[Federal Register Volume 78, Number 32 (Friday, February 15, 2013)]
[Notices]
[Pages 11238-11243]
[FR Doc No: 2013-03490]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68871; File No. SR-NYSEArca-2012-138]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change To List and Trade PIMCO Foreign
Currency Strategy Exchange-Traded Fund Under NYSE Arca Equities Rule
8.600

February 8, 2013.

I. Introduction

    On December 6, 2012, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the PIMCO
Foreign Currency Strategy Exchange-Traded Fund (``Fund'') under NYSE
Arca Equities Rule 8.600. The proposed rule change was published for
comment in the Federal Register on December 26, 2012.\3\ The Commission
received no comments on the proposal. This order grants approval of the
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 68476 (December 19,
2012), 77 FR 76121 (``Notice'').
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II. Description of the Proposed Rule Change

    The Exchange proposes to list and trade the Shares of the Fund
pursuant to NYSE Arca Equities Rule 8.600, which governs the listing
and trading of Managed Fund Shares on the Exchange. The Shares will be
offered by PIMCO 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.\4\ The
investment manager to the Fund is Pacific Investment Management Company
LLC (``PIMCO'' or ``Adviser''). PIMCO Investments LLC serves as the
distributor for the Fund. State Street Bank & Trust Co. serves as the
custodian and transfer agent for the Fund. The Exchange represents that
the Adviser is affiliated with a broker-dealer and has implemented a
fire wall with respect to its broker-dealer affiliate regarding access
to information concerning the composition and/or changes to the
portfolio.\5\
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    \4\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). On October 28, 2011, the Trust filed with the
Commission an amendment to its registration statement on Form N-1A
under the Securities Act of 1933 (``Securities Act'') and under the
1940 Act relating to the Fund (File Nos. 333-155395 and 811-22250)
(``Registration Statement''). In addition, the Commission has issued
an order granting certain exemptive relief to the Trust under the
1940 Act. See Investment Company Act Release No. 28993 (November 10,
2009) (File No. 812-13571).
    \5\ See Commentary .06 to NYSE Arca Equities Rule 8.600. The
Exchange represents that in the event (a) the Adviser or any sub-
adviser becomes newly affiliated with a broker-dealer, or (b) any
new adviser or sub-adviser becomes affiliated with a broker-dealer,
it will implement a fire wall with respect to such broker-dealer
regarding access to information concerning the composition and/or
changes to the portfolio and will be subject to procedures designed
to prevent the use and dissemination of material, non-public
information regarding such portfolio.
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Principal Investment Strategies

    The Fund will seek maximum total return,\6\ consistent with prudent
investment management. The Fund will invest under normal circumstances
\7\ at least 80% of its assets in currencies of, or Fixed Income
Instruments \8\

denominated in the currencies of, foreign (non-U.S.) countries,
including, but not limited to, a combination of short-term Fixed Income
Instruments, money market securities, and currency forwards \9\ backed
by high-quality, low duration securities (``80% Holdings'').\10\ The
Fund will seek exposure to foreign (non-U.S.) currencies likely to
outperform the U.S. dollar over the long-term. Assets not invested in
the 80% Holdings may be invested in other types of Fixed Income
Instruments (e.g., Fixed Income Instruments denominated in U.S.
dollars).
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    \6\ The ``total return'' sought by the Fund will consist of
income and capital appreciation, if any, which generally arises from
decreases in interest rates, foreign currency appreciation, or
improving credit fundamentals for a particular sector or security.
    \7\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of extreme volatility or trading halts in
the fixed income markets or the financial markets generally;
operational issues causing dissemination of inaccurate market
information; or force majeure type events such as systems failure,
natural or man-made disaster, act of God, armed conflict, act of
terrorism, riot or labor disruption, or any similar intervening
circumstance.
    \8\ ``Fixed Income Instruments,'' as used generally in the
Registration Statement, includes: debt securities issued or
guaranteed by the U.S. Government, its agencies or government-
sponsored enterprises (``U.S. Government Securities''); corporate
debt securities of U.S. and non-U.S. issuers, including convertible
securities and corporate commercial paper; mortgage-backed and other
asset-backed securities; inflation-indexed bonds issued both by
governments and corporations; structured notes, including hybrid or
``indexed'' securities and event-linked bonds; bank capital and
trust preferred securities; loan participations and assignments;
delayed funding loans and revolving credit facilities; bank
certificates of deposit, fixed time deposits and bankers'
acceptances; repurchase agreements on Fixed Income Instruments and
reverse repurchase agreements on Fixed Income Instruments; debt
securities issued by states or local governments and their agencies,
authorities and other government-sponsored enterprises; obligations
of non-U.S. governments or their subdivisions, agencies and
government-sponsored enterprises; and obligations of international
agencies or supranational entities. Only those Fixed Income
Instruments that are denominated in foreign (non-U.S.) currencies
count towards the 80% Holdings (as defined above).
    \9\ A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date
at a price set at the time of the contract.
    \10\ In connection with its holdings in Fixed Income
Instruments, the Fund 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. PIMCO's Counterparty Risk
Committee evaluates the creditworthiness of counterparties on an
ongoing basis. In addition to information provided by credit
agencies, PIMCO credit analysts evaluate each approved counterparty
using various methods of analysis, including company visits,
earnings updates, the broker-dealer's reputation, PIMCO's past
experience with the broker-dealer, market levels for the
counterparty's debt and equity, the counterparty's liquidity and its
share of market participation.
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    The Fund may invest up to 50% of its total assets in securities and
instruments that are economically tied to emerging market countries,
which may include assets constituting the 80% Holdings.\11\ PIMCO will
select the Fund's country and currency composition based on its
evaluation of relative interest rates, inflation rates, exchange rates,
monetary and fiscal policies, trade and current account balances, legal
and political developments, and other specific factors PIMCO believes
to be relevant. The Fund will normally limit its exposure to a single
non-U.S. currency (from currency holdings or investments in securities
denominated in that currency) to 20% of its total assets.
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    \11\ PIMCO generally considers an instrument to be economically
tied to an emerging market country if the issuer or guarantor is a
government of an emerging market country (or any political
subdivision, agency, authority or instrumentality of such
government), if the issuer or guarantor is organized under the laws
of an emerging market country, or if the currency of settlement is a
currency of an emerging market country. PIMCO has broad discretion
to identify countries that it considers to qualify as emerging
markets. In making investments in emerging market instruments, the
Fund emphasizes those countries with relatively low gross national
product per capita and with the potential for rapid economic growth.
Emerging market countries are generally located in Asia, Africa, the
Middle East, Latin America, and Eastern Europe.
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    The average portfolio duration of the Fund will vary based on
PIMCO's forecast for interest rates and, under normal market
conditions, will vary from zero to three years.\12\ The Fund may invest
in both high yield securities (``junk bonds'') rated Ba, or investment
grade securities rated Baa or higher, by Moody's Investors Service,
Inc. (``Moody's''), or equivalently rated by Standard & Poor's Ratings
Services (``S&P'') or Fitch, Inc. (``Fitch''), or, if unrated,
determined by PIMCO to be of comparable quality.\13\ The Fund currently
anticipates that at least 50% of issues of Fixed Income Instruments
held by the Fund will be rated investment grade or determined by PIMCO
to be of comparable quality.\14\ The Fund is non-diversified, which
means that it may invest its assets in a smaller number of issuers than
a diversified fund.
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    \12\ Duration is a measure used to determine the sensitivity of
a security's price to changes in interest rates. The longer a
security's duration, the more sensitive it will be to changes in
interest rates.
    \13\ Securities rated Ba or lower by Moody's, or equivalently
rated by S&P or Fitch, are sometimes referred to as ``high yield
securities'' or ``junk bonds,'' while securities rated Baa or higher
are referred to as ``investment grade.'' Unrated securities may be
less liquid than comparably rated securities and involve the risk
that the portfolio manager may not accurately evaluate the
security's comparative credit rating. To the extent that the Fund
invests in unrated securities, the Fund's success in achieving its
investment objective may depend more heavily on the portfolio
manager's creditworthiness analysis than if the Fund invested
exclusively in rated securities. See note 14, infra.
    \14\ PIMCO utilizes sophisticated proprietary techniques in its
creditworthiness analysis of unrated securities similar to the
processes utilized by Moody's, S&P, and Fitch in their respective
analyses of rated securities. For example, in making a ``comparable
quality'' determination for an unrated security, PIMCO may evaluate
the likelihood of payment by the obligor, the nature and provisions
of the debt obligation, and the protection afforded by, and relative
position of, the debt obligation in the event of bankruptcy,
reorganization, or other arrangement under laws affecting creditors'
rights. Upon consideration of these and other factors, PIMCO may
determine that an unrated security is of comparable quality to rated
securities in which the Fund may invest consistent with the Fund's
credit quality guidelines described above.
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    While corporate debt securities and debt securities economically
tied to an emerging market country generally must have $200 million or
more par amount outstanding and significant par value traded to be
considered as an eligible investment for the Fund, at least 80% of
issues of such securities held by the Fund must have $200 million or
more par amount outstanding. The Fund may invest up to 10% of its
assets in mortgage-backed securities or in other asset-backed
securities, although this limitation does not apply to securities
issued or guaranteed by Federal agencies or U.S. government sponsored
instrumentalities.
    The Fund may purchase or sell securities on a when-issued, delayed
delivery, or forward commitment basis and may engage in short sales.
The Fund may, without limitation, seek to obtain market exposure to the
securities in which it primarily invests by entering into a series of
purchase and sale contracts or by using other investment techniques
(such as buy backs or dollar rolls).

Investment Selection Techniques

    In selecting investments for the Fund, PIMCO will develop an
outlook for interest rates, currency exchange rates, and the economy;
analyze credit and call risks; and use other asset selection
techniques. The proportion of the Fund's investments in securities with
particular characteristics (such as quality, sector, interest rate, or
maturity) will vary based on PIMCO's outlook for the U.S. economy and
the economies of other countries in the world, the financial markets,
and other factors. In seeking to identify undervalued currencies, PIMCO
may consider many factors, including but not limited to longer-term
analysis of relative interest rates, inflation rates, real exchange
rates, purchasing power parity, trade account balances, and current
account balances, as well as other factors that influence exchange
rates such as flows, market technical trends, and government policies.
With respect to fixed income investing, PIMCO will attempt to identify
areas of the bond market that are undervalued relative to the rest of
the market. PIMCO identifies these areas by grouping Fixed Income
Instruments into sectors such as money markets, governments,
corporates, mortgages, asset-backed, and international. Sophisticated
proprietary software then will assist in evaluating sectors and pricing
specific investments. Once investment opportunities are identified,
PIMCO will shift assets among sectors depending upon changes in
relative valuations, credit spreads, and other factors.

Additional Information Regarding Principal Investment Strategies \15\
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    \15\ Many of the investment strategies of the Fund are
discretionary, which means that PIMCO can decide from time to time
whether to use them or not.
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    The Fund will invest in currencies and Fixed Income Instruments
that are

economically tied to foreign (non-U.S.) countries. PIMCO generally
considers an instrument to be economically tied to a non-U.S. country
if the issuer is a foreign government (or any political subdivision,
agency, authority, or instrumentality of such government), or if the
issuer is organized under the laws of a non-U.S. country. In the case
of certain money market instruments, such instruments will be
considered economically tied to a non-U.S. country if either the issuer
or the guarantor of such money market instrument is organized under the
laws of a non-U.S. country.
    The Fund will invest in foreign currencies and may invest in Fixed
Income Instruments denominated in foreign (non-U.S.) currencies or
receive revenues in foreign currencies, and may engage in foreign
currency transactions on a spot (cash) basis and enter into forward
foreign currency exchange contracts.\16\ A forward foreign currency
exchange contract, which involves an obligation to purchase or sell a
specific currency at a future date at a price set at the time of the
contract, reduces the Fund's exposure to changes in the value of the
currency it will deliver and increases its exposure to changes in the
value of the currency it will receive for the duration of the contract.
Certain foreign currency transactions may also be settled in cash
rather than the actual delivery of the relevant currency. The effect on
the value of the Fund is similar to selling securities denominated in
one currency and purchasing securities denominated in another currency.
A contract to sell foreign currency would limit any potential gain
which might be realized if the value of the hedged currency increases.
The Fund may enter into these contracts to hedge against foreign
exchange risk, to increase exposure to a foreign currency, or to shift
exposure to foreign currency fluctuations from one currency to another.
Suitable hedging transactions may not be available in all circumstances
and there can be no assurance that the Fund will engage in such
transactions at any given time or from time to time.
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    \16\ The Fund will limit its investments in currencies to those
currencies with a minimum average daily foreign exchange turnover of
USD $1 billion, as determined by the Bank for International
Settlements (``BIS'') Triennial Central Bank Survey. As of the most
recent BIS Triennial Central Bank Survey, at least 52 separate
currencies had minimum average daily foreign exchange turnover of
USD $1 billion. For a list of eligible BIS currencies, see
www.bis.org.
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    The Fund may invest in variable and floating rate debt securities,
which are securities that pay interest at rates that adjust whenever a
specified interest rate changes or that reset on predetermined dates
(such as the last day of a month or calendar quarter). To the extent
the Fund invests in variable and floating rate debt securities that are
deemed illiquid, the Fund will limit such holdings to an amount
consistent with the 15% limitation on illiquid securities discussed
below. The Fund may invest in floating rate debt instruments
(``floaters'') and engage in credit spread trades. Variable and
floating rate securities generally are less sensitive to interest rate
changes, but may decline in value if their interest rates do not rise
as much, or as quickly, as interest rates in general. Conversely,
floating rate securities will not generally increase in value if
interest rates decline.
    The Fund may invest in bank capital securities. Bank capital
securities are issued by banks to help fulfill their regulatory capital
requirements. There are two common types of bank capital: Tier I and
Tier II. Bank capital is generally, but not always, of investment grade
quality. Tier I securities are typically exchange-traded and often take
the form of trust preferred securities. Tier II securities are commonly
thought of as hybrids of debt and preferred stock. Tier II securities
are typically traded over-the-counter, are often perpetual (with no
maturity date), are callable, and have a cumulative interest deferral
feature. This means that under certain conditions, the issuer bank can
withhold payment of interest until a later date. However, such deferred
interest payments generally earn interest.
    The Fund may make short sales as part of its overall portfolio
management strategies or to offset a potential decline in value of a
security.

Other Portfolio Holdings and Non-Principal Investment Strategies

    For the purpose of achieving income, the Fund may lend its
portfolio securities to brokers, dealers, and other financial
institutions, provided that a number of conditions are satisfied,
including that the loan is fully collateralized. When the Fund lends
portfolio securities, its investment performance will continue to
reflect changes in the value of the securities loaned, and the Fund
will also receive a fee or interest on the collateral. Cash collateral
received by the Fund in securities lending transactions may be invested
in short-term liquid Fixed Income Instruments or in money market or
short-term mutual funds or similar investment vehicles, including
affiliated money market or short-term mutual funds.
    The Fund may invest in, to the extent permitted by Section
12(d)(1)(A) of the 1940 Act, other affiliated and unaffiliated funds,
such as open-end or closed-end management investment companies,
including other exchange traded funds, provided that the Fund's
investment in units or shares of investment companies and other open-
end collective investment vehicles will not exceed 10% of the Fund's
total assets. The Fund may invest in securities lending collateral in
one or more money market funds to the extent permitted by Rule 12d1-1
under the 1940 Act, including series of PIMCO Funds, an affiliated
open-end management investment company managed by PIMCO.
    Subject to the restrictions and limitations of the 1940 Act, the
Fund may elect to pursue its investment objective either by investing
directly in securities or instruments, or by investing in one or more
underlying investment vehicles or companies that have substantially
similar investment objectives and policies as the Fund.
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid securities (calculated at the time of investment).
Certain financial instruments, including, but not limited to, Rule 144A
securities, loan participations and assignments, delayed funding loans,
revolving credit facilities,\17\ and fixed- and floating-rate loans
\18\ will be included in the 15% limitation on illiquid 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 the Fund will consider taking
appropriate steps in order to maintain adequate

liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid securities. Illiquid securities include securities subject to
contractual or other restrictions on resale and other instruments that
lack readily available markets as determined in accordance with
Commission staff guidance.
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    \17\ The Fund may enter into, or acquire participations in,
delayed funding loans and revolving credit facilities, in which a
lender agrees to make loans up to a maximum amount upon demand by
the borrower during a specified term. These commitments may have the
effect of requiring the Fund to increase its investments in a
company at a time when it might not otherwise decide to do so
(including at a time when the company's financial condition makes it
unlikely that such amounts will be repaid). To the extent that the
Fund is committed to advance additional funds, it will segregate or
``earmark'' assets determined to be liquid by PIMCO in accordance
with procedures established by the Fund's Board of Trustees in an
amount sufficient to meet such commitments.
    \18\ The Fund may invest in fixed- and floating-rate loans,
which investments generally will be in the form of loan
participations and assignments of portions of such loans.
Participations and assignments involve special types of risk,
including credit risk, interest rate risk, liquidity risk, and the
risks of being a lender.
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    The Fund intends to qualify annually and elect to be treated as a
regulated investment company under Subchapter M of the Internal Revenue
Code. The Fund may not concentrate its investments in a particular
industry, as that term is used in the 1940 Act, and as interpreted,
modified, or otherwise permitted by regulatory authority having
jurisdiction from time to time.
    If PIMCO believes that economic or market conditions are
unfavorable to investors, PIMCO may temporarily invest up to 100% of
the Fund's assets in certain defensive strategies, including holding a
substantial portion of the Fund's assets in cash, cash equivalents, or
other highly rated short-term securities, including securities issued
or guaranteed by the U.S. government, its agencies, or
instrumentalities.
    The Fund will not invest in any non-U.S registered equity
securities, except if such securities are traded on exchanges that are
members of the Intermarket Surveillance Group (``ISG'').
    The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage. That is,
while the Fund will be permitted to borrow as permitted under the 1940
Act, the Fund's investments will not be used to seek performance that
is the multiple or inverse multiple (i.e., 2X and 3X) of the Fund's
broad-based securities market index (as defined in Form N-1A).\19\
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    \19\ The Exchange represents that the Fund's broad-based
securities market index will be identified in a future amendment to
the Registration Statement following the Fund's first full calendar
year of performance.
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    The Fund will not invest in options contracts, futures contracts,
or swap agreements, in accordance with the Trust's Exemptive Order.
    Additional information regarding the Trust, the Fund, and the
Shares, including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings, disclosure policies,
distributions, and taxes is included in the Notice and Registration
Statement.\20\
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    \20\ See supra, notes 3 and 4, respectively.
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III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act \21\ and the rules and regulations thereunder applicable to a
national securities exchange.\22\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\23\
which requires, among other things, that the Exchange's rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. The Commission notes that
the Fund and the Shares must comply with the requirements of NYSE Arca
Equities Rule 8.600 to be listed and traded on the Exchange.
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    \21\ 15 U.S.C. 78f.
    \22\ 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).
    \23\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\24\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares will be available via the Consolidated
Tape Association (``CTA'') high-speed line. In addition, the Portfolio
Indicative Value (``PIV''), as defined in NYSE Arca Equities Rule
8.600(c)(3), will be widely disseminated by one or more major market
data vendors at least every 15 seconds during the Exchange's Core
Trading Session.\25\ On each business day before commencement of
trading in Shares in the Core Trading Session on the Exchange, the Fund
will disclose on its Web site the Disclosed Portfolio,\26\ as defined
in NYSE Arca Equities Rule 8.600(c)(2), that will form the basis for
the Fund's calculation of the net asset value (``NAV'') at the end of
the business day.\27\ The NAV of the Fund's Shares will be calculated
once daily Monday through Friday as of the close of trading on the New
York Stock Exchange (generally, 4:00 p.m. Eastern Time). In addition,
information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services, and
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 Trust's Web site will include a
form of the prospectus for the Fund and additional data relating to NAV
and other applicable quantitative information. Price information for
the debt securities and other financial instruments held by the Fund
will be available through major market data vendors. Further, a basket
composition file, which includes the security names and share
quantities, if applicable, required to be delivered in exchange for
Fund Shares, together with estimates and actual cash components, will
be publicly disseminated daily prior to the opening of the New York
Stock Exchange via the National Securities Clearing Corporation. The
basket represents one ``Creation Unit'' of the Fund.
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    \24\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \25\ According to the Exchange, several major market data
vendors display or make widely available PIVs taken from CTA or
other data feeds.
    \26\ On a daily basis, the Adviser will disclose for each
portfolio security or other financial instrument of the Fund the
following information: ticker symbol (if applicable), name of
security and financial instrument, number of shares or dollar value
of securities and financial instruments held in the portfolio, and
percentage weighting of the security and financial instrument in the
portfolio. The Web site information will be publicly available at no
charge.
    \27\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Fund
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day. The Web site information will be publicly
available at no charge.
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    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.\28\
In addition, the Exchange will halt trading in the Shares under the
specific

circumstances set forth in NYSE Arca Equities Rule 8.600(d)(2)(D), and
may halt trading in the Shares if trading is not occurring in the
securities or the financial instruments constituting the Disclosed
Portfolio of the Fund, or if other unusual conditions or circumstances
detrimental to the maintenance of a fair and orderly market are
present.\29\ The Exchange will consider the suspension of trading in or
removal from listing of the Shares if the PIV is no longer calculated
or available or the Disclosed Portfolio is not made available to all
market participants at the same time.\30\ The Exchange represents that
the Adviser is affiliated with a broker-dealer and has implemented a
fire wall with respect to its broker-dealer affiliate regarding access
to information concerning the composition and/or changes to the
portfolio.\31\ The Commission notes that the Adviser's personnel who
make decisions on the Fund's portfolio composition must be subject to
procedures designed to prevent the use and dissemination of material,
non-public information regarding the Fund's portfolio.\32\ Further, the
Commission notes that the Reporting Authority that provides the
Disclosed Portfolio must implement and maintain, or be subject to,
procedures designed to prevent the use and dissemination of material,
non-public information regarding the actual components of the
portfolio.\33\ The Exchange states that it has a general policy
prohibiting the distribution of material, non-public information by its
employees. The Commission also notes that the Fund will not invest in
any non-U.S.-registered equity securities, except if such securities
are traded on exchanges that are members of the ISG, and the Exchange
would be able to obtain surveillance information via ISG from other
exchanges that are members of ISG or with which the Exchange has
entered into a comprehensive surveillance sharing agreement.
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    \28\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \29\ With respect to trading halts, the Exchange may consider
all relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund. Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca
Equities Rule 7.12 have been reached. Trading also may be halted
because of market conditions or for reasons that, in the view of the
Exchange, make trading in the Shares inadvisable.
    \30\ See NYSE Arca Equities Rule 8.600(d)(2)(C)(ii).
    \31\ See supra note 5 and accompanying text. The Commission
notes that an investment adviser to an open-end fund is required to
be registered under the Investment Advisers Act of 1940 (``Advisers
Act''). As a result, the 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.
    \32\ See Commentary .06 to NYSE Arca Equities Rule 8.600.
    \33\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
---------------------------------------------------------------------------

    The Exchange further represents that the Shares are deemed to be
equity securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has made representations,
including:
    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) The Exchange has in place surveillance procedures that are
adequate to properly monitor trading in the Shares in all trading
sessions and to deter and detect violations of Exchange rules and
applicable federal securities laws.
    (4) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit (``ETP'') Holders in an Information Bulletin
(``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 Unit aggregations (and that Shares are not individually
redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty
of due diligence on its ETP Holders to learn the essential facts
relating to every customer prior to trading the Shares; (c) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated PIV will not be calculated or publicly
disseminated; (d) how information regarding the PIV is disseminated;
(e) the requirement that ETP Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (f) trading information.
    (5) For initial and continued listing, the Fund will be in
compliance with Rule 10A-3 under the Act,\34\ as provided by NYSE Arca
Equities Rule 5.3.
---------------------------------------------------------------------------

    \34\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid securities (calculated at the time of investment).
Certain financial instruments, including, but not limited to, Rule 144A
securities, loan participations and assignments, delayed funding loans,
revolving credit facilities, and fixed- and floating-rate loans will be
included in the 15% limitation on illiquid securities.
    (7) The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage.
    (8) The Fund will normally limit its exposure to a single non-U.S.
currency (from currency holdings or investments in securities
denominated in that currency) to 20% of its total assets. The Fund
currently anticipates that at least 50% of issues of Fixed Income
Instruments held by the Fund will be rated investment grade or
determined by PIMCO to be of comparable quality. In addition, while
corporate debt securities and debt securities economically tied to an
emerging market country generally must have $200 million or more par
amount outstanding and significant par value traded to be considered as
an eligible investment for the Fund, at least 80% of issues of such
securities held by the Fund must have $200 million or more par amount
outstanding.
    (9) The Fund will not invest in any non-U.S.-registered equity
securities, except if such securities are traded on exchanges that are
members of the ISG. The Exchange would be able to obtain surveillance
information via ISG from other exchanges that are members of ISG or
with which the Exchange has entered into a comprehensive surveillance
sharing agreement.
    (10) The Fund will not invest in options contracts, futures
contracts, or swap agreements, in accordance with the Trust's Exemptive
Order.
    (11) A minimum of 100,000 Shares of the Fund will be outstanding at
the commencement of trading on the Exchange.

This approval order is based on the Exchange's representations and
description of the Fund, including those set forth above and in the
Notice.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \35\ and the
rules and

regulations thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\36\ that the proposed rule change (SR-NYSEArca-2012-138) be, and
it hereby is, approved.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03490 Filed 2-14-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: February 6, 2006 (Volume 71, Number 24)]
[Notices]
[Page 6072]
[DOCID:fr06fe06-44]

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ENVIRONMENTAL PROTECTION AGENCY

[OPP-EPA-HQ-2005-0252; FRL-7762-3]

Iodomethane Risk Assessment; Notice of Availability; Extension of
Comment Period

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; extension of comment period.

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

SUMMARY: EPA issued a notice in the Federal Register of January 6,
2006, concerning the availability of EPA's human health risk assessment
and related documents for the fumigant iodomethane. These documents can
be viewed in the docket. This document is extending the comment period
for 15 days, from February 6, 2006 to February 21, 2006.

DATES: Comments, identified by the docket identification number OPP-
EPA-HQ-2005-0252, must be received on or before February 21, 2006.

ADDRESSES: Follow the detailed instructions as provided under ADDRESSES
in the Federal Register document of January 6, 2006.

FOR FURTHER INFORMATION CONTACT: Mary L. Waller, Registration Division
(7505C), Office of Pesticide Programs, Environmental Protection Agency,
1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail address:

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

     The Agency included in the proposed rule a list of those who may
be potentially affected by this action. If you have questions regarding
the applicability of this action to a particular entity, consult the
person listed under the FOR FURTHER INFORMATION CONTACT.

B. How Can I Access Electronic Copies of this Document and Other
Related Information?

     Electronic access. You may access this Federal Register document
electronically through the EPA Internet under ``Federal Register''
listings at http://www.epa.gov/fedrgstr/     In addition to using EDOCKET http://www.epa.gov/edocket/., you may

access this Federal Register document electronically through the EPA
Internet under the ``Federal Register'' listings at http://www.epa.gov/fedrgstr/.
 A frequently updated electronic version of 40 CFR part 180

is available at E-CFR Beta Site Two at http://www.gpoaccess.gov/ecfr/.

     EDOCKET, EPA's electronic public docket and comment system was
replaced on November 25,2005, by an enhanced Federal-wide electronic
docket management and comment system located at http://www.regulations.gov/.
 Follow the on-line instructions.

II. What Action is EPA taking?

     This document extends the public comment period established in the
Federal Register issued on January 6, 2006 (71 FR 930). In that
document, EPA made available the human health risk assessment for
iodomethane. Iodomethane is a new chemical proposed for use as a pre-
plant fumigant to control soil borne pests including weed seeds,
nematodes, insects, and diseases in fields intended for commercial
production of strawberries, tomatoes, peppers, turf, ornamentals
(flowers grown for cutting, bulbs, and nursery plants), trees and
vines. EPA is hereby extending the comment period, which was set to end
on February 6, 2006, to February 21, 2006.

III. What is the Agency's Authority for Taking this Action?

     Section 3 of FIFRA directs that ``the Administrator may by
regulation limit the distribution, sale, or use in any State of any
pesticide that is not registered under this Act and that is not the
subject of an experimental use permit under section 4 or an emergency
exemption under section 18.

IV. Do Any Statutory and Executive Order Reviews Apply to this Action?

     No. This action is not a rulemaking, it merely extends the date by
which public comments on a risk assessment must be submitted to EPA as
announced in a Notice of Availability that previously published in the
Federal Register of January 6, 2006 (71 FR 930).

List of Subjects

    Environmental protection, Pesticides and pests.

    Dated: February 1, 2006.
Lois Rossi,
Director, Registration Division, Office of Pesticide Programs.

[FR Doc. 06-1082 Filed 2-1-06; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register Volume 86, Number 153 (Thursday, August 12, 2021)]
[Notices]
[Pages 44356-44357]
[FR Doc No: 2021-17098]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8772-01-R9]

Public Water System Supervision Program Revision for the State of
Hawaii

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of tentative approval.

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SUMMARY: Notice is hereby given that the State of Hawaii (State)
revised its Public Water System Supervision (PWSS) Program under the
federal Safe Drinking Water Act (SDWA) by adopting regulations to
implement the federal Radionuclides Rule. The Environmental Protection
Agency (EPA) has determined that the State's revisions are no less
stringent than the corresponding Federal regulations and otherwise meet
applicable SDWA primacy requirements. Therefore, EPA intends to approve
the stated revisions as part of the State's PWSS Program.

DATES: A request for a public hearing must be received or postmarked
before September 13, 2021.

ADDRESSES: All documents relating to this determination are available
for inspection online at http://health.hawaii.gov/sdwb/public-notices/.
In addition, documents relating to this determination are available
between the hours of 8:30 a.m. and 4:00 p.m., Monday through Friday,
except official State holidays, at the following address: Hawaii
Department of Health, Safe Drinking Water Branch, 2385 Waimano Home
Road, Uluakupu Building 4, Pearl City, Hawaii 96782.

FOR FURTHER INFORMATION CONTACT: Anna Yen, United States Environmental
Protection Agency, Region 9, Drinking Water Section, via telephone
number:<PHONE_NUMBER> or email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Background. EPA approved the State's initial
application for PWSS Program primary enforcement authority
(``primacy'') on October 20, 1977 (42 FR 47244). Since initial
approval, EPA has approved various revisions to Hawaii's PWSS Program.
For the revisions covered by this action, the EPA revised the
Radionuclides Rule on December 7, 2000 (66 FR 76708), which had been in
effect since 1977. The revisions set new monitoring provisions for
community water systems; retain the existing maximum contaminant levels
(MCLs) for combined radium-226 and radium-228, gross alpha particle
radioactivity, and beta particle and photon activity; and regulate
uranium for the first time. EPA has determined that the Radionuclides
Rule was adopted verbatim into the Hawaii Administrative Rules (HAR),
Title 11, Chapter 20, in a manner that Hawaii's regulations are
comparable to and no less stringent than federal requirements. EPA has
also determined that the State's primacy revision application meets all
of the regulatory requirements for approval, as set forth in 40 CFR
142.12, including a side-by-side comparison of the Federal requirements
and the corresponding State authorities, additional materials to
support special primacy requirements of 40 CFR 142.16, and a statement
by the Hawaii Attorney General certifying that Hawaii's laws and
regulations to carry out the program revisions were duly adopted and
are enforceable. Therefore, EPA is tentatively approving the State's
revisions as part of Hawaii's PWSS Program.
    Public Process. Any interested party may request a public hearing
on this determination. A request for a public hearing must be received
or postmarked before September 13, 2021, and addressed to the Regional
Administrator at the EPA Region 9, via the following email address:
<EMAIL_ADDRESS>Please note, ``State Primacy Rule Determination''
in the subject line of the email. The Regional Administrator may deny
frivolous or insubstantial requests for a hearing. If a substantial
request for a public hearing is made before September 13, 2021, EPA
Region 9 will hold a public hearing. Any request for a public hearing
shall include the following information: 1. The name, address, and
telephone number of the individual, organization, or other entity
requesting a hearing; 2. A brief statement of the requesting person's
interest in the Regional Administrator's

determination and a brief statement of the information that the
requesting person intends to submit at such hearing; and 3. The
signature of the individual making the request, or, if the request is
made on behalf of an organization or other entity, the signature of a
responsible official of the organization or other entity.
    If EPA Region 9 does not receive a timely and appropriate request
for a hearing and the Regional Administrator does not elect to hold a
hearing on her own motion, this determination shall become final and
effective on September 13, 2021, and no further public notice will be
issued.
    Authority: Section 1413 of the Safe Drinking Water Act, as amended,
42 U.S.C. 300g-2 (1996), and 40 CFR part 142 of the National Primary
Drinking Water Regulations.

    Dated: August 5, 2021.
Deborah Jordan,
Acting Regional Administrator, EPA Region 9.
[FR Doc. 2021-17098 Filed 8-11-21; 8:45 am]
BILLING CODE 6560-50-P