243.
    Comments Due: 5 p.m. ET 10/24/14.

    Docket Numbers: ER15-43-000.
    Applicants: Midcontinent Independent System Operator.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): 2014-
10-06_ SA 2699 NSP-MMU T-T to be effective 1/1/2015 under ER15-43
Filing Type: 10.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5067.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-44-000.
    Applicants: Southern California Edison Company.

    Description: Tariff Withdrawal per 35.15: Notices of Cancellation
of SGIA and Distribution Serv Agmt with Apex to be effective 12/6/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5074.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-45-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii):
Attachment AE Revisions--MWP Start-Up Offer Recovery Eligibility
Clarifications to be effective 12/5/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5078.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-46-000.
    Applicants: Dragon Energy, LLC.
    Description: Tariff Withdrawal per 35.15: Cancellation of Entire
MBR Tariff to be effective 10/6/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5082.
    Comments Due: 5 p.m. ET 10/27/14.

    Docket Numbers: ER15-47-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii):
Revisions to Specify the Minimum Operating Limits of Non-Dispatachable
VERs to be effective 12/5/2014.
    Filed Date: 10/6/14.
    Accession Number: 20141006-5086.
    Comments Due: 5 p.m. ET 10/27/14.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: October 6, 2014.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2014-24371 Filed 10-14-14; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Notices]
[Pages 24488-24489]
[FR Doc No: 2012-9810]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2003-0078; FRL-9516-5]

Agency Information Collection Activities; Submission to OMB for
Review and Approval; Comment Request; Landfill Methane Outreach Program
(Renewal)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: In compliance with the Paperwork Reduction Act (44 U.S.C. 3501
et seq.), this document announces that an Information Collection
Request (ICR) has been forwarded to the Office of Management and Budget
(OMB) for review and approval. This is a request to renew an existing
approved collection. The ICR, which is abstracted below, describes the
nature of the information collection and its estimated burden and cost.

DATES: Additional comments may be submitted on or before May 24, 2012.

ADDRESSES: Submit your comments, referencing Docket ID number EPA-HQ-
OAR-2003-0078, to (1) EPA on line using www.regulations.gov (our
preferred method), by email to<EMAIL_ADDRESS>or by mail to:
EPA Docket Center (EPA/DC), Environmental Protection Agency, Air and
Radiation Docket, mail code 22821T, 1200 Pennsylvania Ave. NW.,
Washington, DC 20460; and (2) OMB by mail at: Office of Information and
Regulatory Affairs, Office of Management and Budget (OMB), Attention:
Desk Officer for EPA, 725 17th Street NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Victoria Ludwig, Climate Change
Division, Office of Atmospheric Programs, 6207J, Environmental
Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: EPA has submitted the following ICR to OMB
for review and approval according to the procedures prescribed in 5 CFR
1320.12. On January 27, 2012 (77 FR 4297), EPA sought comments on this
ICR pursuant to 5 CFR 1320.8(d). EPA received no comments. Any
additional comments on this ICR should be submitted to EPA and OMB
within 30 days of this notice.
    EPA has established a public docket for this ICR under Docket ID
number EPA-HQ-OAR-2003-0078, which is available for online viewing at
www.regulations.gov, or in-person

viewing at the Air and Radiation Docket in the EPA Docket Center (EPA/
DC), EPA West, Room 3334, 1301 Constitution Ave. NW., Washington, DC.
The EPA/DC Public Reading Room is open from 8:30 a.m. to 4:30 p.m.,
Monday through Friday, excluding legal holidays. The telephone number
for the Reading Room is<PHONE_NUMBER> and the telephone number for the
Air and Radiation Docket is<PHONE_NUMBER>.
    Use EPA's electronic docket and comment system at
www.regulations.gov to submit or view public comments, access the index
listing of the contents of the docket, and access those documents in
the docket that are available electronically. Once in the system,
select ``docket search,'' then key in the Docket ID number identified
above. Please note that EPA's policy is that public comments, whether
submitted electronically or in paper, will be made available for public
viewing at www.regulations.gov as EPA receives them and without change,
unless the comment contains copyrighted material, confidential business
information (CBI), or other information whose public disclosure is
restricted by statute. For further information about the electronic
docket, go to www.regulations.gov.
    Title: Landfill Methane Outreach Program (Renewal).
    ICR Numbers: EPA ICR Number 1849.06, OMB Control Number 2060-0446.
    ICR Status: This ICR is scheduled to expire on 04/30/2012. Under
OMB regulations, the Agency may continue to conduct or sponsor the
collection of information while this submission is pending at OMB. An
Agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information, unless it displays a currently
valid OMB control number. The OMB control numbers for EPA's regulations
in title 40 of the CFR, after appearing in the Federal Register when
approved, are listed in 40 CFR part 9, and are displayed either by
publication in the Federal Register or by other appropriate means, such
as on the related collection instrument or form, if applicable. The
display of OMB control numbers in certain EPA regulations is
consolidated in 40 CFR part 9.
    Abstract: The Landfill Methane Outreach Program (LMOP), created by
EPA as part of the Climate Change Action Plan, is a voluntary program
designed to encourage and facilitate the development of environmentally
and economically sound landfill gas (LFG) energy projects across the
United States in order to reduce methane emissions from landfills. LMOP
does this by educating local governments and communities about the
benefits of LFG recovery and use; building partnerships between state
agencies, industry, energy service providers, local communities, and
other stakeholders interested in developing this valuable resource in
their community; and providing tools to evaluate LFG energy potential.
LMOP signs voluntary Memoranda of Understanding (MOU) with these
organizations to enlist their support in promoting cost-effective LFG
utilization. The information collection includes completion and
submission of the MOU, and annual completion and submission of
information forms that include basic information on LFG energy projects
with which the organizations are involved as an effort to update the
LMOP Landfill and Landfill Gas Energy Project Database. The information
collection is to be utilized to maintain up-to-date data and
information about LMOP Partners and LFG energy projects with which they
are involved. The data will also be used by the public to assess LFG
energy project development opportunities in the United States. In
addition, the information collection will assist LMOP in evaluating the
reduction of methane emissions from landfills. Responses to the
information collection are voluntary.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection of information is estimated to average 3
hours for each respondent. Burden means the total time, effort, or
financial resources expended by persons to generate, maintain, retain,
and disclose or provide information to or for a Federal agency. This
includes the time needed to review instructions; develop, acquire,
install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements which have subsequently changed; train
personnel to be able to respond to a collection of information; search
data sources; complete and review the collection of information; and
transmit or otherwise disclose the information.
    Respondents/Affected Entities: Landfill owners and operators (both
public and private), LFG energy project developers, manufacturers and
suppliers of LFG energy equipment, utilities, industries using LFG
energy, state agencies involved in energy, air pollution, economic
development and solid waste management, and non-profits involved in the
solid waste management, public works, local government and renewable
energy sectors.
    Estimated Total Number of Potential Respondents: 1,220 existing
Partners plus 113 new Partners per year.
    Frequency of Response: On occasion.
    Estimated Total Annual Hour Burden: 4,216 hours.
    Estimated Total Annual Cost: $334,332, which includes $334,298 in
labor costs and $34 for operational and maintenance costs.
    Changes in the Estimates: There is a decrease of 1,671 hours in the
total estimated annual respondent burden compared with the burdens
identified in the existing ICR approved by OMB. The existing approved
ICR included a one-time, large-scale outreach to 1,000 additional
landfill owners and operators. This activity and group of entities are
not included in the scope of this ICR renewal, resulting in the overall
decreases in total hours and hours per respondent. This change is the
result of a program change. However, in the last approved ICR, Energy
Partners were not requested to update landfill gas energy project data,
and under this renewal, Energy Partners will be requested to provide
updates on their involvement in these projects. Also, there has been
growth in the number of overall Partners since the last renewal. These
changes offset the magnitude of the overall burden decrease. There have
been no major changes in how the information forms or MOU are dispersed
or collected since the last renewal. LMOP has previously implemented
simplifications and other changes to increase the efficiency of its ICR
process.

John Moses,
Director, Collection Strategies Division.
[FR Doc. 2012-9810 Filed 4-23-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 80, Number 3 (Tuesday, January 6, 2015)]
[Notices]
[Pages 585-593]
[FR Doc No: 2014-30901]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73965; File No. SR-BATS-2014-056]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To List and Trade Shares of the
iShares U.S. Fixed Income Balanced Risk ETF of the iShares U.S. ETF
Trust Under Rule 14.11(i)

December 30, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 19, 2014, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange filed a proposal list and trade shares of the iShares
U.S. Fixed Income Balanced Risk ETF (the ``Fund'') of the iShares U.S.
ETF Trust (the ``Trust'') under BATS Rule 14.11(i) (``Managed Fund
Shares''). The shares of the Fund are collectively referred to herein
as the ``Shares.''
    The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.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 parts of such
statements.

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

1. Purpose
    The Exchange proposes to list and trade the Shares under BATS Rule
14.11(i), which governs the listing and trading of Managed Fund Shares
on the Exchange.\3\ The Fund will be an actively managed fund. The
Shares will be offered by the Trust, which was established as a
Delaware statutory trust on June 21, 2011. The Trust is registered with
the Commission as an open-end investment company and has filed a
registration statement on behalf of the Fund on Form N-1A
(``Registration Statement'') with the Commission.\4\
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    \3\ The Commission approved BATS Rule 14.11(i) in Securities
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148
(September 6, 2011) (SR-BATS-2011-018).
    \4\ See Registration Statement on Form N-1A for the Trust, dated
April 21, 2014 (File Nos. 333-179904 and 811-22649). The
descriptions of the Fund and the Shares contained herein are based,
in part, on information in the Registration Statement. The
Commission has issued an order granting certain exemptive relief to
the Company under the Investment Company Act of 1940 (15 U.S.C. 80a-
1) (``1940 Act'') (the ``Exemptive Order''). See Investment Company
Act Release No. 29571 (January 24, 2011) (File No. 812-13601).
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Description of the Shares and the Fund
    BlackRock Fund Advisors is the investment adviser (``BFA'' or
``Adviser'') to the Fund.\5\ State Street Bank and Trust Company is the
administrator, custodian, and transfer agent for the Trust. BlackRock
Investments, LLC (``Distributor'') serves as the distributor for the
Trust.
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    \5\ BlackRock Fund Advisors is an indirect wholly owned
subsidiary of BlackRock, Inc.
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    BATS Rule 14.11(i)(7) provides that, if the investment adviser to
the investment company issuing Managed Fund Shares is affiliated with a
broker-dealer, such investment adviser shall erect a ``fire wall''
between the investment adviser and the broker-dealer with respect to
access to information concerning the composition and/or changes to such
investment company portfolio.\6\ In addition, Rule 14.11(i)(7) further
requires that personnel who make decisions on the investment company's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the applicable investment company portfolio. Rule 14.11(i)(7) is
similar to BATS Rule 14.11(b)(5)(A)(i), however, Rule 14.11(i)(7) in
connection with the establishment of a ``fire wall'' between the
investment adviser and the broker-dealer reflects the applicable open-
end fund's portfolio, not an underlying benchmark index, as is the case
with index-based funds. The Adviser is not a registered broker-dealer,
but is affiliated with multiple broker-dealers and has implemented
``fire walls'' with respect to such broker-dealers regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In addition, Adviser personnel who make decisions regarding
the Fund's portfolio are subject to procedures designed to prevent the
use and dissemination of material nonpublic information regarding the
Fund's portfolio. In the event that (a) the Adviser becomes a broker-
dealer or newly affiliated with a broker-dealer, or (b) any new adviser
or sub-adviser is a broker-dealer or becomes affiliated with a broker-
dealer, it will implement a fire wall with respect to its relevant
personnel or such broker-dealer affiliate, as applicable, 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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    \6\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the 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.
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iShares U.S. Fixed Income Balanced Risk Fund
    According to the Registration Statement, the Fund will seek total
return and preservation of capital. To achieve its objective, the Fund
will invest, under normal circumstances,\7\ at least 80% of its net
assets in U.S. dollar-denominated investment-grade and high-yield
fixed-income securities, futures, and swaps, as described below. The
Fund seeks to provide exposure to a portfolio of Fixed Income
Securities, as defined below, where the expected contribution of
interest rate risk and credit spread risk are approximately equal. The
Fund will attempt to achieve an aggregate credit spread risk based on
the credit spread risk of the underlying securities (as determined by
BFA) primarily by adjusting the allocation among underlying securities.
To the extent necessary, the Fund will attempt to balance the aggregate
interest rate risk against the aggregate credit spread risk of the
underlying securities (as determined by BFA) primarily by taking short
or long positions in U.S. Treasury futures contracts and interest rate
swaps, as further described below. In the absence of normal
circumstances, the Fund may temporarily depart from its normal
investment process, provided that such departure is, in the opinion of
BFA, consistent with the Fund's investment objective and in the best
interests of the Fund. For example, the Fund may hold a higher than
normal proportion of its assets in cash in response to adverse market,
economic, or political conditions.
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    \7\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of adverse market, economic, political, or
other conditions, including extreme volatility or trading halts in
the fixed income markets or the financial markets generally;
operational issues causing dissemination of inaccurate market
information; or force majeure type events such as systems failure,
natural or man-made disaster, act of God, armed conflict, act of
terrorism, riot, or labor disruption, or any similar intervening
circumstance.
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    The Fund is a non-diversified fund and therefore may invest a
greater portion of its assets in the securities of one or more issuers
than a diversified fund. The Fund, however, will not purchase the
securities of issuers conducting their principal business activity in
the same industry if, immediately after the purchase and as a result
thereof, the value of the Fund's investments in that industry would
equal or exceed 25% of the current value of the Fund's total assets,
provided that this restriction does not limit the Fund's: (i)
Investments in securities of other investment companies, (ii)
investments in securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities, or (iii) investments in repurchase
agreements collateralized by U.S. government securities.\8\
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    \8\ See Form N-1A, Item 9. The Commission has taken the position
that a fund is concentrated if it invests in more than 25% of the
value of its total assets in any one industry. See, e.g., Investment
Company Act Release No. 9011 (October 30, 1975), 40 FR 54241
(November 21, 1975).

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    The Fund intends to qualify each year as a regulated investment
company (a ``RIC'') under Subchapter M of the Internal Revenue Code of
1986, as amended.\9\ The Fund will invest its assets, and otherwise
conduct its operations, in a manner that is intended to satisfy the
qualifying income, diversification and distribution requirements
necessary to establish and maintain RIC qualification under Subchapter
M.
---------------------------------------------------------------------------

    \9\ 26 U.S.C. 851.
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Principal Holdings--Fixed Income Securities and Derivatives
    The Fund intends to achieve its investment objective by investing,
under normal circumstances, at least 80% of its net assets in a
portfolio of U.S. dollar-denominated investment-grade and high-yield
fixed-income securities (``Fixed Income Securities''), futures, and
swaps, as described below. The Fund may invest, without limitation, in
high-yield securities rated CCC or higher by Moody's Investors Service,
Inc. or equivalently rated by Standard & Poor's Financial Services LLC
and/or Fitch, or, if unrated, determined by BFA to be of equivalent
quality.\10\ Under normal circumstances, the Fund will invest primarily
in fixed-rate Fixed Income Securities of varying maturities.
---------------------------------------------------------------------------

    \10\ According to the Adviser, BFA may determine that unrated
Fixed Income Securities are of ``equivalent quality'' based on such
credit quality factors that it deems appropriate, which may include
among other things, performing an analysis similar, to the extent
possible, to that performed by a nationally recognized statistical
ratings organization when rating similar securities and issuers. In
making such a determination, BFA may consider internal analyses and
risk ratings, third party research and analysis, and other sources
of information, as deemed appropriate by the Adviser.
---------------------------------------------------------------------------

    The Fund seeks to balance interest rate and credit spread risk by
investing in a portfolio of Fixed Income Securities that in the
aggregate has approximately equal exposure to credit spread risk and
interest rate risk, which are measured by BFA as the volatility of
returns of a security associated with changes in the security's credit
spread or changes in interest rates. The Fund will adjust the
allocation among its underlying securities in an effort to achieve a
target credit spread risk and interest rate risk for the Fund's
portfolio. When necessary to balance the Fund's exposure to interest
rate risk against its exposure to credit spread risk, the Fund may take
short or long positions in U.S. Treasury futures and, through
transactions in interest rate swaps, take short positions in U.S.
Treasury securities. BFA will determine the aggregate credit spread
risk and interest rate risk of the Fund's portfolio. The Fund may also
invest in other interest rate futures contracts, including but not
limited to, Eurodollar and Federal Funds futures. The Fund's short
positions in U.S. Treasury futures and similar positions through
transaction in interest rate swaps are not intended to mitigate credit
spread risk or other factors influencing the price of non-government
bonds, which may have a greater impact than interest rates.\11\
---------------------------------------------------------------------------

    \11\ Derivatives held as part of the Fund's principal investment
strategy will be exchange traded and/or centrally cleared, and they
will be collateralized.
---------------------------------------------------------------------------

    Fixed Income Securities will include only the following
instruments: Fixed and floating rate debt securities, such as corporate
\12\ and government bonds, agency securities,\13\ instruments of non-
U.S. issuers,\14\ privately-issued securities,\15\ municipal bonds,
money market securities,\16\ and exchange traded and non-exchange
traded investment companies (including investment companies advised by
BFA or its affiliates) that invest in such Fixed Income
Securities.17 18
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    \12\ While the Fund is permitted to invest without restriction
in corporate bonds, the Adviser expects that, under normal
circumstances, the Fund will generally invest in corporate bond
issuances that have at least $250 million par amount outstanding.
    \13\ ``Agency securities'' for these purposes generally includes
securities issued by the following entities: Government National
Mortgage Association (Ginnie Mae), Federal National Mortgage
Association (Fannie Mae), Federal Home Loan Banks (FHLBanks),
Federal Home Loan Mortgage Corporation (Freddie Mac), Farm Credit
System (FCS) Farm Credit Banks (FCBanks), Student Loan Marketing
Association (Sallie Mae), Resolution Funding Corporation (REFCORP),
Financing Corporation (FICO), and the Farm Credit System (FCS)
Financial Assistance Corporation (FAC). Agency securities can
include, but are not limited to, mortgage-backed securities.
    \14\ ``Instruments of non-U.S. issuers'' means U.S. dollar-
denominated fixed income securities issued by non-U.S. corporate or
sovereign entities.
    \15\ ``Privately-issued securities'' generally includes Rule
144A securities and, in this context, may include both mortgage-
backed and non-mortgage 144A securities. To the Extent that the
Fund's holding of privately-issued securities include non-agency
mortgage-backed securities or illiquid assets, such holdings will be
subject to the limitations established in the ``Other Portfolio
Holdings'' and ``Investment Restrictions'' sections set forth below,
as applicable.
    \16\ The Adviser expects that, under normal circumstances, the
Fund intends to invest in money market securities (as described
below) in a manner consistent with its investment objective in order
to help manage cash flows in and out of the Fund, such as in
connection with payment of dividends or expenses, and to satisfy
margin requirements, to provide collateral or to otherwise back
investments in derivative instruments. For these purposes, money
market securities include: Short-term, high-quality obligations
issued or guaranteed by the U.S. Treasury or the agencies or
instrumentalities of the U.S. government; short-term, high-quality
securities issued or guaranteed by non-U.S. governments, agencies
and instrumentalities; repurchase agreements; money market mutual
funds; commercial paper; and deposits and other obligations of U.S.
and non-U.S. banks and financial institutions. All money market
securities acquired by the Fund will be rated investment grade. The
Fund does not intend to invest in any unrated money market
securities. However, it may do so, to a limited extent, such as
where a rated money market security becomes unrated, if such money
market security is determined by the Adviser to be of comparable
quality. BFA may determine that unrated securities are of comparable
quality based on such credit quality factors that it deems
appropriate, which may include, among other things, performing an
analysis similar, to the extent possible, to that performed by a
nationally recognized statistical rating organization rating similar
securities and issuers.
    \17\ The Fund currently anticipates investing in only registered
open-end investment companies, including mutual funds and the open-
end investment company funds described in BATS Rule 14.11, but notes
that the Exemptive Order allows the Fund to invest in ``shares of
other ETFs, shares of money market mutual funds, or other investment
companies.''
    \18\ See BATS Rule 14.11(c)(4)(B)(i) governing fixed income
based Index Fund Shares. For the purposes of this footnote, the term
``fixed income securities'' will include all holdings of the Fund.
The Fund's portfolio will meet the following requirements of Rule
14.11(c)(4)(B)(i): (1) Components that in the aggregate account for
at least 75% of the weight of the index or portfolio must have a
minimum original principal amount outstanding of $100 million or
more (Rule 14.11(c)(4)(B)(i)(b)); (2) a component may be a
convertible security, however, once the convertible security
component converts to an underlying equity security, the component
is removed from the index or portfolio (Rule 14.11(c)(4)(B)(i)(c));
and (3) no component fixed-income security (excluding Treasury
Securities) will represent more than 30% of the weight of the index
or portfolio, and the five highest weighted component fixed-income
securities do not in the aggregate account for more than 65% of the
weight of the index or portfolio (Rule 14.11(c)(4)(B)(i)(d)).
---------------------------------------------------------------------------

    BFA utilizes a model-based proprietary investment process to
assemble an investment portfolio comprised of (i) long positions in
U.S. dollar denominated investment-grade corporate bonds selected by
BFA based on certain criteria determined by BFA to be indicators of
creditworthiness; (ii) long positions in U.S. dollar-denominated high-
yield corporate bonds selected by BFA based on certain criteria
determined by BFA to be indicators of creditworthiness; (iii) long
positions in U.S. dollar-denominated agency mortgage backed securities;
(iv) long positions in U.S. dollar denominated agency mortgage to-be-
announced transactions; (v) long positions in U.S. Treasury securities;
(vi) short positions in U.S. Treasury futures; and (vii) short
positions in U.S. Treasury securities through transactions in interest
rate swaps. The Fund seeks to invest in a portfolio of Fixed Income
Securities that in the aggregate has approximately equal exposure to
credit spread risk and interest rate risk, which is measured by BFA as
the volatility of returns of a security associated with changes in the
security's credit spread or changes in interest rates.
    In selecting corporate securities for the Fund, BFA may employ a
credit

screening process centered on research and analysis of issuer credit
quality to reduce exposure to credit issuers that have potential for
experiencing credit deterioration. The remaining credit portfolio is
then constructed to match the key target risk characteristics which BFA
determines to be relevant in prevailing market conditions.
    To adjust the exposure to interest rate risks, BFA may employ short
positions primarily in U.S. Treasury futures and interest rate swaps.
By taking these short positions, BFA seeks to mitigate, but not
eliminate, the impact of Treasury interest rates on the performance of
the underlying bonds. The short positions are not intended to mitigate
other factors influencing the price of bonds.
    The Fund is an actively-managed fund that does not seek to
replicate the performance of a specified index.
Other Portfolio Holdings
    In addition to the derivatives holdings described above as part of
the Fund's principal investment strategy, the Fund may also, to a
limited extent (under normal circumstances, less than 20% of the Fund's
net assets), engage in transactions in the following instruments:
    Treasury futures, interest rate swaps, credit default swaps, asset-
backed Fixed Income Securities, non-Agency mortgage-backed fixed-income
securities, and structured securities \19\ in order to serve additional
investment objectives of the Fund.\20\ Asset-backed securities are
fixed-income securities that are backed by a pool of assets, usually
loans such as installment sale contracts or credit card receivables.
Mortgage-backed securities are asset-backed securities based on a
particular type of asset, a mortgage. There are a wide variety of
mortgage-backed securities involving commercial or residential, fixed-
rate or adjustable rate mortgages and mortgages issued by banks or
government agencies.
---------------------------------------------------------------------------

    \19\ ``Structured securities'' generally includes privately-
issued and publicly-issued structured securities, including certain
publicly-issued structured securities that are not agency
securities, excluding agency mortgage backed securities. Examples
include, but are not limited to: Asset-backed securities backed by
assets such as consumer receivables, credit cards, student loans,
and equipment leases; asset-backed commercial paper; credit linked
notes; and secured funding notes. Structured securities do not
include agency mortgage-backed securities.
    \20\ In addition to the uses described above, derivatives might
be included in the Fund's investments to serve additional investment
objectives of the Fund. Such uses are limited to the following:
Using a combination of treasury futures, interest rate swaps, and
credit default swaps to equitize coupon income and cash holdings.
The derivatives will be exchange traded and/or centrally cleared,
and they will be collateralized.
---------------------------------------------------------------------------

Investment Restrictions
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser \21\
under the 1940 Act.\22\ The Fund will monitor its portfolio liquidity
on an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid assets. Illiquid assets 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.
---------------------------------------------------------------------------

    \21\ In reaching liquidity decisions, the Adviser may consider
factors including: The frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; the nature of the
security and the nature of the marketplace in which it trades (e.g.,
the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of transfer); any legal or contractual
restrictions on the ability to transfer the security or asset;
significant developments involving the issuer or counterparty
specifically (e.g., default, bankruptcy, etc.) or the securities
markets generally; and settlement practices, registration
procedures, limitations on currency conversion or repatriation, and
transfer limitations (for foreign securities or other assets).
    \22\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the Securities Act of 1933).
---------------------------------------------------------------------------

    The Fund's investments will be consistent with the Fund's
investment objective and will not be used to achieve leveraged or
inverse leveraged returns (i.e. two times or three times the Fund's
benchmark).
Net Asset Value
    According to the Registration Statement, the net asset value
(``NAV'') of the Fund's Shares generally will be calculated once daily
Monday through Friday as of the close of regular trading on the
Exchange, generally 4:00 p.m. Eastern Time (the ``NAV Calculation
Time'') on each day that the Exchange is open for trading, based on
prices at the NAV Calculation Time. NAV per Share is calculated by
dividing the Fund's net assets by the number of Fund Shares
outstanding. The Fund's net assets are valued primarily on the basis of
market quotations.
    According to the Registration Statement, the Fund values non-
exchange traded Fixed Income Securities using prices provided directly
from one or more broker-dealers, market makers, independent third-party
pricing services which may use matrix pricing and valuation models to
derive values, or, for investment companies, NAV. Exchange traded
instruments, including exchange traded Fixed Income Securities and
futures, will be valued at market closing price or, if no sale has
occurred, at the last quoted bid price on the primary exchange on which
they are traded. Price information for exchange traded instruments,
including exchange traded derivatives, will be taken from the exchange
where the security is primarily traded. Over-the-counter derivatives
are valued based upon quotations from market makers or by a pricing
service in accordance with valuation procedures approved by the Fund's
board of directors. Certain short-term debt securities will be valued
on the basis of amortized cost.
    According to the Registration Statement, generally, trading in
certain Fixed Income Securities is substantially completed each day at
various times prior to the close of business on the Exchange.
Additionally, trading in certain derivatives is substantially completed
each day at various times prior to the close of business on the
Exchange. The values of such securities and derivatives used in
computing the NAV of the Fund are determined at such times.
    According to the Registration Statement, when market quotations are
not readily available or are believed by BFA to be unreliable, the
Fund's investments are valued at fair value. Fair value determinations
are made by BFA in accordance with policies and procedures approved by
the Fund's board of directors and in accordance with the 1940 Act. BFA
may conclude that a market quotation is not readily available or is
unreliable if a security or other asset or liability is thinly traded,

or where there is a significant event \23\ subsequent to the most
recent market quotation.
---------------------------------------------------------------------------

    \23\ A ``significant event'' is an event that, in the judgment
of BFA, is likely to cause a material change to the closing market
price of the asset or liability held by the Fund.
---------------------------------------------------------------------------

    According to the Registration Statement, fair value represents a
good faith approximation of the value of an asset or liability. The
fair value of an asset or liability held by the Fund is the amount the
Fund might reasonably expect to receive from the current sale of that
asset or the cost to extinguish that liability in an arm's-length
transaction. Valuing the Fund's investments using fair value pricing
will result in prices that may differ from current valuations and that
may not be the prices at which those investments could have been sold
during the period in which the particular fair values were used.
The Shares
    The Fund will issue and redeem Shares on a continuous basis at the
NAV per Share only in large blocks of a specified number of Shares or
multiples thereof (``Creation Units'') in transactions with authorized
participants who have entered into agreements with the Distributor. The
Fund currently anticipates that a Creation Unit will consist of 50,000
Shares, though this number may change from time to time, including
prior to listing of the Fund. The exact number of Shares that will
constitute a Creation Unit will be disclosed in the Registration
Statement of the Fund. Once created, Shares of the Fund trade on the
secondary market in amounts less than a Creation Unit.
    The consideration for purchase of Creation Units of the Fund
generally will consist of the in-kind deposit of a designated portfolio
of securities (including any portion of such securities for which cash
may be substituted) (i.e., the ``Deposit Securities''), and the ``Cash
Component'' computed as described below. Together, the Deposit
Securities and the Cash Component constitute the ``Fund Deposit,''
which represents the minimum initial and subsequent investment amount
for a Creation Unit of the Fund.
    The portfolio of securities required for purchase of a Creation
Unit may not be identical to the portfolio of securities the Fund will
deliver upon redemption of Fund Shares. The Deposit Securities and Fund
Securities (as defined below), as the case may be, in connection with a
purchase or redemption of a Creation Unit, generally will correspond
pro rata to the securities held by the Fund.
    The Cash Component will be an amount equal to the difference
between the NAV of the Shares (per Creation Unit) and the ``Deposit
Amount,'' which will be an amount equal to the market value of the
Deposit Securities, and serve to compensate for any differences between
the NAV per Creation Unit and the Deposit Amount. The Fund generally
offers Creation Units partially for cash. BFA will make available
through the National Securities Clearing Corporation (``NSCC'') on each
business day, prior to the opening of business on the Exchange, the
list of names and the required number or par value of each Deposit
Security and the amount of the Cash Component to be included in the
current Fund Deposit (based on information as of the end of the
previous business day) for the Fund.
    The identity and number or par value of the Deposit Securities may
change pursuant to changes in the composition of the Fund's portfolio
as rebalancing adjustments and corporate action events occur from time
to time. The composition of the Deposit Securities may also change in
response to adjustments to the weighting or composition of the holdings
of the Fund.
    The Fund reserves the right to permit or require the substitution
of a ``cash in lieu'' amount to be added to the Cash Component to
replace any Deposit Security that may not be available in sufficient
quantity for delivery or that may not be eligible for transfer through
the Depository Trust Company (``DTC'') or the clearing process through
the NSCC.\24\
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    \24\ The Adviser represents that, to the extent the Trust
permits or requires a ``cash in lieu'' amount, such transactions
will be effected in the same or equitable manner for all authorized
participants.
---------------------------------------------------------------------------

    Except as noted below, all creation orders must be placed for one
or more Creation Units and must be received by the Distributor in
proper form no later than 4:00 p.m., Eastern Time, in each case on the
date such order is placed in order for creation of Creation Units to be
effected based on the NAV of Shares of the Fund as next determined on
such date after receipt of the order in proper form. Orders requesting
substitution of a ``cash in lieu'' amount generally must be received by
the Distributor no later than 2:00 p.m., Eastern Time on the Settlement
Date. The ``Settlement Date'' is generally the third business day after
the transmittal date. On days when the Exchange or the bond markets
close earlier than normal, the Fund may require orders to create or to
redeem Creation Units to be placed earlier in the day.
    Fund Deposits must be delivered through the Federal Reserve System
(for cash and government securities), through DTC (for corporate and
municipal securities), or through a central depository account, such as
with Euroclear or DTC, maintained by State Street or a sub-custodian (a
``Central Depository Account'') by an authorized participant. Any
portion of a Fund Deposit that may not be delivered through the Federal
Reserve System or DTC must be delivered through a Central Depository
Account. The Fund Deposit transfer must be ordered by the authorized
participant in a timely fashion so as to ensure the delivery of the
requisite number of Deposit Securities to the account of the Fund by no
later than 3:00 p.m., Eastern Time, on the Settlement Date.
    A standard creation transaction fee will be imposed to offset the
transfer and other transaction costs associated with the issuance of
Creation Units.
    Shares of the Fund may be redeemed only in Creation Units at their
NAV next determined after receipt of a redemption request in proper
form by the Distributor and only on a business day. BFA will make
available through the NSCC, prior to the opening of business on the
Exchange on each business day, the designated portfolio of securities
(including any portion of such securities for which cash may be
substituted) that will be applicable (subject to possible amendment or
correction) to redemption requests received in proper form on that day
(``Fund Securities''). Fund Securities received on redemption may not
be identical to Deposit Securities that are applicable to creations of
Creation Units.
    Unless cash redemptions are available or specified for the Fund,
the redemption proceeds for a Creation Unit generally will consist of a
specified amount of cash, Fund Securities, plus additional cash in an
amount equal to the difference between the NAV of the Shares being
redeemed, as next determined after the receipt of a request in proper
form, and the value of the specified amount of cash and Fund
Securities, less a redemption transaction fee. The Fund generally
redeems Creation Units partially for cash.
    A standard redemption transaction fee will be imposed to offset
transfer and other transaction costs that may be incurred by the Fund.
    Redemption requests for Creation Units of the Fund must be
submitted to the Distributor by or through an authorized participant no
later than 4:00 p.m. Eastern Time on any business day, in order to
receive that day's NAV. The authorized participant must transmit the

request for redemption in the form required by the Fund to the
Distributor in accordance with procedures set forth in the authorized
participant agreement.
    Additional information regarding the Shares and the Fund, including
investment strategies, risks, creation and redemption procedures, fees
and expenses, portfolio holdings disclosure policies, distributions,
taxes and reports to be distributed to beneficial owners of the Shares
can be found in the Registration Statement or on the Web site for the
Fund (www.iShares.com), as applicable.
Availability of Information
    The Fund's Web site, which will be publicly available prior to the
public offering of Shares, will include a form of the prospectus for
the Fund that may be downloaded. The Web site will include additional
quantitative information updated on a daily basis, including, for the
Fund: (1) The prior business day's reported NAV, mid-point of the bid/
ask spread at the time of calculation of such NAV (the ``Bid/Ask
Price''),\25\ daily trading volume, and a calculation of the premium
and discount of the Bid/Ask Price against the NAV; and (2) data in
chart format displaying the frequency distribution of discounts and
premiums of the daily Bid/Ask Price against the NAV, within appropriate
ranges, for each of the four previous calendar quarters. Daily trading
volume information for the Fund will also be available in the financial
section of newspapers, through subscription services such as Bloomberg,
Thomson Reuters, and International Data Corporation, which can be
accessed by authorized participants and other investors, as well as
through other electronic services, including major public Web sites. On
each business day, before commencement of trading in Shares during
Regular Trading Hours \26\ on the Exchange, the Fund will disclose on
its Web site the identities and quantities of the portfolio of
securities and other assets (the ``Disclosed Portfolio'') held by the
Fund that will form the basis for the Fund's calculation of NAV at the
end of the business day.\27\
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    \25\ The Bid/Ask Price of the Fund will be determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
    \26\ Regular Trading Hours are 9:30 a.m. to 4:00 p.m. Eastern
Time.
    \27\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T + 1'').
Accordingly, the Fund will be able to disclose at the beginning of
the business day the portfolio that will form the basis for the NAV
calculation at the end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Disclosed Portfolio displayed on the Fund's
Web site will include the following information regarding each
portfolio holding, as applicable to the type of holding: Ticker symbol,
if any, CUSIP number or other identifier, if any; a description of the
holding (including the type of holding, such as the type of swap); the
identity of the security or other asset or instrument underlying the
holding,\28\ if any; quantity held (as measured by, for example, par
value, notional value or number of shares, contracts or units);
maturity date, if any; coupon rate, if any; market value of the
holding; and the percentage weighting of the holding in the Fund's
portfolio. The Web site information will be publicly available at no
charge.
---------------------------------------------------------------------------

    \28\ Derivatives that reference or allow delivery of more than
one asset, such as U.S. Treasury futures, will identify the
underlying asset generically.
---------------------------------------------------------------------------

    In addition, for the Fund, an estimated value, defined in BATS Rule
14.11(i)(3)(C) as the ``Intraday Indicative Value,'' that reflects an
estimated intraday value of the Fund's portfolio, will be disseminated.
Moreover, the Intraday Indicative Value will be based upon the current
value for the components of the Disclosed Portfolio and will be updated
and widely disseminated by one or more major market data vendors at
least every 15 seconds during the Exchange's Regular Trading Hours.\29\
In addition, the quotations of certain of the Fund's holdings may not
be updated during U.S. trading hours if such holdings do not trade in
the United States or if updated prices cannot be ascertained.
---------------------------------------------------------------------------

    \29\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Intraday Indicative Values published via the Consolidated Tape
Association (``CTA'') or other data feeds.
---------------------------------------------------------------------------

    The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of the Fund on a daily basis and provide a
close estimate of that value throughout the trading day.
    Intraday, executable price quotations on Fixed Income Securities
and non-exchange traded derivatives, including non-exchange listed
investment companies, are available from major broker-dealer firms and
for exchange-traded assets, including exchange listed investment
companies and futures, such intraday information is available directly
from the applicable listing exchange. All such intraday price
information is available through subscription services, such as
Bloomberg, Thomson Reuters and International Data Corporation, which
can be accessed by authorized participants and other investors.
    Information regarding market price and trading volume will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services. The previous
day's closing price and trading volume information for the Shares will
be published daily in the financial section of newspapers. Quotation
and last sale information for the Shares will be available on the
facilities of the CTA.
Initial and Continued Listing
    The Shares will be subject to BATS Rule 14.11(i), which sets forth
the initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and/or continued
listing, the Fund must be in compliance with Rule 10A-3 under the
Act.\30\ 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 NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.
---------------------------------------------------------------------------

    \30\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Trading Halts
    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. The Exchange will halt trading in
the Shares under the conditions specified in BATS Rule 11.18. Trading
may be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. These may
include: (1) The extent to which trading is not occurring in the
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. Trading in the Shares also will be subject to Rule
14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares
of the Fund may be halted.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. BATS will allow
trading in the Shares from 8:00 a.m.

until 5:00 p.m. Eastern Time. The Exchange has appropriate rules to
facilitate transactions in the Shares during all trading sessions. As
provided in BATS Rule 11.11(a), the minimum price variation for quoting
and entry of orders in Managed Fund Shares traded on the Exchange is
$0.01, with the exception of securities that are priced less than
$1.00, for which the minimum price variation for order entry is
$0.0001.
Surveillance
    The Exchange believes that its surveillance procedures are adequate
to properly monitor the trading of the Shares on the Exchange during
all trading sessions and to deter and detect violations of Exchange
rules and the applicable federal securities laws. Trading of the Shares
through the Exchange will be subject to the Exchange's surveillance
procedures for derivative products, including Managed Fund Shares. The
Exchange may obtain information regarding trading in the Shares and the
underlying shares in exchange traded investment companies and futures
via the Intermarket Surveillance Group (``ISG''), from other exchanges
who are members or affiliates of the ISG, or with which the Exchange
has entered into a comprehensive surveillance sharing agreement.\31\ In
addition, the Exchange is able to access, as needed, trade information
for certain fixed income instruments reported to FINRA's Trade
Reporting and Compliance Engine (``TRACE''). The Exchange prohibits the
distribution of material non-public information by its employees.
---------------------------------------------------------------------------

    \31\ For a list of the current members and affiliate members of
ISG, see www.isgportal.com. The Exchange notes that not all
components of the Disclosed Portfolio for the Fund may trade on
markets that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement. The Exchange
also notes that all of the investment company securities and futures
will trade on markets that are a member of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.
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Information Circular
    Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (1) The procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (2) BATS Rule 3.7, which imposes suitability
obligations on Exchange members with respect to recommending
transactions in the Shares to customers; (3) how information regarding
the Intraday Indicative Value and the Disclosed Portfolio is
disseminated; (4) the risks involved in trading the Shares during the
Pre-Opening \32\ and After Hours Trading Sessions \33\ when an updated
Intraday Indicative Value will not be calculated or publicly
disseminated; (5) the requirement that members deliver a prospectus to
investors purchasing newly issued Shares prior to or concurrently with
the confirmation of a transaction; and (6) trading information.
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    \32\ The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m.
Eastern Time.
    \33\ The After Hours Trading Session is from 4:00 p.m. to 5:00
p.m. Eastern Time.
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    In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to the Fund. Members purchasing Shares from the Fund for
resale to investors will deliver a prospectus to such investors. The
Information Circular will also discuss any exemptive, no-action, and
interpretive relief granted by the Commission from any rules under the
Act.
    In addition, the Information Circular will reference that the Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Circular will also disclose the trading
hours of the Shares of the Fund and the applicable NAV Calculation Time
for the Shares. The Information Circular will disclose that information
about the Shares of the Fund will be publicly available on the Fund's
Web site. In addition, the Information Circular will reference that the
Trust is subject to various fees and expenses described in the Fund's
Registration Statement.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act \34\ in general and Section 6(b)(5) of the Act \35\ in
particular in that it is 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.
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    \34\ 15 U.S.C. 78f.
    \35\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in BATS Rule 14.11(i). The
Exchange believes that its surveillance procedures are adequate to
properly monitor the trading of the Shares on the Exchange during all
trading sessions and to deter and detect violations of Exchange rules
and the applicable federal securities laws. If the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser to the investment company
shall erect a ``fire wall'' between the investment adviser and the
broker-dealer with respect to access to information concerning the
composition and/or changes to such investment company portfolio. The
Adviser is not a registered broker-dealer, but is affiliated with
multiple broker-dealers and has implemented ``fire walls'' with respect
to such broker-dealers regarding access to information concerning the
composition and/or changes to the Fund's portfolio. The Exchange may
obtain information regarding trading in the Shares and the underlying
shares in investment companies and futures via the ISG, from other
exchanges who are members or affiliates of the ISG, or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement.\36\
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    \36\ See supra note 31.
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    According to the Registration Statement, the Fund expects that it
will have at least 80% of its assets invested in U.S. dollar-
denominated investment grade Fixed Income Securities, futures, and
swaps. The Fund's exposure to any single industry will generally be
limited to 25% of the Fund's assets. The Fund's investments will be
consistent with the Fund's investment objective and will not be used to
achieve leveraged or inverse leveraged returns (i.e. two times or three
times the Fund's benchmark). The Fund also may invest its net assets in
money market instruments at the discretion of the Adviser. While the
Fund is permitted to invest without restriction in corporate bonds, the
Adviser expects that, under normal circumstances, the Fund will
generally invest in corporate bond issuances that have at least $250
million par amount outstanding. The Fund will not invest in non-U.S.
equity securities.
    The Fund may employ short positions primarily in U.S. Treasury
futures and interest rate swaps in order to mitigate the impact of
Treasury interest rates on the performance of the underlying bonds. The
short positions are not

intended to mitigate other factors influencing the price of bonds.
    Additionally, the Fund may hold up to an aggregate amount of 15% of
its net assets in illiquid assets (calculated at the time of
investment), including Rule 144A securities. The Fund will monitor its
portfolio liquidity on an ongoing basis to determine whether, in light
of current circumstances, an adequate level of liquidity is being
maintained, and will consider taking appropriate steps in order to
maintain adequate liquidity if, through a change in values, net assets,
or other circumstances, more than 15% of the Fund's net assets are held
in illiquid assets. Illiquid assets 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.
    In addition to the derivatives holdings described above as part of
the Fund's principal investment strategy, the Fund may also, to a
limited extent (under normal circumstances, less than 20% of the Fund's
net assets), engage in transactions in the following instruments:
    Treasury futures, interest rate swaps, credit default swaps, asset-
backed Fixed Income Securities, non-Agency mortgage-backed fixed-income
securities, and structured securities in order to serve additional
investment objectives of the Fund, as described above.\37\
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    \37\ See supra note 20.
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    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
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. In addition, a large amount of
information is publicly available regarding the Fund and the Shares,
thereby promoting market transparency. Moreover, the Intraday
Indicative Value will be disseminated by one or more major market data
vendors at least every 15 seconds during Regular Trading Hours. On each
business day, before commencement of trading in Shares during Regular
Trading Hours, the Fund will disclose on its Web site the Disclosed
Portfolio that will form the basis for the Fund's calculation of NAV at
the end of the business day. Pricing information will be available on
the Fund's Web site including: (1) The prior business day's reported
NAV, the Bid/Ask Price of the Fund, and a calculation of the premium
and discount of the Bid/Ask Price against the NAV; and (2) data in
chart format displaying the frequency distribution of discounts and
premiums of the daily Bid/Ask Price against the NAV, within appropriate
ranges, for each of the four previous calendar quarters. Additionally,
information regarding market price and trading 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 for the Shares will be available on the
facilities of the CTA. 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. Trading in Shares of the
Fund will be halted under the conditions specified in BATS Rule 11.18.
Trading may also be halted because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Shares
inadvisable. Finally, trading in the Shares will be subject to BATS
Rule 14.11(i)(4)(B)(iv), which sets forth circumstances under which
Shares of the Fund may be halted. In addition, the Exchange is able to
access, as needed, trade information for certain fixed income
instruments reported to FINRA's TRACE. As noted above, investors will
also have ready access to information regarding the Fund's holdings,
the Intraday Indicative Value, the Disclosed Portfolio, and quotation
and last sale information for the Shares.
    Intraday, executable price quotations on Fixed Income Securities
and non-exchange traded derivatives are available from major broker-
dealer firms and for exchange-traded assets, including investment
companies and futures, such intraday information is available directly
from the applicable listing exchange. All such intraday price
information is available through subscription services, such as
Bloomberg, Thomson Reuters and International Data Corporation, which
can be accessed by authorized participants and other investors.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, as noted above, investors
will have ready access to information regarding the Fund's holdings,
the Intraday Indicative Value, the Disclosed Portfolio, and quotation
and last sale information for the Shares.
    For the above reasons, the Exchange believes that the proposed rule
change is consistent with the requirements of Section 6(b)(5) of the
Act.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of an
additional actively-managed exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace.

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

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BATS-2014-056 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BATS-2014-056. 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 at 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-
BATS-2014-056, and should be submitted on or before January 27, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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    \38\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2014-30901 Filed 1-5-15; 8:45 am]
BILLING CODE 8011-01-P