[Federal Register Volume 76, Number 235 (Wednesday, December 7, 2011)]
[Notices]
[Pages 76464-76472]
[FR Doc No: 2011-31335]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65860; File No. SR-NYSEArca-2011-85]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to the Listing and Trading of SPDR
SSgA Real Assets ETF; SPDR SSgA Income Allocation ETF; SPDR SSgA
Conservative Global Allocation ETF; SPDR SSgA Global Allocation ETF;
and SPDR SSgA Aggressive Global Allocation ETF Under NYSE Arca Equities
Rule 8.600

 December 1, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on November 16, 2011, NYSE Arca, Inc.
(``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to list and trade the following under NYSE
Arca Equities Rule 8.600 (``Managed Fund Shares''): SPDR SSgA Real
Assets ETF; SPDR SSgA Income Allocation ETF; SPDR SSgA Conservative
Global Allocation ETF; SPDR SSgA Global Allocation ETF; and SPDR SSgA
Aggressive Global Allocation ETF. The text of the proposed rule change
is available at the Exchange, the Commission's Public Reference Room,
and http://www.nyse.com.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.

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

1. Purpose
    The Exchange proposes to list and trade the following Managed Fund
Shares \3\ (``Shares'') under NYSE Arca Equities Rule 8.600: SPDR SSgA
Real Assets ETF; SPDR SSgA Income Allocation ETF; SPDR SSgA
Conservative Global Allocation ETF; SPDR SSgA Global Allocation ETF;
and SPDR SSgA Aggressive Global Allocation ETF (each, a ``Fund'' and,
collectively, ``Funds'').\4\ The Shares will be offered by SSgA Active
ETF Trust (``Trust''), which is organized as a Massachusetts business
trust and is registered with the Commission as an open-end management
investment company.\5\ SSgA FM serves as the investment adviser to the
Funds (``Adviser''). State Street Global Markets, LLC (``Distributor'')
is the principal underwriter and distributor of the Funds' Shares.
State Street Bank and Trust Company (``Administrator,'' ``Custodian''
or ``Transfer Agent'') serves as administrator, custodian and transfer
agent for the Funds.
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    \3\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
    \4\ The Commission has previously approved listing and trading
on the Exchange of a number of actively managed funds under Rule
8.600. See, e.g., Securities Exchange Act Release Nos. 57801 (May 8,
2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-2008-31) (order
approving Exchange listing and trading of twelve actively-managed
funds of the WisdomTree Trust); 60460 (August 7, 2009), 74 FR 41468
(August 17, 2009) (SR-NYSEArcav2009-55) (order approving listing of
Dent Tactical ETF); 61365 (January 15, 2010), 75 FR 4124 (January
26, 2010) (SR-NYSEArca-2009-114) (order approving listing and
trading of Grail McDonnell Fixed Income ETFs); 60981 (November 10,
2009), 74 FR 59594 (November 18, 2009) (SR-NYSEArca-2009-79) (order
approving listing of five fixed income funds of the PIMCO ETF
Trust); 63076 (October 12, 2010), 75 FR 63874 (October 18, 2010)
(SR-NYSEArca-2010-79) (order approving listing of Cambria Global
Tactical ETF).
    \5\ The Trust is registered under the 1940 Act. On September 12,
2011, the Trust filed with the Commission Form N-1A under the
Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act
relating to the Funds (File Nos. 333-173276 and 811-22542)
(``Registration Statement''). The description of the operation of
the Trust and the Funds herein is based, in part, on the
Registration Statement. In addition, the Commission has issued an
order granting certain exemptive relief to the Trust under the1940
Act. See Investment Company Act Release No. 29524 (December 13,
2010) (File No. 812-13487) (``Exemptive Order'').
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    Commentary .06 to Rule 8.600 provides that, if the investment
adviser to the investment company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect a
``fire wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio. In addition, Commentary
.06 further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material nonpublic information
regarding the open-end fund's portfolio.\6\ Commentary .06 to Rule
8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca
Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the
establishment of a ``fire wall'' between the investment adviser and the
broker-dealer reflects the applicable open-end fund's portfolio, not an
underlying benchmark index, as is the case with index-based funds. The
Adviser is affiliated with a broker-dealer and has implemented a ``fire
wall'' with respect to such broker-dealer regarding access to
information concerning the composition and/or changes to the Funds'
portfolios. 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 a portfolio,
and will be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding such
portfolio.
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    \6\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (``Advisers
Act''). As a result, the Adviser and its related personnel are
subject to the provisions of Rule 204A-1 under the Advisers Act
relating to codes of ethics. This Rule requires investment advisers
to adopt a code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) Adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
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SPDR SSgA Real Assets ETF
    The SPDR SSgA Real Assets ETF will seek to achieve a real return
consisting of capital appreciation and current income. The Fund will
invest substantially all of its assets in the SSgA Real Assets
Portfolio (``Real Assets Portfolio''), a separate series of the SSgA
Master Trust with an identical investment objective as the Fund. As a
result, the Fund will invest indirectly through the Real Assets
Portfolio. The Adviser will invest, under normal circumstances,\7\ at
least 80% of the Real Assets Portfolio's net assets among exchange
traded products (``ETPs'') that provide exposure to ``real assets.''
The Adviser considers ``real assets'' to include the following four
primary asset classes: (i) Inflation protected securities issued by the
United States government, its agencies and/or instrumentalities, as
well as inflation protected securities issued by foreign governments,
agencies, and/or instrumentalities; (ii) domestic and international
real estate securities; (iii) commodities; and (iv) publicly-traded
companies in natural resources and/or commodities businesses. The Real
Assets Portfolio will concentrate at least 25% of its assets in
companies primarily involved in the energy sector and real estate
industry through ETPs. The Real Assets Portfolio's allocation among
those asset classes will be in proportions consistent with the
Adviser's evaluation of the expected returns and risks of each asset
class as well as the allocation that, in the Adviser's view, will best
meet the Real Assets Portfolio's investment objective. The allocations
to each asset class will change over time as the Adviser's expectations
of each asset class shift. The Real Assets Portfolio's indirect
holdings by virtue of investing in ETPs representing those asset
classes will consist of a diversified mix of domestic and international
equity securities, government and corporate bonds, inflation protected
securities, commodities and real estate investment trusts (``REITs'').
ETPs may include

exchange traded funds that seek to track the performance of a market
index (``Underlying ETFs'') (including Underlying ETFs managed by the
Adviser); exchange traded commodity trusts; and exchange traded notes
(``ETNs'').\8\
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    \7\ The term ``under normal circumstances'' includes, but is not
limited to, the absence of extreme volatility or trading halts in
the equity 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\ For each of the Funds, ETPs include Investment Company Units
(as described in NYSE Arca Equities Rule 5.2(j)(3)); Index-Linked
Securities (as described in NYSE Arca Equities Rule 5.2(j)(6));
Portfolio Depositary Receipts (as described in NYSE Arca Equities
Rule 8.100); Trust Issued Receipts (as described in NYSE Arca
Equities Rule 8.200); Commodity-Based Trust Shares (as described in
NYSE Arca Equities Rule 8.201); Currency Trust Shares (as described
in NYSE Arca Equities Rule 8.202); Commodity Index Trust Shares (as
described in NYSE Arca Equities Rule 8.203); Trust Units (as
described in NYSE Arca Equities Rule 8.500); Managed Fund Shares (as
described in NYSE Arca Equities Rule 8.600), and closed-end funds.
The ETPs all will be listed and traded in the U.S. on registered
exchanges.
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SPDR SSgA Income Allocation ETF
    The SPDR SSgA Income Allocation ETF will seek to provide a total
return by focusing on investments in income and yield-generating
assets. The Fund will invest substantially all of its assets in the
SSgA Income Portfolio (``Income Portfolio''), a separate series of the
SSgA Master Trust with an identical investment objective as the Fund.
As a result, the Fund will invest indirectly through the Income
Portfolio. The Adviser will invest the assets of the Income Portfolio
among ETPs that provide exposure to four primary asset classes: (i)
Equity, domestic and international securities; (ii) investment grade
and high yield debt securities; (iii) hybrid equity/debt (such as
preferred stock and convertible securities); and (iv) REITs. The Income
Portfolio's allocation among those asset classes will be in proportions
consistent with the Adviser's evaluation of the expected returns and
risks of each asset class as well as the allocation that, in the
Adviser's view, will best meet the Income Portfolio's investment
objective. The allocations to each asset class will change over time as
the Adviser's expectations of each asset class shift. The Income
Portfolio's indirect holdings by virtue of investing in ETPs
representing these asset classes will consist of a diversified mix of
domestic and international equity securities, investment grade and high
yield government and corporate bonds, hybrid securities such as
preferred stock and convertible securities, Build America Bonds,
commodities, and REITs.
SPDR SSgA Conservative Global Allocation ETF
    The SPDR SSgA Conservative Global Allocation ETF will seek to
provide current income, capital preservation and the avoidance of
excessive portfolio volatility. The Fund will invest substantially all
of its assets in the SSgA Conservative Global Allocation Portfolio
(``Conservative Allocation Portfolio''), a separate series of the SSgA
Master Trust with an identical investment objective as the Fund. As a
result, the Fund will invest indirectly through the Conservative
Allocation Portfolio. The Adviser will invest the assets of the
Conservative Allocation Portfolio among ETPs that provide exposure to
domestic and international debt and equity securities with a larger
allocation to debt securities than to other asset classes. The
Conservative Allocation Portfolio \9\ has a higher allocation to fixed
income securities than to equity securities. These fixed income
securities tend to be less volatile than traditional equity securities.
The Conservative Allocation Portfolio typically will allocate
approximately 60% of its assets to debt related securities, though this
percentage can vary based on the Adviser's tactical decisions. The
allocations to each asset class will change over time as the Adviser's
expectations of each asset class shift. The Conservative Allocation
Portfolio's indirect holdings by virtue of investing in ETPs
representing these asset classes will consist of a diversified mix of
domestic and international, including emerging markets, equity
securities across all market capitalizations, investment grade and high
yield government and corporate bonds, inflation protected securities,
mortgage pass through securities, commercial mortgage backed
securities, asset backed securities, commodities and REITs.
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    \9\ Email from Timothy J. Malinowski, Senior Director, NYSE
Euronext, to Edward Y. Cho, Special Counsel, Division of Trading and
Markets, Commission, dated November 18, 2011.
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SPDR SSgA Global Allocation ETF
    The SPDR SSgA Global Allocation ETF will seek to provide current
income and capital preservation, with a secondary emphasis on capital
appreciation. The Fund will invest substantially all of its assets in
the SSgA Global Allocation Portfolio (``Global Allocation Portfolio''),
a separate series of the SSgA Master Trust with an identical investment
objective as the Fund. As a result, the Fund will invest indirectly
through the Global Allocation Portfolio. The Adviser will invest the
assets of the Global Allocation Portfolio among ETPs that provide
balanced exposure to domestic and international debt and equity
securities. The Global Allocation Portfolio typically will allocate
approximately 60% of its assets to equity securities, though this
percentage can vary based on the Adviser's tactical decisions. The
allocations to each asset class will change over time as the Adviser's
expectations of each asset class shift. The Global Allocation
Portfolio's indirect holdings by virtue of investing in ETPs
representing these asset classes will consist of a diversified mix of
domestic and international, including emerging market, equity
securities across all market capitalizations, investment grade and high
yield government and corporate bonds, inflation protected securities,
mortgage pass through securities, commercial mortgage backed
securities, asset backed securities, commodities and REITs.
SPDR SSgA Aggressive Global Allocation ETF
    The SPDR SSgA Aggressive Global Allocation ETF will seek to provide
capital appreciation, with a secondary emphasis on current income. The
Fund will invest substantially all of its assets in the SSgA Aggressive
Global Allocation Portfolio (``Aggressive Allocation Portfolio'' and,
together with the Real Assets Portfolio, Income Portfolio, Conservative
Allocation Portfolio, and Global Allocation Portfolio, collectively,
``Portfolios''), a separate series of the SSgA Master Trust with an
identical investment objective as the Fund. As a result, the Fund will
invest indirectly through the Aggressive Allocation Portfolio. The
Adviser will invest the assets of the Aggressive Allocation Portfolio
among ETPs that provide exposure to domestic and international debt and
equity securities with a larger allocation to equity securities than
the other asset classes. The Aggressive Allocation Portfolio will have
a higher allocation to equity securities than to fixed income
securities. These equity securities will tend to be more volatile than
traditional equity securities. The Aggressive Allocation Portfolio
typically will allocate approximately 80% or more of its assets to
equity securities, though this percentage can vary based on the
Adviser's tactical decisions. The Aggressive Allocation Portfolio's
indirect holdings by virtue of investing in ETPs representing these
asset classes will consist of a diversified mix of domestic and
international, including emerging market, equity securities across all
market capitalizations, investment grade and high yield

government and corporate bonds, inflation protected securities,
mortgage pass through securities, commercial mortgage backed
securities, asset backed securities, government and corporate bonds,
commodities and REITs.
Master Feeder Structure of the Funds
    The Funds are intended to be managed in a ``master-feeder''
structure, under which each Fund will invest substantially all of its
assets in a corresponding ``master fund,'' which is a separate mutual
fund that has an identical investment objective. As a result, each Fund
(i.e., a ``feeder fund'') will have an indirect interest in all of the
securities owned by each corresponding master fund.\10\ Because of this
indirect interest, each Fund's investment returns should be the same as
those of the corresponding master fund, adjusted for the expenses of
the feeder fund. In extraordinary instances, each Fund reserves the
right to make direct investments in securities.
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    \10\ Each master fund is registered under the 1940 Act.
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    The Adviser will manage the investments of each respective
Portfolio. Under the master-feeder arrangement, investment advisory
fees charged at the master-fund level are deducted from the advisory
fees charged at the feeder-fund level. This arrangement avoids a
``layering'' of fees, e.g., a Fund's total annual operating expenses
would be no higher as a result of investing in a master-feeder
arrangement than they would be if the Fund pursued its investment
objectives directly. In addition, each Fund may discontinue investing
through the master-feeder arrangement and pursue its investment
objectives directly if the Fund's Board of Trustees determines that
doing so would be in the best interests of shareholders.
    Each Fund is classified as a ``diversified'' investment company
under the 1940 Act.\11\
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    \11\ The diversification standard is set forth in Section
5(b)(1) of the 1940 Act.
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    The Funds, other than the SPDR SSgA Real Assets ETF, will not
concentrate their investments in any particular industry or sector. The
SPDR SSgA Real Assets ETF will concentrate its investments (i.e.,
invest more than 25% of its assets) in companies primarily involved in
the energy and real estate industries.\12\
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    \12\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
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    The Funds intend to qualify for and to elect treatment as a
separate regulated investment company (``RIC'') under Subchapter M of
the Internal Revenue Code.\13\ As such, each Fund should not be subject
to Federal income tax on its net investment income and capital gains,
if any, to the extent that it timely distributes such income and
capital gains to its shareholders. In order to be taxable as a RIC, a
Fund must distribute annually to its shareholders at least 90% of its
net investment income (generally net investment income plus the excess
of net short-term capital gains over net long-term capital losses) and
at least 90% of its net tax exempt interest income, for each tax year,
if any, to its shareholders (``Distribution Requirement'') and also
must meet several additional requirements. Among these requirements are
the following: (i) At least 90% of the Fund's gross income each taxable
year must be derived from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, or other income derived with respect
to its business of investing in such stock, securities or currencies,
and net income derived from an interest in qualified publicly traded
partnerships; (ii) at the end of each fiscal quarter of the Fund's
taxable year, at least 50% of the market value of its total assets must
be represented by cash and cash items, U.S. government securities,
securities of other RICs and other securities, with such other
securities limited, in respect to any one issuer, to an amount not
greater than 5% of the value of the Fund's total assets or more than
10% of the outstanding voting securities of such issuer, and (iii) at
the end of each fiscal quarter of the Fund's taxable year, not more
than 25% of the value of its total assets is invested in the securities
(other than U.S. government securities or securities of other RICs) of
any one issuer or the securities of two or more issuers engaged in the
same, similar, or related trades or businesses if the Fund owns at
least 20% of the voting power of such issuers, or the securities of one
or more qualified publicly traded partnerships.
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    \13\ 26 U.S.C. 851 et seq.
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Other Investments
    While each Fund will invest substantially all of its assets in its
respective Portfolio, each Fund may directly invest in certain other
investments, as described below.
    Each Fund may (either directly or through its investments in its
corresponding Portfolio) invest in the following types of investments:
money market instruments, such as repurchase agreements, money market
funds (including money market funds managed by the Adviser); variable
rate demand notes, U.S. government and U.S. government agency
securities; loan focused closed-end funds; and collateralized loan
obligation debt securities.
    Each Fund may invest in preferred securities and in convertible
securities. Convertible securities are bonds, debentures, notes,
preferred stocks or other securities that may be converted or exchanged
(by the holder or by the issuer) into shares of the underlying common
stock (or cash or securities of equivalent value) at a stated exchange
ratio. A convertible security may also be called for redemption or
conversion by the issuer after a particular date and under certain
circumstances (including a specified price) established upon issue. If
a convertible security held by a Fund is called for redemption or
conversion, the Fund could be required to tender it for redemption,
convert it into the underlying common stock, or sell it to a third
party.
    Each Fund may invest in bonds, including corporate bonds; high
yield debt securities; sovereign debt; \14\ and U.S. Government
obligations.\15\
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    \14\ Sovereign debt obligations are issued or guaranteed by
foreign governments or their agencies. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Governmental entities
responsible for repayment of the debt may be unable or unwilling to
repay principal and pay interest when due, and may require
renegotiation or reschedule of debt payments. In addition, prospects
for repayment of principal and payment of interest may depend on
political as well as economic factors. Although some sovereign debt,
such as Brady Bonds, is collateralized by U.S. Government
securities, repayment of principal and payment of interest is not
guaranteed by the U.S. Government.
    \15\ U.S. Government obligations are a type of bond and include
securities issued or guaranteed as to principal and interest by the
U.S. Government, its agencies or instrumentalities.
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    Each Fund may invest in Variable Rate Demand Obligations
(``VRDOs''). VRDOs are short-term tax exempt fixed income instruments
whose yield is reset on a periodic basis. VRDO securities tend to be
issued with long maturities of up to 30 or 40 years; however, they are
considered short-term instruments because they include a put feature
which coincides with the periodic yield reset. For example, a VRDO
whose yield resets weekly will have a put feature that is exercisable
upon seven days notice. VRDOs are put back to a bank or other entity
that serves as a liquidity provider, who then tries to resell the VRDOs
or, if unable to resell, holds them in its own inventory. VRDOs are
generally supported by either a Letter of

Credit or a Stand-by Bond Purchase Agreement to provide credit
enhancement.
    The Funds may invest in inflation-protected public obligations,
commonly known as ``TIPS,'' of the U.S. Treasury, as well as TIPS of
major governments and emerging market countries, excluding the United
States. TIPS are a type of security issued by a government that are
designed to provide inflation protection to investors.
    The Funds may conduct foreign currency transactions on a spot
(i.e., cash) or forward basis (i.e., by entering into forward contracts
to purchase or sell foreign currencies).
    Each Fund may invest in repurchase agreements with commercial
banks, brokers or dealers to generate income from its excess cash
balances and to invest securities lending cash collateral. A repurchase
agreement is an agreement under which a Fund acquires a financial
instrument (e.g., a security issued by the U.S. government or an agency
thereof, a banker's acceptance or a certificate of deposit) from a
seller, subject to resale to the seller at an agreed upon price and
date (normally, the next business day). A repurchase agreement may be
considered a loan collateralized by securities.
    Each Fund may enter into reverse repurchase agreements, which
involve the sale of securities with an agreement to repurchase the
securities at an agreed-upon price, date and interest payment and have
the characteristics of borrowing.
    Each Fund may invest in commercial paper. Commercial paper consists
of short-term, promissory notes issued by banks, corporations and other
entities to finance short-term credit needs. These securities generally
are discounted but sometimes may be interest bearing.
    In addition to repurchase agreements, each Fund may invest in
short-term instruments, including money market instruments, (including
money market funds advised by the Adviser), repurchase agreements, cash
and cash equivalents, on an ongoing basis to provide liquidity or for
other reasons.
    In certain situations or market conditions, a Fund may (either
directly or through the corresponding Portfolio) temporarily depart
from its normal investment policies and strategies provided that the
alternative is consistent with the Fund's investment objective and is
in the best interest of the Fund.\16\ For example, a Fund may hold a
higher than normal proportion of its assets in cash in times of extreme
market stress. Each Fund may (either directly or through its
investments in its corresponding Portfolio) borrow money from a bank as
permitted by the 1940 Act or other governing statute, by applicable
rules thereunder, or by Commission or other regulatory agency with
authority over the Fund, but only for temporary or emergency purposes.
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    \16\ Such situations and conditions include, but are not limited
to, trading halts in the equities or fixed income markets or
disruptions in the financial markets generally; operational issues
causing dissemination of inaccurate market information; or force
majeure type events such as systems failure, natural or man-made
disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption or any similar intervening circumstance.
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    In addition to ETPs, each Fund may invest in the securities of
other investment companies, including money market funds, subject to
applicable limitations under Section 12(d)(1) of the 1940 Act. A Fund
may also invest in the securities of other investment companies if such
securities are the only investment securities held by the Fund, such as
through a master-feeder arrangement. Each Fund will pursue its
respective investment objective through such an arrangement. To the
extent allowed by law, regulation, each Fund's investment restrictions
and the Trust's exemptive relief under the 1940 Act, a Fund may invest
its assets in securities of investment companies that are money market
funds, including those advised by the Adviser or otherwise affiliated
with the Adviser, in excess of the limits discussed above.
    The Funds may purchase U.S. exchange listed common stocks and
preferred securities of foreign corporations, as well as U.S.
registered, dollar-denominated bonds of foreign corporations,
governments, agencies and supra-national entities.
    A Fund's investments in common stock of foreign corporations may
also be in the form of American Depositary Receipts (``ADRs''), Global
Depositary Receipts (``GDRs'') and European Depositary Receipts
(``EDRs'') (collectively ``Depositary Receipts''). \17\ Depositary
Receipts are receipts, typically issued by a bank or trust company,
which evidence ownership of underlying securities issued by a foreign
corporation. For ADRs, the depository is typically a U.S. financial
institution and the underlying securities are issued by a foreign
issuer. For other Depositary Receipts, the depository may be a foreign
or a U.S. entity, and the underlying securities may have a foreign or a
U.S. issuer. Depositary Receipts will not necessarily be denominated in
the same currency as their underlying securities. Generally, ADRs, in
registered form, are designed for use in the U.S. securities market,
and EDRs, in bearer form, are designated for use in European securities
markets. GDRs are tradable both in the United States and in Europe and
are designed for use throughout the world. Each Fund may invest up to
10% of its assets in unsponsored Depositary Receipts. The issuers of
unsponsored Depositary Receipts are not obligated to disclose material
information in the United States, and, therefore, there may be less
information available regarding such issuers and there may not be a
correlation between such information and the market value of the
Depositary Receipts.
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    \17\ The foreign equity securities in which the Funds may invest
will be limited to securities that trade in markets that are members
of the Intermarket Surveillance Group (``ISG''), which includes all
U.S. national securities exchanges and certain foreign exchanges, or
are parties to a comprehensive surveillance sharing agreement with
the Exchange. See note 27, infra.
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    Each Fund may invest in the aggregate up to 15% of its net assets
(taken at the time of investment) in: (1) Illiquid securities, (2) Rule
144A securities, and (3) loan participation interests. An illiquid
asset is any asset which may not be sold or disposed of in the ordinary
course of business within seven days at approximately the value at
which a Fund has valued the investment.\18\
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    \18\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14617 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the ETF. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the Securities Act of 1933).
---------------------------------------------------------------------------

    In accordance with the Exemptive Order, the Funds will not invest
in options, futures or swaps. Each Fund's investments will be
consistent with its respective investment objective and will not be
used to enhance leverage.
    Except for ETPs that may hold non-U.S. issues and Depositary
Receipts,\19\ the Funds will not otherwise invest in non-U.S.-
registered issues.
---------------------------------------------------------------------------

    \19\ See note 17, supra, and note 27, infra.
---------------------------------------------------------------------------

Creations and Redemptions
    Each Fund will issue and redeem Shares only in Creation Units at
the net asset value (``NAV'') next determined

after receipt of an order on a continuous basis every day except
weekends and specified holidays. The NAV of a Fund will be determined
once each business day, normally 4 p.m. Eastern Time. Creation Unit
sizes will be 50,000 Shares per Creation Unit. The Trust will issue and
sell Shares of each Fund only in Creation Units on a continuous basis,
without a sales load (but subject to transaction fees), at their NAV
per Share next determined after receipt of an order, on any business
day, in proper form pursuant to the terms of the authorized participant
agreement (``Participant Agreement'').
    The consideration for purchase of a Creation Unit of each Fund
generally will consist of either (i) The in-kind deposit of a
designated portfolio of securities held by the corresponding master
fund (``Deposit Securities'') per each Creation Unit and the Cash
Component (defined below), computed as described below or (ii) the cash
value of the Deposit Securities (``Deposit Cash'') and the ``Cash
Component,'' computed as described below. When accepting purchases of
Creation Units for cash, a Fund may incur additional costs associated
with the acquisition of Deposit Securities that would otherwise be
provided by an in-kind purchaser. Together, the Deposit Securities or
Deposit Cash, as applicable, and the Cash Component constitute the
``Fund Deposit,'' which represents the minimum initial and subsequent
investment amount for a Creation Unit of any Fund. The ``Cash
Component'' is an amount equal to the difference between the NAV of the
Shares (per Creation Unit) and the market value of the Deposit
Securities or Deposit Cash, as applicable. If the Cash Component is a
positive number (i.e., the NAV per Creation Unit exceeds the market
value of the Deposit Securities or Deposit Cash, as applicable), the
Cash Component shall be such positive amount. If the Cash Component is
a negative number (i.e., the NAV per Creation Unit is less than the
market value of the Deposit Securities or Deposit Cash, as applicable),
the Cash Component will be such negative amount and the creator will be
entitled to receive cash in an amount equal to the Cash Component. The
Cash Component serves the function of compensating for any differences
between the NAV per Creation Unit and the market value of the Deposit
Securities or Deposit Cash, as applicable.
    The Custodian, through the National Securities Clearing Corporation
(``NSCC''), will make available on each business day, immediately prior
to the opening of business on the Exchange's Core Trading Session (9:30
a.m., Eastern Time), the list of the names and the required number of
shares of each Deposit Security or the required amount of Deposit Cash,
as applicable, to be included in the current Fund Deposit (based on
information at the end of the previous business day) for a Fund. Such
Fund Deposit is subject to any applicable adjustments as described in
the Registration Statement, in order to effect purchases of Creation
Units of a Fund until such time as the next-announced composition of
the Deposit Securities or the required amount of Deposit Cash, as
applicable, is made available.
    Shares may be redeemed only in Creation Units at their NAV next
determined after receipt of a redemption request in proper form by a
Fund through the Transfer Agent and only on a business day.
    With respect to each Fund, the Custodian, through the NSCC, will
make available immediately prior to the opening of business on the
Exchange (9:30 a.m. Eastern Time) on each business day, the list of the
names and share quantities of each Fund's portfolio securities that
will be applicable (subject to possible amendment or correction) to
redemption requests received in proper form (as defined below) on that
day (``Fund Securities''). Fund Securities received on redemption may
not be identical to Deposit Securities.
    Redemption proceeds for a Creation Unit will be paid either in-kind
or in cash or a combination thereof, as determined by the Trust. With
respect to in-kind redemptions of a Fund, redemption proceeds for a
Creation Unit will consist of Fund Securities as announced by the
Custodian on the business day of the request for redemption received in
proper form plus cash in an amount equal to the difference between the
NAV of the Shares being redeemed, as next determined after a receipt of
a request in proper form, and the value of the Fund Securities (``Cash
Redemption Amount''), less a fixed redemption transaction fee and any
applicable additional variable charge as set forth in the Registration
Statement. In the event that the Fund Securities have a value greater
than the NAV of the Shares, a compensating cash payment equal to the
differential will be required to be made by or through an authorized
participant by the redeeming shareholder. Notwithstanding the
foregoing, at the Trust's discretion, an authorized participant may
receive the corresponding cash value of the securities in lieu of the
in-kind securities value representing one or more Fund Securities.
    The creation/redemption order cut-off time for Funds is expected to
be 4 p.m. Eastern Time for purchases of Shares. On days when the
Exchange closes earlier than normal, a Fund may require orders for
Creation Units to be placed earlier in the day.
Net Asset Value
    The NAV per Share for each Fund of the Trust will be computed by
dividing the value of the net assets of such Fund (i.e., the value of
its total assets less total liabilities) by the total number of Shares
outstanding, rounded to the nearest cent. Expenses and fees, including
the management fees, are accrued daily and taken into account for
purposes of determining NAV. The NAV of a Fund will be calculated by
the Custodian and determined at the close of the regular trading
session on the New York Stock Exchange (ordinarily 4 p.m. Eastern Time)
on each day that such exchange is open, provided that fixed-income
assets (and, accordingly, a Fund's NAV) may be valued as of the
announced closing time for trading in fixed-income instruments on any
day that the Securities Industry and Financial Markets Association (or
the applicable exchange or market on which a Fund's investments are
traded) announces an early closing time. Creation/redemption order cut-
off times may also be earlier on such days, but in any event earlier
than the NAV calculation time.
    In calculating a Fund's NAV per Share, such Fund's investments will
generally be valued using market valuations. A market valuation
generally means a valuation (i) Obtained from an exchange, a pricing
service, or a major market maker (or dealer), (ii) based on a price
quotation or other equivalent indication of value supplied by an
exchange, a pricing service, or a major market maker (or dealer) or
(iii) based on amortized cost. In the case of shares of other funds
that are not traded on an exchange, a market valuation means such
fund's published NAV per share. The Adviser may use various pricing
services, or discontinue the use of any pricing service, as approved by
the Funds' Board of Directors from time to time. A price obtained from
a pricing service based on such pricing service's valuation matrix may
be considered a market valuation. Any assets or liabilities denominated
in currencies other than the U.S. dollar will be converted into U.S.
dollars at the current market rates on the date of valuation as quoted
by one or more sources.

    In the event that current market valuations are not readily
available or such valuations do not reflect current market value, the
Trust's procedures require the Trust's Pricing and Investment Committee
to determine a security's fair value if a market price is not readily
available.\20\ In determining such value the Pricing and Investment
Committee may consider, among other things, (i) Price comparisons among
multiple sources, (ii) a review of corporate actions and news events,
and (iii) a review of relevant financial indicators (e.g., movement in
interest rates, and market indices). In these cases, the applicable
Fund's NAV may reflect certain portfolio securities' fair values rather
than their market prices. Fair value pricing involves subjective
judgments and it is possible that the fair value determination for a
security is materially different than the value that could be realized
upon the sale of the security.
---------------------------------------------------------------------------

    \20\ The Trust's Pricing and Investment Committee has
implemented procedures designed to prevent the use and dissemination
of material, non-public information regarding the Portfolios and the
Funds.
---------------------------------------------------------------------------

    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents
that, for initial and/or continued listing, the Funds will be in
compliance with Rule 10A-3 under the Exchange Act,\21\ as provided by
NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares for each Fund
will be outstanding at the commencement of trading on the Exchange. The
Exchange will obtain a representation from the issuer of the Shares
that the NAV per Share will be calculated daily and that the NAV and
the Disclosed Portfolio will be made available to all market
participants at the same time.
---------------------------------------------------------------------------

    \21\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Availability of Information
    The Funds' Web site (http://www.spdrs.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Funds that may be downloaded. The Funds' Web
site will include additional quantitative information updated on a
daily basis, including, for the Funds, (1) Daily trading volume, the
prior business day's reported closing price, NAV and mid-point of the
bid/ask spread at the time of calculation of such NAV (``Bid/Ask
Price''),\22\ and a calculation of the premium and discount of the Bid/
Ask Price against the NAV, and (2) data in chart format displaying the
frequency distribution of discounts and premiums of the daily Bid/Ask
Price against the NAV, within appropriate ranges, for each of the four
previous calendar quarters. On each business day, before commencement
of trading in Shares in the Core Trading Session on the Exchange, the
Funds will disclose on their Web site the Disclosed Portfolio as
defined in NYSE Arca Equities Rule 8.600(c)(2) that will form the basis
for the Funds' calculation of NAV at the end of the business day.\23\
---------------------------------------------------------------------------

    \22\ The Bid/Ask Price of the Funds is determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Funds' NAV. The records relating
to Bid/Ask Prices will be retained by the Funds and their service
providers.
    \23\ Under accounting procedures followed by the Funds, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Funds
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Adviser will disclose for each portfolio
security or other financial instrument of the Funds and of the
Portfolios the following information on the Funds' Web site: Ticker
symbol (if applicable), name of security or financial instrument,
number of shares or dollar value of financial instruments held in the
portfolio, and percentage weighting of the security or financial
instrument in the portfolio. The Web site information will be publicly
available at no charge.
    In addition, a basket composition file, which includes the security
names and share quantities required to be delivered in exchange for a
Fund's Shares, together with estimates and actual cash components, will
be publicly disseminated daily prior to the opening of the NYSE via
NSCC. The basket represents one Creation Unit of each Fund.
    Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Funds' Shareholder Reports, and the Trust's
Form N-CSR and Form N-SAR, filed twice a year. The Trust's SAI and
Shareholder Reports are available free upon request from the Trust, and
those documents and the Form N-CSR and Form N-SAR may be viewed on-
screen or downloaded from the Commission's Web site at http://www.sec.gov. Information regarding market price and trading volume of
the Shares will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services. Information regarding the previous day's closing price and
trading volume information for the Shares will be published daily in
the financial section of newspapers. Quotation and last sale
information for the Shares will be available via the Consolidated Tape
Association (``CTA'') high-speed line and, for the ETPs, will be
available from the national securities exchange on which they are
listed. In addition, the Indicative Optimized Portfolio Value
(``IOPV''),\24\ which is the Portfolio Indicative Value as defined in
NYSE Arca Equities Rule 8.600 (c)(3), will be widely disseminated at
least every 15 seconds during the Core Trading Session by one or more
major market data vendors.\25\ The dissemination of the Portfolio
Indicative Value, together with the Disclosed Portfolio, will allow
investors to determine the value of the underlying portfolio of the
Funds and of the Portfolios on a daily basis and to provide a close
estimate of that value throughout the trading day. The intra-day,
closing and settlement prices of the portfolio securities are also
readily available from the national securities exchanges trading such
securities, automated quotation systems, published or other public
sources, or on-line information services such as Bloomberg or Reuters.
---------------------------------------------------------------------------

    \24\ The IOPV calculations will be estimates of the value of the
Funds' NAV per Share using market data converted into U.S. dollars
at the current currency rates. The IOPV price will be based on
quotes and closing prices from the securities' local market and may
not reflect events that occur subsequent to the local market's
close. Premiums and discounts between the IOPV and the market price
may occur. This should not be viewed as a ``real-time'' update of
the NAV per Share of the Funds, which will be calculated only once a
day.
    \25\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Portfolio Indicative Values published on CTA or other data feeds.
---------------------------------------------------------------------------

    Additional information regarding the Trust and the Shares,
including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings disclosure policies, distributions
and taxes is included in the Registration Statement. All terms relating
to the Funds that are referred to, but not defined in, this proposed
rule change are defined in the Registration Statement.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Funds.\26\ Trading in Shares of the Funds
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. 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 the Funds; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. Trading in the Shares will be
subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth
circumstances under which Shares of the Funds may be halted.
---------------------------------------------------------------------------

    \26\ See NYSE Arca Equities Rule 7.12, Commentary .04.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern Time in
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late
Trading Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price
variation (``MPV'') for quoting and entry of orders in equity
securities traded on the NYSE Arca Marketplace is $0.01, with the
exception of securities that are priced less than $1.00 for which the
MPV for order entry is $0.0001.
Surveillance
    The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products (which include Managed
Fund Shares) to monitor trading in the Shares. 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 applicable Federal securities laws.
    The Exchange's current trading surveillance focuses on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations.
    The Exchange may obtain information via the ISG from other
exchanges that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement.\27\ In addition,
the Exchange could obtain information from the U.S. exchanges on which
the ETPs are listed and traded.
---------------------------------------------------------------------------

    \27\ For a list of the current members of ISG, see http://www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for the Funds may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Bulletin
    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: (1) The procedures for purchases and redemptions of Shares
in Creation Unit Aggregations (and that Shares are not individually
redeemable); (2) 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; (3) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated Portfolio Indicative Value will not be
calculated or publicly disseminated; (4) how information regarding the
Portfolio Indicative Value is disseminated; (5) 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 (6) trading information.
    In addition, the Bulletin will reference that the Funds are subject
to various fees and expenses described in the Registration Statement.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Exchange Act.
The Bulletin will also disclose that the NAV for the Shares will be
calculated after 4 p.m. Eastern Time each trading day.
2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is
the requirement under Section 6(b)(5) \28\ that an exchange have rules
that are 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, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. 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. The Adviser has implemented a
``fire wall'' with respect to its affiliated broker-dealer regarding
access to information concerning the composition and/or changes to the
Funds' portfolios. In addition, the Trust's Pricing and Investment
Committee has implemented procedures designed to prevent the use and
dissemination of material, non-public information regarding the
Portfolios and the Funds. The Exchange may obtain information via ISG
from other exchanges that are members of ISG or with which the Exchange
has entered into a comprehensive surveillance sharing agreement. The
ETPs held by the Funds will be traded on U.S. national securities
exchanges and will be subject to the rules of such exchanges, as
approved by the Commission. Except for ETPs that may hold non-U.S.
issues, the Funds will not otherwise invest in non-U.S.-registered
issues.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information is publicly available regarding the Funds and the Shares,
thereby promoting market transparency. The Funds' portfolio holdings
will be disclosed on their Web site daily after the close of trading on
the Exchange and prior to the opening of trading on the Exchange the
following day. Moreover, the IOPV will be widely disseminated by one or
more major market data vendors at least every 15 seconds during the
Exchange's Core Trading Session. On each business day, before
commencement of trading in Shares in the Core Trading Session on the
Exchange, the Funds will disclose on their Web site the Disclosed
Portfolio that will form the basis for the Funds' calculation of NAV at
the end of the business day. Information regarding market price and
trading volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other
electronic services, and quotation and last sale information will be
available via the CTA high-speed line. The Web

site for the Funds will include a form of the prospectus for the Funds
and additional data relating to NAV and other applicable quantitative
information. Moreover, prior to the commencement of trading, the
Exchange will inform its ETP Holders in an Information Bulletin of the
special characteristics and risks associated with trading the Shares.
Trading in Shares of the Funds will be halted if the circuit breaker
parameters in NYSE Arca Equities Rule 7.12 have been reached or because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable, and trading in the Shares will
be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth
circumstances under which Shares of the Funds may be halted. In
addition, as noted above, investors will have ready access to
information regarding the Funds' holdings, the IOPV, the Disclosed
Portfolio, and quotation and last sale information for the Shares.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
additional types of actively-managed exchange-traded products that will
enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, as noted above, investors
will have ready access to information regarding the Funds' holdings,
the IOPV, the Disclosed Portfolio, and quotation and last sale
information for the Shares.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2011-85 on the subject line.

Paper Comments

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

    All submissions should refer to File Number SR-NYSEArca-2011-85.
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 a.m. and 3 p.m. Copies of the filing will also 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 No. SR-
NYSEArca-2011-85 and should be submitted on or before December 28,
2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31335 Filed 12-6-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 165 (Monday, August 28, 2023)]
[Notices]
[Pages 58625-58627]
[FR Doc No: 2023-18430]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98197; File No. SR-NYSEAMER-2023-41]

Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Modify Rule
928NYP

August 22, 2023.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on August 17, 2023, NYSE American LLC (``NYSE American'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to modify Rule 928NYP (Pre-Trade and
Activity-Based Risk Controls) to allow certain order types to be
excluded from the Activity-Based Risk Controls. The proposed rule
change is available on the Exchange's website at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to modify Rule 928NYP (Pre-Trade and
Activity-Based Risk Controls) to allow certain order types to be
excluded from the Activity-Based Risk Controls.\4\ Specifically, the
Exchange proposes to allow ATP Holders \5\ the ability to exclude
orders marked as GTX \6\ from counting towards the limits established
by the Activity-Based Risk Controls and to exclude GTX orders from
cancellation when an Activity-Based Risk Limit is breached.\7\ The
Exchange notes that a substantively similar change was recently adopted
on its affiliated exchange, NYSE Arca, Inc. (``NYSE Arca'') and
therefore this proposal raises no new or novel issues not previously
considered by the Commission.\8\
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    \4\ The Exchange notes that this proposed change modifies a
Pillar rule (i.e., with a ``P'' modifier) that has not yet been
implemented. The Exchange anticipates migrating to its Pillar
trading platform beginning on October 23, 2023. As is the case with
all Pillar rules, this proposed rule change (as well as the entire
Rule 928NYP) will not be implemented until all other Pillar-related
rule filings are approved or operative, as applicable, and the
Exchange announces the migration of underlying symbols to Pillar by
Trader Update.
    \5\ An ATP Holder is a natural person, sole proprietorship,
partnership, corporation, limited liability company or other
organization, in good standing, which has been issued an ATP, and
references to ``member'', and ``member organization'' as those terms
are used in the Rules of the Exchange should be deemed to be
references to ATP Holders. See Rule 900.2NY. An ATP is an American
Trading Permit issued by the Exchange for effecting approved
securities transactions on the Exchange's Trading Facilities. See
id. The Exchange notes that an ATP may be acting as a Specialist,
which market participant is subject to heightened requirements. See,
e.g., Rule 925.1NYP(b), (c).
    \6\ See infra note 17 (for description of orders marked as GTX).
    \7\ See proposed Rules 928NYP(c)(2)(B) and (c)(2)(C)(iii).
    \8\ See Securities Exchange Act Release No. 98038 (August 1,
2023), 88 FR 52231 (Augst 7, 2023) (SR-NYSEARCA-2023-49)
(immediately effective rule change to allow market participants to
exclude orders marked as GTX from the Activity-Based Risk Controls,
per Rule 6.40P-O).
---------------------------------------------------------------------------

    The Exchange offers ATP Holders the option of utilizing Activity-
Based Risk Controls to assist ATP Holders in managing risk related to
submitting orders during periods of increased and significant trading
activity.\9\ ATP

Holders acting as Specialist must apply one of the Activity-Based Risk
Controls to all of its orders and quotes, whereas an ATP Holder not
acting as a Specialist may, but is not required to, apply one of the
Activity-Based Risk Controls to its orders.\10\ To determine when an
Activity-Based Risk Control has been breached, the Exchange will
maintain a Trade Counter that will be incremented every time an order
(or quote) trades, including any leg of a Complex Order, and will
aggregate the number of contracts traded during each such
execution.\11\ When designating one of the three Activity-Based Risk
Controls, an ATP Holder must indicate the action that it would like the
Exchange to take if an Activity-Based Risk Limit is exceeded.\12\
Currently, the Exchange affords ATP Holders the ability to exclude
certain orders from being considered by a Trade Counter.\13\ The order
types that an ATP Holder may opt to exclude are orders designated as
IOC or FOK, which order types are designed to cancel if not executed on
arrival.\14\ In addition, the Exchange exempts certain orders from
being cancelled or blocked--specifically Auction-Only orders (submitted
solely for the purpose of being executed in an opening auction) and GTC
Orders, which by their terms are meant to eventually execute unless
specifically cancelled by the order-sender.\15\
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    \9\ See Rule 928NYP(a)(3)(A)-(C) (describing the three potential
Activity-Based Risk Controls: Transaction-Based Risk Limit; Volume-
Based Risk Limit; and Percentage-Based Risk Limit).
    \10\ See Rule 928NYP(c)(2)(A).
    \11\ See Rule 928NYP(c)(2)(B).
    \12\ See Rule 928NYP(c)(2)(C) (describing the potential
automated breach actions of Notification Only, Block Only, and
Cancel and Block).
    \13\ See Rule 928NYP(c)(2)(B).
    \14\ See id. See also Rule 900.3NYP(b)(2) (IOC) and (3) (FOK).
    \15\ See Rule 928NYP(c)(2)(C)(iii).
---------------------------------------------------------------------------

    The Exchange proposes to modify Rule 928NYP(c)(2)(B) to add GTX to
the order types that may be excluded by Trade Counters in tracking
Activity-Based Risk Controls.\16\ In addition, for ATP Holders that
select the automated breach action of ``Cancel and Block,'' the
Exchange proposes to modify Rule 928NYP(c)(2)(C)(iii) to provide ATP
Holders the option of instructing the Exchange not to cancel unexecuted
GTX orders in the event of a breach.\17\
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    \16\ See proposed Rule 928NYP(c)(2)(B) (providing, in relevant
part, that an ATP Holder ``may opt to exclude any orders designated
IOC, FOK, or GTX from being considered by a Trade Counter.'')
    \17\ See proposed Rule 928NYP(c)(2)(C)(iii) (providing, in
relevant part, that an ATP Holder ``may opt to exclude orders
designated as GTX from being cancelled.'').
---------------------------------------------------------------------------

    An order marked GTX, such as a GTX order submitted in response to a
CUBE Order (``CUBE GTX'') or a COA GTX Order submitted in response to a
Complex Order Auction (or COA), will cancel after executing to the
extent possible with a CUBE Order, or a COA Order in a Complex Order
Auction, as applicable (collectively, ``GTX orders'').\18\ As such, GTX
orders are never ranked (as resting interest) in the Consolidated Book.
Because GTX orders are submitted for the sole purposes of executing (to
the extent possible) with either a CUBE Order or a COA Order before
cancelling, the Exchange believes providing ATP Holders the option of
exempting these orders from the Activity-Based Risk Controls would
enable these ATP Holders to exclude GTX orders from being counted and
avoid potentially triggering their risk settings (prematurely),
resulting in the cancellation of open orders. Likewise, the Exchange
believes that allowing ATP Holders to instruct the Exchange not to
cancel any unexecuted GTX orders if their risk setting is breached
would likewise afford such ATP Holders additional flexibility. This
proposed handling of GTX orders is consistent with how the Exchange
currently handles GTX orders per (pre-Pillar) Commentary .01 to Rule
928NY (Risk Limitation Mechanism).\19\
---------------------------------------------------------------------------

    \18\ Per Rule 971.1NYP regarding Single-Leg CUBE Auctions, an
ATP Holder may respond to a CUBE Auction (``Auction'') with an order
marked as GTX, which order is not displayed and which must be
entered during the Response Time Interval of the Auction and may
include an AuctionID to specify the CUBE Order with which it would
like to trade. See Rule 971.1NYP(c)(1)(C)(i). A CUBE GTX Order will
cancel after executing with the CUBE Order to the extent possible.
Similarly, per Rule 980NYP(b)(2), an ATP Holder may designate an
Electronic Complex Order (or ECO) as GTX. A ``COA GTX Order'' is an
order sent in response to a Complex Order Auction (or COA), which
order is not displayed and which must be entered during the Response
Time Interval of a COA. The COA GTX Order will cancel after
executing with the COA Order to the extent possible. See Rule
980NYP(b)(2)(C). The Exchange notes that NYSE Arca does not offer
the CUBE Auction or CUBE GTX Orders.
    \19\ See (pre-Pillar) Rule 928NY, Commentary .01 (providing, in
relevant part, that upon the triggering of an established risk
limit, the Exchange would cancel all open orders and quotes in the
affected series but would exclude from such cancellation any
``orders entered in response to an electronic auction that are valid
only for the duration of the auction (`GTX')'', which includes CUBE
GTX Orders and COA GTX Orders).
---------------------------------------------------------------------------

    The Exchange believes that providing ATP Holders this additional
flexibility may encourage more ATP Holders to utilize the risk
settings, which benefits all market participants. The Exchange also
believes that the proposed change would result in risk settings that
may be better calibrated to suit the needs of certain ATP Holders
(i.e., those that routinely utilize GTX orders) and should encourage
ATP Holders to direct additional order flow and liquidity to the
Exchange.
Implementation
    This proposed change modifies a Pillar rule (i.e., with a ``P''
modifier). As is the case with all Pillar rules, this proposed rule
change (as well as the entire Rule 928NYP) will not be implemented
until all other Pillar-related rule filings are approved or operative,
as applicable, and the Exchange announces the migration of underlying
symbols to Pillar by Trader Update.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\20\ in
general, and furthers the objectives of section 6(b)(5) of the Act,\21\
in particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and 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.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change removes
impediments to and perfects the mechanism of a free and open market by
providing ATP Holders greater control and flexibility over setting
their risk tolerance, which may enhance the efficacy of the risk
settings. Orders marked GTX, including CUBE GTX Orders and COA GTX
Orders, will cancel after executing to the extent possible with a COA
Order as part of a Complex Order Auction. As such, GTX orders are never
ranked (as resting interest) in the Consolidated Book. The Exchange
believes that certain market participants utilize GTX orders to access
liquidity on the Exchange. Thus, the proposed change is designed to
accommodate participants that utilize GTX orders in this manner by
enabling them to exclude GTX orders from being counted and avoid
potentially triggering their risk settings (prematurely), resulting in
the cancellation of open orders. In addition, allowing ATP Holders the
option to exclude unexecuted GTX orders from being cancelled in the
event of a breach would allow ATP Holders to utilize this order type
without fear of such orders being cancelled before having the
opportunity to trade in a Complex Order Auction. As noted herein, this
proposed handling of

GTX orders (i.e., excluding such orders from cancellation upon
triggering of a risk setting) is consistent with how the Exchange
currently handles GTX orders per (pre-Pillar) Commentary .01 to Rule
928NY (Risk Limitation Mechanism).
    The Exchange believes that providing ATP Holders this additional
flexibility may encourage more ATP Holders to utilize the risk
settings, which benefits all market participants. Further, the proposed
change would promote just and equitable principles of trade because it
would result in risk settings that may be better calibrated to suit the
needs of certain ATP Holders (i.e., those that routinely utilize GTX
orders) and should encourage ATP Holders to direct additional order
flow and liquidity to the Exchange. To the extent additional order flow
is submitted to the Exchange as a result of the proposed change, all
market participants stand to benefit from increased trading. The
Exchange notes that an ATP Holder has the option of utilizing risk
settings for all orders submitted to the Exchange and, as proposed,
would have the additional option of excluding from these risk settings
any GTX orders in a given options class submitted to the Exchange.
    This proposed change, which was specifically requested by some ATP
Holders, would foster cooperation and coordination with persons engaged
in regulating, clearing, settling, and processing information with
respect to, and facilitating transactions in, securities as it will be
available to all ATP Holders and may encourage more ATP Holders to
utilize this enhanced functionality to the benefit of all market
participants.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange is proposing a
market enhancement that would provide ATP Holders with greater control
and flexibility over setting their risk tolerance and, potentially,
more protection over risk exposure. The proposal is structured to offer
the same enhancement to all ATP Holders and would not impose a
competitive burden on any participant. The Exchange does not believe
that the proposed enhancement to the existing Activity-Based Risk
Controls would impose a burden on competing options exchanges. Rather,
the availability of these controls may foster more competition.
Specifically, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. When an exchange offers enhanced functionality that
distinguishes it from the competition and participants find it useful,
it has been the Exchange's experience that competing exchanges will
move to adopt similar functionality. Thus, the Exchange believes that
this type of competition amongst exchanges is beneficial to the
marketplace as a whole as it can result in enhanced processes,
functionality, and technologies.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A)(iii) of the Act \22\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\23\
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    \22\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-NYSEAMER-2023-41 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-NYSEAMER-2023-41. 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 website (https://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 website 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSEAMER-2023-41 and should
be submitted on or before September 18, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
---------------------------------------------------------------------------

    \24\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-18430 Filed 8-25-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: June 28, 2011 (Volume 76, Number 124)]
[Notices]
[Page 37866-37867]
[DOCID:fr28jn11-116]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64733; File No. SR-Phlx-2011-85]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Rebates and Fees for Adding and Removing Liquidity in Select Symbols

 June 23, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 20, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend Section I of the Exchange's Fee
Schedule titled ``Rebates and Fees for Adding and Removing Liquidity in
Select Symbols,'' specifically to amend the Select Symbols.\3\ While
changes to the Fee Schedule pursuant to this proposal are effective
upon filing, the Exchange has designated these changes to be operative
on July 1, 2011. The text of the proposed rule change is available on
the Exchange's Web site at http://nasdaqtrader.com/
micro.aspx?id=PHLXfilings, at the principal office of the Exchange, and
at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \3\ The term ``Select Symbols'' refers to the symbols which are
subject to the Rebates and Fees for Adding and Removing Liquidity in
Section I of the Exchange's Fee Schedule.
---------------------------------------------------------------------------

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The purpose of the proposed rule change is to amend the list of
Select Symbols in Section I of the Exchange's Fee Schedule, entitled
``Rebates and Fees for Adding and Removing Liquidity in Select
Symbols'' in order to attract additional order flow to the Exchange.
    The Exchange displays a list of Select Symbols in its Fee Schedule
at Section I, ``Rebates and Fees for Adding and Removing Liquidity in
Select Symbols,'' that are subject to the rebates and fees in that
section. Among those symbols is Dendreon Corporation (``DNDN''),
Motorola Solutions, Inc. (``MSI'') and SPDR S&P Homebuilders (``XHB''),
which the Exchange is proposing to remove from the list of Select
Symbols. The Exchange is also proposing to add iPath S&P 500 VIX Short-
Term Futures ETN (``VXX'') to the list of Select Symbols in Section I.
    While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on July 1, 2011.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \4\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \5\ in particular, in that
it is an equitable allocation of

reasonable fees and other charges among Exchange members and other
persons using its facilities.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to remove DNDN, MSI and
XHB from its list of Select Symbols and add VXX to its list of Select
Symbols to attract additional order flow to the Exchange. The Exchange
anticipates that the addition of VXX to Section I of the Fee Schedule
would attract market participants to transact equity options at the
Exchange because of the available rebates. In addition, the Exchange
believes that applying the fees in Section II, entitled ``Equity
Options Fees'' \6\ to DNDN, MSI and XHB, including the opportunity to
receive payment for order flow, would also attract order flow to the
Exchange.
---------------------------------------------------------------------------

    \6\ Section II includes options overlying equities, ETFs, ETNs,
indexes and HOLDRS which are Multiply Listed.
---------------------------------------------------------------------------

    The Exchange believes that it is equitable to amend the list of
Select Symbols by removing DNDN, MSI and XHB and adding VXX because the
list of Select Symbols would apply uniformly to all categories of
participants in the same manner. All market participants who trade the
Select Symbols would be subject to the rebates and fees in Section I of
the Fee Schedule. Also, all market participants would be uniformly
subject to the fees in Section II.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\7\ At any time within 60 days of the filing
of the proposed rule change, the Commission summarily may temporarily
suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2011-85 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2011-85. This file
number should be included on the subject line if e-mail 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
a.m. and 3 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-Phlx-2011-85 and should be
submitted on or before July 19, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16148 Filed 6-27-11; 8:45 am]
BILLING CODE 8011-01-P