[Federal Register Volume 81, Number 74 (Monday, April 18, 2016)]
[Notices]
[Pages 22651-22656]
[FR Doc No: 2016-08818]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77587; File No. SR-NYSEArca-2016-28]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade
Shares of RiverFront Dynamic US Dividend Advantage ETF and RiverFront
Dynamic US Flex-Cap ETF under NYSE Arca Equities Rule 8.600

April 12, 2016.

I. Introduction

    On February 5, 2016, NYSE Arca, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange
Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to list
and trade shares (``Shares'') of the following under NYSE Arca Equities
Rule 8.600: RiverFront Dynamic US Dividend Advantage ETF and RiverFront
Dynamic US Flex-Cap ETF (each a ``Fund,'' and collectively, ``Funds'').
The Commission published notice of the proposed rule change in the
Federal Register on February 25, 2016.\3\ On April 7, 2016, the
Exchange submitted Amendment No. 1 to the proposed rule change.\4\ The
Commission is publishing this notice to solicit comment on Amendment
No. 1 to the proposed rule change from interested persons and is
approving the proposed rule change, as modified by Amendment No. 1, on
an accelerated basis.
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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. 34-77183 (February
19, 2016), 81 FR 9535 (February 25, 2016) (NYSEArca-2016-28)
(``Notice'').
    \4\ Amendment No. 1 replaced and superseded the original filing
in its entirety. Amendment No. 1 is available at http://www.sec.gov/comments/sr-nysearca-2016-28/nysearca201628-1.pdf.
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II. The Exchange's Description of the Proposal \5\
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    \5\ Additional information regarding the Trust (as defined
herein), the Funds, and the Shares, including investment strategies,
risks, creation and redemption procedures, fees, portfolio holdings,
disclosure policies, calculation of net asset value (``NAV''),
distributions, and taxes, among other things, can be found in the
Notice and the Registration Statement, as applicable. See Notice,
supra note 3, and Registration Statement, infra note 6.
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    The Exchange proposes to list and trade the Shares under NYSE Arca
Equities Rule 8.600, which governs the listing and trading of Managed
Fund Shares. The Funds are each a series of

ALPS ETF Trust (``Trust''), a statutory trust organized under the laws
of the State of Delaware and registered with the Commission as an open-
end management investment company.\6\ The Funds will be managed by ALPS
Advisors, Inc. (``Adviser''). RiverFront Investment Group, LLC (``Sub-
Adviser'') is the investment sub-adviser for the Funds.\7\
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    \6\ The Exchange states that the Trust is registered under the
1940 Act. According to the Exchange, on December 4, 2015, the Trust
filed with the Commission an amendment to its registration statement
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a)
(``Securities Act'') and the 1940 Act relating to the Funds (File
Nos. 333-148826 and 811-22175) (``Registration Statement''). The
Exchange states that the Commission has issued an order granting
certain exemptive relief to the Trust and the Adviser (as defined
herein) under the 1940 Act. See Investment Company Act Release No.
30553 (June 11, 2013) (File No. 812-13884) (``Exemptive Order'').
The Exchange states that the Funds will be offered in reliance upon
the Exemptive Order issued to the Trust and the Adviser.
    \7\ The Exchange states that neither the Adviser nor the Sub-
Adviser is registered as a broker-dealer but that each of the
Adviser and the Sub-Adviser is affiliated with a broker-dealer. The
Exchange represents that each of the Adviser and the Sub-Adviser has
implemented and will maintain a fire wall with respect to its
affiliated broker-dealer(s) regarding access to information
concerning the composition and/or changes to a Fund's portfolio. 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, such adviser or sub-adviser will
implement a fire wall with respect to such broker-dealer affiliate
regarding access to information concerning the composition of 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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RiverFront Dynamic US Dividend Advantage ETF: Principal Investments

    The Exchange states that the investment objective of the Fund will
be to seek to provide capital appreciation and dividend income. Under
normal market conditions,\8\ the Fund will seek to achieve its
investment objective by investing at least 65% of its net assets in a
portfolio of exchange-traded equity securities of publicly traded U.S.
companies with the potential for dividend growth. The exchange-traded
equity securities the Fund may invest in as part of its principal
investments are common stocks and common or preferred shares of real
estate investment trusts (``REITs'').
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    \8\ The term ``under normal market conditions'' includes, but is
not limited to, the absence of extreme volatility or trading halts
in the securities markets or the financial markets generally;
circumstances under which a Fund's investments are made for
temporary defensive purposes; 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 may invest in exchange-traded equities issued by small-,
mid-, and large-capitalization companies. The Fund may also invest in
other exchange-traded funds (``ETFs'') \9\ and/or exchange-traded
closed-end funds (``CEFs'') which invest in equity securities.
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    \9\ For purposes of this filing, ETFs consist of Investment
Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3)),
Portfolio Depositary Receipts (as described in NYSE Arca Equities
Rule 8.100); and Managed Fund Shares (as described in NYSE Arca
Equities Rule 8.600). All ETFs will be listed and traded in the U.S.
on a national securities exchange. The Funds will not invest in
leveraged or leveraged inverse ETFs.
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    The Exchange states that in selecting the Fund's portfolio
securities, the Sub-Adviser assembles a portfolio of eligible
securities based on several core attributes such as value, quality, and
momentum. The Sub-Adviser will consider multiple proprietary factors
within each core attribute, such as the price-to-book value of a
security when determining value, a company's cash as a percentage of
the company's market capitalization when determining quality, and a
security's three month relative price change when determining momentum.
Additionally, within a given sector, security selection will emphasize
companies offering a meaningful dividend yield premium over alternative
investments within that sector. This dividend yield emphasis is subject
to quality screens intended to limit exposure to companies whose
financial characteristics suggest the potential for dividend cuts. The
Sub-Adviser then assigns each qualifying security a score based on its
core attributes, including its dividend growth score, and selects the
individual securities with the highest scores for investment. The
Exchange states that in doing so, the Sub-Adviser will utilize its
proprietary optimization process to maximize the percentage of high-
scoring securities included in the portfolio. The Exchange states that
the Sub-Adviser will also consider the market capitalization of the
companies in which the Fund may invest, the potential for dividend
income, and the trading volume of a company's shares in the secondary
market.

RiverFront Dynamic US Flex-Cap ETF: Principal Investments

    The Exchange states that the investment objective of the Fund will
be to seek to provide capital appreciation. Under normal market
conditions,\10\ the Fund will seek to achieve its investment objective
by investing at least 65% of its net assets in a portfolio of exchange-
traded equity securities of publicly traded U.S. companies. The
exchange-traded equity securities the Fund may invest in as part of its
principal investments are common stocks and common or preferred shares
of REITs.
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    \10\ See note 8, supra.
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    The Fund may invest in exchange traded equities issued by small-,
mid-, and large-capitalization companies. The Fund may also invest in
other ETFs \11\ and/or CEFs which invest in equity securities.
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    \11\ See note 9, supra.
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    The Exchange states that in selecting the Fund's portfolio
securities, the Sub-Adviser assembles a portfolio of eligible
securities based on several core attributes such as value, quality, and
momentum. According to the Exchange, the Sub-Adviser will consider
multiple proprietary factors within each core attribute, such as the
price-to-book value of a security when determining value, a company's
cash as a percentage of the company's market capitalization when
determining quality, and a security's three month relative price change
when determining momentum. The Sub-Adviser then assigns each qualifying
security a score based on its core attributes and selects the
individual securities with the highest scores for investment. In doing
so, the Sub-Adviser utilizes its proprietary optimization process to
maximize the percentage of high-scoring securities included in the
portfolio. The Sub-Adviser will also consider the market capitalization
of the companies in which the Fund may invest, and the trading volume
of a company's shares in the secondary market.

Non-Principal Investments for Each Fund

    The Exchange states that while each Fund will, under normal market
conditions, principally invest at least 65% of its net assets in the
securities and financial instruments as described above, each Fund may
invest its remaining assets in the securities and financial instruments
described below.
    A Fund may invest in other types of equity securities, as follows:
Non-exchange traded common stock (including REITs), exchange-traded and
non-exchange traded preferred stock (including REITs), exchange-traded
and non-exchange traded convertible securities, exchange-traded master
limited partnerships (``MLPs''), and exchange-traded business
development companies (``BDCs'').
    According to the Exchange, a Fund may invest in exchange-traded or
over-the-counter (``OTC'') equity securities of

non-U.S. companies, including issuers in emerging market countries,\12\
but investments in non-U.S. securities, including non-U.S. equity
securities, may not exceed 20% of a Fund's net assets, plus the amount
of any borrowings for investment purposes, under normal market
conditions.\13\
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    \12\ According to the Exchange, the Funds consider an ``emerging
market country'' to be any country whose issuers are included in the
Morgan Stanley Capital International Emerging Markets Index and/or
those countries considered to be developing by the World Bank, the
International Finance Corporation or the United Nations. The Funds
consider an ``emerging market issuer'' to be one (i) domiciled or
with a principal place of business or primary securities trading
market in an emerging market country, or (ii) that derives a
substantial portion of its total revenues or profits from emerging
market countries.
    \13\ Similarly, at least 80% of each Fund's net assets, plus the
amount of any borrowings for investment purposes, must be invested
in the securities of U.S. issuers under normal market conditions. A
Fund considers a ``U.S. issuer'' to be one (i) domiciled or with a
principal place of business or primary securities trading market in
the United States, or (ii) that derives a substantial portion of its
total revenues or profits from the United States.
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    The Exchange states that a Fund may also invest in the following
short-term instruments on an ongoing basis to provide liquidity or for
other reasons: Money market instruments, cash, and cash equivalents.
Cash equivalents include the following: (i) Short-term obligations
issued by the U.S. Government; (ii) negotiable certificates of deposit,
fixed time deposits, and bankers' acceptances of U.S. and foreign banks
and similar institutions; (iii) commercial paper rated at the date of
purchase ``Prime-1'' by Moody's Investors Service, Inc. or ``A-1+'' or
``A-1'' by Standard & Poor's or, if unrated, of comparable quality as
determined by the Adviser or Sub-Adviser; (iv) repurchase agreements;
and (v) money market mutual funds.
    In addition, the Exchange states that a Fund may use derivative
instruments. Specifically, a Fund may use options, futures, swaps, and
forwards, for hedging or risk management purposes or as part of its
investment practices.\14\ The Exchange states that a Fund may enter
into the following derivatives: Futures on securities, indices, and
currencies, and options on such futures; exchange-traded and OTC
options on securities, indices, and currencies; exchange-traded and OTC
interest rate swaps, cross-currency swaps, total return swaps,
inflation swaps, and credit default swaps; and options on such swaps
(``swaptions'').\15\ The swaps in which a Fund will invest may be
cleared swaps or non-cleared. A Fund may enter into derivatives traded
in the U.S. or in non-U.S. countries. A Fund will collateralize its
obligations with liquid assets consistent with the 1940 Act and
interpretations thereunder.
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    \14\ The Funds will only enter into transactions in derivative
instruments with counterparties that the Adviser or Sub-Adviser
reasonably believes are capable of performing under the contract and
will post collateral as required by the counterparty. The Funds will
seek, where possible, to use counterparties, as applicable, whose
financial status is such that the risk of default is reduced;
however, the risk of losses resulting from default is still
possible. The Adviser or Sub-Adviser will evaluate the
creditworthiness of counterparties on a regular basis. In addition
to information provided by credit agencies, the Adviser or Sub-
Adviser will review approved counterparties using various factors,
which may include the counterparty's reputation, the Adviser's or
Sub-Adviser's past experience with the counterparty and the price/
market actions of debt of the counterparty.
    \15\ Options on swaps are traded OTC. According to the Exchange,
in the event that there are exchange-traded options on swaps, a Fund
may invest in these instruments.
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    The Exchange states that a Fund may invest in forward currency
contracts. Currency forward contracts may be used to increase or reduce
exposure to currency price movements. At the discretion of the Adviser
or Sub-Adviser, the Funds may enter into forward currency exchange
contracts for hedging purposes to help reduce the risks and volatility
caused by changes in foreign currency exchange rates.
    A Fund may gain exposure to foreign securities by purchasing U.S.
exchange-listed and traded American Depositary Receipts (``ADRs''),
non-exchange-listed ADRs, exchange-traded European Depositary Receipts
(``EDRs''), and exchange-traded Global Depositary Receipts (``GDRs'',
together with ADRs and EDRs, ``Depositary Receipts'').\16\
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    \16\ Non-exchange-listed ADRs will not exceed 10% of a Fund's
net assets.
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    The Exchange states that the Funds may invest in Rule 144A
restricted securities.

Investment Restrictions for Each Fund

    Each Fund may invest up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including securities that are offered pursuant to Rule 144A under the
Securities Act deemed illiquid by the Adviser or Sub-Adviser.\17\ Each
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 a 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.
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    \17\ According to the Exchange, in reaching liquidity decisions
with respect to Rule 144A securities, the Adviser or Sub-Adviser may
consider the following factors: the frequency of trades and quotes
for the security; the number of dealers willing to purchase or sell
the security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and 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).
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    Each Fund may invest up to 10% of its net assets in equity
securities traded OTC.
    The Funds intend to qualify for and to elect to be treated as
separate regulated investment companies under Subchapter M of the
Internal Revenue Code.
    Each Fund's investments will be consistent with such Fund's
investment objective and will not be used to enhance leverage. That is,
while each Fund will be permitted to borrow as permitted under the 1940
Act, a Fund's investments will not be used to seek performance that is
the multiple or inverse multiple (i.e., 2Xs and 3Xs) of a Fund's
primary broad-based securities benchmark index (as defined in Form N-
1A).\18\
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    \18\ The Exchange states that a Fund's broad-based securities
benchmark index will be identified in a future amendment to the
Registration Statement following a Fund's first full calendar year
of performance.
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    Not more than 10% of the net assets of each Fund in the aggregate
invested in equity securities (other than non-exchange traded money
market funds) shall consist of equity securities whose principal market
is not a member of the Intermarket Surveillance Group (``ISG'') or
party to a comprehensive surveillance sharing agreement (``CSSA'') with
the Exchange. Not more than 10% of the net assets of a Fund in the
aggregate invested in futures contracts or options contracts shall
consist of futures contracts or exchange-traded options contracts whose
principal market is not a member of the ISG or is a market with which
the Exchange does not have a CSSA.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Exchange
Act and the rules and regulations thereunder applicable to a national
securities exchange.\19\ In particular, the Commission finds that

the proposed rule change, as modified by Amendment No. 1, is consistent
with Section 6(b)(5) of the Exchange Act,\20\ which requires, among
other things, that the Exchange's rules be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The
Commission also finds that the proposal to list and trade the Shares on
the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Exchange Act,\21\ which sets forth the finding of Congress 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.
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    \19\ 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).
    \20\ 15 U.S.C. 78f(b)(5).
    \21\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    The Exchange has represented that quotation and last sale
information for the Shares, U.S. exchange-traded common stocks, as well
as other exchange traded equity securities, including Depositary
Receipts (excluding ADRs traded OTC and GDRs), preferred securities,
convertible securities, REITs, BDCs, CEFs, ETFs, and MLPs
(collectively, ``Exchange-Traded Equities'') will be available via the
Consolidated Tape Association (``CTA'') high-speed line and from the
securities exchanges on which they are listed. The Exchange represents
that price information for exchange-traded derivative instruments will
be available from the applicable exchange and from major market data
vendors. The Exchange states that price information for instruments
traded OTC (such as common stock traded OTC (including REITs), non-
exchange-listed ADRs, preferred securities (including REITs),
convertible securities, and cash equivalents) will be available from
major market data vendors. Price information for non-U.S. exchange-
traded equity securities will be readily available from the exchanges
trading such securities as well as automated quotation systems,
published or other public sources, or on-line information services.
Price information for money market instruments will be available from
major market data vendors. Quotation and last sale information for GDRs
will be available from the securities exchanges on which they are
listed. Information relating to futures, options on futures, and
exchange-traded swaps will be available from the exchange on which such
instruments are traded. Price information relating to exchange-traded
options will be available via the Options Price Reporting Authority.
Quotation information from brokers and dealers or pricing services will
be available for Rule 144A securities, ADRs traded OTC, and non-
exchange-traded derivatives, including forwards, OTC swaps, and OTC
options. The Exchange states that pricing information regarding each
asset class in which the Funds will invest is generally available
through nationally recognized data services providers through
subscription agreements.
    In addition, the indicative intra-day value, which is the Portfolio
Indicative Value, as defined in NYSE Arca Equities Rule 8.600 (c)(3),
will be widely disseminated by one or more major market data vendors at
least every 15 seconds during the Core Trading Session.\22\ On each
business day, before commencement of trading in Shares in the Core
Trading Session on the Exchange, each 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 a Fund's calculation of NAV at
the end of the business day.\23\
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    \22\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Portfolio Indicative Values taken from CTA or other data feeds.
    \23\ On a daily basis, the Adviser or Sub-Adviser will disclose
on the Funds' Web site the following information regarding each
portfolio holding, as applicable to the type of holding: Ticker
symbol, 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, commodity, index, or other
asset or instrument underlying the holding, if any; for options, the
option strike price; 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; effective date, if any;
market value of the holding; and the percentage weighting of the
holding in each Fund's portfolio. The Web site information will be
publicly available at no charge. The Funds' disclosure of derivative
positions in the Disclosed Portfolio will include information that
market participants can use to value these positions intraday.
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    The NAV per Share will be calculated by each Fund's custodian and
determined as of the close of the regular trading session on the New
York Stock Exchange (``NYSE'') (ordinarily 4:00 p.m., Eastern Time) on
each day that the NYSE is open. A basket composition file, which will
include the security names and share quantities required to be
delivered in exchange for each Fund's Shares, together with estimates
and actual cash components, will be publicly disseminated daily prior
to the opening of the NYSE via the National Securities Clearing
Corporation. Information regarding market price and trading volume for
the Shares will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services. Information regarding the previous day's closing price and
trading volume information for the Shares will be published daily in
the financial section of newspapers. The Web site for the Funds will
include a form of the prospectus for each Fund and additional data
relating to NAV and other applicable quantitative information.
    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
for each Fund will be made available to all market participants at the
same time.\24\
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    \24\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
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    The Exchange represents that trading in Shares of a Fund will be
halted if the circuit breaker parameters in NYSE Arca Equities Rule
7.12 have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.\25\ Trading in the Shares will be
subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth
circumstances under which Shares of a Fund may be halted.
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    \25\ These may include: (1) The extent to which trading is not
occurring in the securities and/or the financial instruments
comprising the Disclosed Portfolio of a Fund; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance
of a fair and orderly market are present.
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    The Exchange represents that it has a general policy prohibiting
the distribution of material, non-public information by its employees.
Each of the Adviser and the Sub-Adviser is affiliated with a broker-
dealer and has implemented and will maintain a fire wall with respect
to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to a Fund's portfolio.\26\
Further, the Commission notes that the Reporting Authority that
provides the Disclosed Portfolio of each Fund 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.\27\
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    \26\ See note 7, supra. The Exchange represents that an
investment adviser to an open-end fund is required to be registered
under the Investment Advisers Act of 1940.
    \27\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
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    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit Holders (``ETP Holders'') in an Information
Bulletin (``Bulletin'') of the special characteristics and risks
associated with trading the Shares. The Exchange represents that
trading in the Shares will be subject to the existing trading
surveillances, administered by the Exchange or the Financial Industry
Regulatory Authority (``FINRA'') on behalf of the Exchange, which are
designed to detect violations of Exchange rules and applicable federal
securities laws. The Exchange represents that these procedures are
adequate to properly monitor Exchange trading of the Shares in all
trading sessions and to deter and detect violations of Exchange rules
and federal securities laws applicable to trading on the Exchange.\28\
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    \28\ The Exchange states that FINRA conducts cross market
surveillances of trading on the Exchange pursuant to a regulatory
services agreement. The Exchange is responsible for FINRA's
performance under this regulatory services agreement.
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    The Exchange represents that it 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.
In support of this proposal, the Exchange has also made the following
representations:
    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) All statements and representations made in this filing
regarding (a) the description of the portfolio, (b) limitations on
portfolio holdings or reference assets, or (c) the applicability of
Exchange rules and surveillance procedures shall constitute continued
listing requirements for listing the Shares on the Exchange.
    (3) The issuer has represented to the Exchange that it will advise
the Exchange of any failure by the Funds to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Exchange Act, the Exchange will monitor \29\ for
compliance with the continued listing requirements. If the Funds are
not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under NYSE Arca Equities
Rule 5.5(m).
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    \29\ The Commission notes that certain other proposals for the
listing and trading of managed fund shares include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Amendment No. 2 to SR-BATS-2016-04,
available at: http://www.sec.gov/comments/sr-bats-2016-04/bats201604-2.pdf. In the context of this representation, it is the
Commission's view that ``monitor'' and ``surveil'' both mean ongoing
oversight of the Fund's compliance with the continued listing
requirements. Therefore, the Commission does not view ``monitor'' as
a more or less stringent obligation than ``surveil'' with respect to
the continued listing requirements.
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    (4) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (5) Trading in the Shares will be subject to the existing trading
surveillances, administered by the Exchange or FINRA on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws, and 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
federal securities laws applicable to trading on the Exchange.
    (6) The Exchange or FINRA, on behalf of the Exchange, will
communicate as needed regarding trading in the Shares, Exchange-Traded
Equities, and certain exchange-traded options and futures with other
markets and other entities that are members of the ISG, and the
Exchange, or FINRA on behalf of the Exchange, may obtain trading
information regarding trading in the Shares, Exchange-Traded Equities,
and certain exchange-traded options and futures from such markets and
other entities. In addition, the Exchange may obtain information
regarding trading in the Shares, Exchange-Traded Equities, and certain
exchange-traded options and futures from markets and other entities
that are members of ISG or with which the Exchange has in place a CSSA.
    (7) Prior to the commencement of trading of the Shares, the
Exchange will inform its ETP Holders in a Bulletin of the special
characteristics and risks associated with trading the Shares.
Specifically, the Bulletin will discuss the following: (a) The
procedures for purchases and redemptions of Shares in creation units
(and that Shares are not individually redeemable); (b) NYSE Arca
Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP
Holders to learn the essential facts relating to every customer prior
to trading the Shares; (c) the risks involved in trading the Shares
during the Opening and Late Trading Sessions when an updated IIV will
not be calculated or publicly disseminated; (d) how information
regarding the Portfolio Indicative Value and the Disclosed Portfolio is
disseminated; (e) the requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior to or concurrently
with the confirmation of a transaction; and (f) trading information.
    (8) For initial and continued listing, each Fund will be in
compliance with Rule 10A-3 under the Exchange Act,\30\ as provided by
NYSE Arca Equities Rule 5.3.
---------------------------------------------------------------------------

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

    (9) A minimum of 100,000 Shares of each Fund will be outstanding at
the commencement of trading on the Exchange.
    (10) Under normal market conditions, the RiverFront Dynamic US
Dividend Advantage ETF will seek to achieve its investment objective by
investing at least 65% of its net assets in a portfolio of exchange-
traded equity securities of publicly traded U.S. companies with the
potential for dividend growth.
    (11) Under normal market conditions, the RiverFront Dynamic US
Flex-Cap ETF will seek to achieve its investment objective by investing
at least 65% of its net assets in a portfolio of exchange-traded equity
securities of publicly traded U.S. companies.
    (12) Each Fund may invest up to an aggregate amount of 15% of its
net assets in illiquid assets (calculated at the time of investment),
including securities that are offered pursuant to Rule 144A under the
Securities Act deemed illiquid by the Adviser or Sub-Adviser.
    (13) Not more than 10% of the net assets of a Fund in the aggregate
invested in equity securities (other than non-exchange traded money
market funds) shall consist of equity securities whose principal market
is not a member of the ISG or party to a CSSA with the Exchange.
    (14) Not more than 10% of the net assets of a Fund in the aggregate
invested in futures contracts or options contracts shall consist of
futures contracts or options contracts whose principal market is not a
member of the ISG or is a market with which the Exchange does not have
a CSSA.
    (15) A Fund's investments in non-U.S. securities, including non-
U.S. equity securities, may not exceed 20% of a Fund's net assets, plus
the amount of any borrowings for investment purposes, under normal
market conditions.
    (16) A Fund may invest up to 10% of its net assets in equity
securities traded OTC.
    (17) The Funds will not invest in leveraged or leveraged inverse
ETFs.
    (18) A Fund's investments will be consistent with such Fund's
investment

objective and will not be used to enhance leverage. That is, while a
Fund will be permitted to borrow as permitted under the 1940 Act, a
Fund's investments will not be used to seek performance that is the
multiple or inverse multiple (i.e., 2Xs and 3Xs) of a Fund's primary
broad-based securities benchmark index (as defined in Form N-1A).
    This approval order is based on all of the Exchange's
representations, including those set forth above, in the Notice, and in
Amendment No. 1. The Commission notes that the Funds and the Shares
must comply with the requirements of NYSE Arca Equities Rule 8.600 to
be initially and continuously listed and traded on the Exchange.

IV. Solicitation of Comments on Amendment No. 1

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 1
to the proposed rule change is consistent with the Exchange 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-NYSEArca-2016-28 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2016-28. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2016-28 and should
be submitted on or before May 9, 2016.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the 30th day after the
date of publication of notice of Amendment No. 1 in the Federal
Register. Amendment No. 1 revised the proposed rule change by: (1)
Clarifying the permitted investments of the Funds; (2) modifying the
investment restrictions applicable to the Funds; (3) clarifying how
certain investments will be valued for computing each Fund's NAV; (4)
describing where price information can be obtained for certain
investments of the Funds; and (5) providing additional representations
relating to the continued listing requirements for listing the Shares
on the Exchange, including issuer notification requirements if a Fund
fails to comply with such continued listing requirements, and Exchange
surveillance obligations relating to such continued listing
requirements.
    Amendment No. 1 supplements the proposed rule change by, among
other things, clarifying the scope of the Funds' permitted investments
and investment restrictions and providing additional information about
the availability of pricing information for the Funds' underlying
assets. It also helps the Commission evaluate whether the listing and
trading of the Shares of the Funds would be consistent with the
protection of investors and the public interest.
    Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Exchange Act,\31\ to approve the proposed rule change,
as modified by Amendment No. 1 on an accelerated basis.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\32\ that the proposed rule change (SR-NYSEArca-2016-28),
as modified by Amendment No. 1 thereto, be, and it hereby is, approved
on an accelerated basis.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08818 Filed 4-15-16; 8:45 am]
 BILLING CODE 8011-01-P


2009, Susp.
    Waukon, City of, Allamakee        190008  August 26, 1975,    ......do..............   do.
     County.                                   Emerg; June 10,
                                               1980, Reg;
                                               September 25,
                                               2009, Susp.
Kansas:
    Dodge City, City of, Ford         205184  June 4, 1971,       ......do..............   do.
     County.                                   Emerg; May 19,
                                               1972, Reg;
                                               September 25,
                                               2009, Susp.

    Ford County Unincorporated        200101  March 26, 1981,     ......do..............   do.
     Areas.                                    Emerg; July 3,
                                               1986, Reg;
                                               September 25,
                                               2009, Susp.
    Humboldt, City of, Allen          200002  December 24, 1974,  ......do..............   do.
     County.                                   Emerg; September
                                               1, 1978, Reg;
                                               September 25,
                                               2009, Susp.
    Liberal, City of, Seward          200330  October 29, 1974,   ......do..............   do.
     County.                                   Emerg; September
                                               28, 1990, Reg;
                                               September 25,
                                               2009, Susp.
    Seward County                     200606  October 22, 1996,   ......do..............   do.
     Unincorporated Areas.                     Emerg; May 1,
                                               1999, Reg;
                                               September 25,
                                               2009, Susp.

          Region VIII

Colorado:
    Archuleta County                  080273  July 23, 1975,      ......do..............   do.
     Unincorporated Areas.                     Emerg; January 3,
                                               1979, Reg;
                                               September 25,
                                               2009, Susp.
    Cripple Creek, City of,           080174  July 15, 1975,      ......do..............   do.
     Teller County.                            Emerg; December
                                               18, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    Pagosa Springs, Town of,          080019  May 30, 1975,       ......do..............   do.
     Archuleta County.                         Emerg; December
                                               1, 1978, Reg;
                                               September 25,
                                               2009, Susp.
    Teller County                     080173  September 24,       ......do..............   do.
     Unincorporated Areas.                     1976, Emerg;
                                               September 30,
                                               1988, Reg;
                                               September 25,
                                               2009, Susp.
    Woodland Park, City of,           080175  April 23, 1975,     ......do..............   do.
     Teller County.                            Emerg; September
                                               30, 1988, Reg;
                                               September 25,
                                               2009, Susp.
Utah:
    Draper, City of, Salt Lake        490244  April 30, 1980,     ......do..............   do.
     County.                                   Emerg; December
                                               18, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    Herriman, Town of, Salt           490252  NA, Emerg; March    ......do..............   do.
     Lake County.                              12, 2002, Reg;
                                               September 25,
                                               2009, Susp.
    Holladay City, City of,           490253  NA, Emerg; August   ......do..............   do.
     Salt Lake County.                         24, 2004, Reg;
                                               September 25,
                                               2009, Susp.
    Midvale, City of, Salt            490211  December 9, 1976,   ......do..............   do.
     Lake County.                              Emerg; February
                                               2, 1984, Reg;
                                               September 25,
                                               2009, Susp.
    Murray, City of, Salt Lake        490103  December 19, 1974,  ......do..............   do.
     County.                                   Emerg; December
                                               18, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    Riverton, City of, Salt           490104  October 23, 1975,   ......do..............   do.
     Lake County.                              Emerg; February
                                               19, 1986, Reg;
                                               September 25,
                                               2009, Susp.
    Salt Lake City, City of,          490105  May 28, 1974,       ......do..............   do.
     Salt Lake County.                         Emerg; August 1,
                                               1983, Reg;
                                               September 25,
                                               2009, Susp.
    Salt Lake County                  490102  September 26,       ......do..............   do.
     Unincorporated Areas.                     1974, Emerg;
                                               December 18,
                                               1985, Reg;
                                               September 25,
                                               2009, Susp.
    South Jordan, City of,            490107  June 10, 1975,      ......do..............   do.
     Salt Lake County.                         Emerg; December
                                               18, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    South Salt Lake, City of,         490219  May 23, 1975,       ......do..............   do.
     Salt Lake County.                         Emerg; December
                                               18, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    Taylorsville, City of,            490248  NA, Emerg; October  ......do..............   do.
     Salt Lake County.                         9, 1998, Reg;
                                               September 25,
                                               2009, Susp.
    West Jordan, City of, Salt        490108  July 16, 1975,      ......do..............   do.
     Lake County.                              Emerg; September
                                               1, 1987, Reg;
                                               September 25,
                                               2009, Susp.
    West Valley City, City of,        490245  February 14, 1983,  ......do..............   do.
     Salt Lake County.                         Emerg; May 1,
                                               1986, Reg;
                                               September 25,
                                               2009, Susp.

           Region IX

Hawaii: Maui County                   150003  September 18,       ......do..............   do.
 Unincorporated Areas.                         1970, Emerg; June
                                               1, 1981, Reg;
                                               September 25,
                                               2009, Susp.
    Nevada: Pershing County           320032  May 15, 1984,       ......do..............   do.
     Unincorporated Areas.                     Emerg; June 17,
                                               1991, Reg;
                                               September 25,
                                               2009, Susp.

           Region X

Alaska:
    Anchorage, Municipality...        020005  June 12, 1970,      ......do..............   do.
                                               Emerg; September
                                               5, 1979, Reg;
                                               September 25,
                                               2009, Susp.
    Homer, City of, Kenai             020107  NA, Emerg; June 2,  ......do..............   do.
     Peninsula.                                2003, Reg;
                                               September 25,
                                               2009, Susp.
    Emmonak, City of, Wade            020125  May 22, 1992,       ......do..............   do.
     Hampton Census Area.                      Emerg; September
                                               21, 1998, Reg;
                                               September 25,
                                               2009, Susp.
Idaho:
    Benewah County                    160014  May 3, 1974,        ......do..............   do.
     Unincorporated Areas.                     Emerg; July 16,
                                               1979, Reg;
                                               September 25,
                                               2009, Susp.
    Saint Maries, City of,            160016  June 13, 1974,      ......do..............   do.
     Benewah County.                           Emerg; November
                                               15, 1979, Reg;
                                               September 25,
                                               2009, Susp.
    Tensed, City of, Benewah          160017  August 26, 1975,    ......do..............   do.
     County.                                   Emerg; August 15,
                                               1978, Reg;
                                               September 25,
                                               2009, Susp.

Oregon:
    Bandon, City of, Coos             410043  October 11, 1974,   ......do..............   do.
     County.                                   Emerg; August 15,
                                               1984, Reg;
                                               September 25,
                                               2009, Susp.
    Brookings, City of, Curry         410053  July 8, 1975,       ......do..............   do.
     County.                                   Emerg; September
                                               18, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    Coos Bay, City of, Coos           410044  August 23, 1974,    ......do..............   do.
     County.                                   Emerg; August 1,
                                               1984, Reg;
                                               September 25,
                                               2009, Susp.
    Coos County Unincorporated        410042  July 7, 1975,       ......do..............   do.
     Areas.                                    Emerg; November
                                               15, 1984, Reg;
                                               September 25,
                                               2009, Susp.
    Coquille, City of, Coos           410045  April 29, 1975,     ......do..............   do.
     County.                                   Emerg; September
                                               28, 1984, Reg;
                                               September 25,
                                               2009, Susp.
    Curry County                      410052  March 19, 1971,     ......do..............   do.
     Unincorporated Areas.                     Emerg; April 3,
                                               1978, Reg;
                                               September 25,
                                               2009, Susp.
    Gold Beach, City of, Curry        410054  November 11, 1974,  ......do..............   do.
     County.                                   Emerg; November
                                               15, 1985, Reg;
                                               September 25,
                                               2009, Susp.
    Lakeside, City of, Coos           410278  June 2, 1975,       ......do..............   do.
     County.                                   Emerg; August 1,
                                               1984, Reg;
                                               September 25,
                                               2009, Susp.
    Myrtle Point, City of,            410047  January 30, 1975,   ......do..............   do.
     Coos County.                              Emerg; July 16,
                                               1984, Reg;
                                               September 25,
                                               2009, Susp.
    North Bend, City of, Coos         410048  June 4, 1975,       ......do..............   do.
     County.                                   Emerg; August 1,
                                               1984, Reg;
                                               September 25,
                                               2009, Susp.
    Port Orford, City of,             410272  March 31, 1977,     ......do..............   do.
     Curry County.                             Emerg; January
                                               29, 1980, Reg;
                                               September 25,
                                               2009, Susp.
    Powers, City of, Coos             410049  August 6, 1975,     ......do..............   do.
     County.                                   Emerg; June 30,
                                               1976, Reg;
                                               September 25,
                                               2009, Susp.
----------------------------------------------------------------------------------------------------------------
*......do = Ditto.
Code for reading third column: Emerg. --Emergency; Reg. --Regular; Susp. --Suspension.

    Dated: September 14, 2009.
Deborah Ingram,
Acting Deputy Assistant Administrator for Mitigation, Mitigation
Directorate.
[FR Doc. E9-22687 Filed 9-21-09; 8:45 am]

BILLING CODE 9110-12-P