[Federal Register Volume 79, Number 112 (Wednesday, June 11, 2014)]
[Proposed Rules]
[Pages 33484-33486]
[FR Doc No: 2014-13609]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 79, No. 112 / Wednesday, June 11, 2014 /
Proposed Rules

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2014-0339; Directorate Identifier 2014-NM-025-AD]
RIN 2120-AA64

Airworthiness Directives; the Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain The Boeing Company Model 737-100, -200, -200C, -300, -400, and
-500 series airplanes. This proposed AD was prompted by reports of
fatigue cracks found in the upper corners of the forward entry door
skin cutout. This proposed AD would require repetitive inspections for
cracking in the upper corners of the forward entry door skin cutout,
and repair if necessary. Accomplishment of this repair or a preventive
modification would terminate the repetitive inspections. This proposed
AD also would require repetitive post-modification and post-repair
inspections. We are proposing this AD to detect and correct cracking in
the doorway upper corners, which could result in cabin
depressurization.

DATES: We must receive comments on this proposed AD by July 28, 2014.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2014-
0339; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Office (phone:<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Alan Pohl, Aerospace Engineer,
Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office,
1601 Lind Avenue SW., Renton, WA 98057-3356; phone:<PHONE_NUMBER>; fax:
425-917-6590; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2014-0339;
Directorate Identifier 2014-NM-025-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We received reports of fatigue cracks found in the upper corners of
the forward entry door skin cutout. The airplanes had accumulated
between 33,150 and 76,242 total flight cycles. The cracking is caused
by fatigue from cabin pressure loads. This condition, if not corrected,
could result in cabin depressurization.

Relevant Service Information

    We reviewed Boeing Alert Service Bulletin 737-53A1163, Revision 1,
dated January 8, 2014. For information on the procedures and compliance
times, see this service information at http://www.regulations.gov by
searching for Docket No. FAA-2014-0339.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would require accomplishing the repetitive
inspections for cracking in the upper corners of the forward entry door
skin cutout, and repair if necessary, as specified in the service
information described previously, except as discussed under
``Difference Between this Proposed AD and the Service Information.''
    The phrase ``corrective actions'' is used in this proposed AD.
``Corrective actions'' are actions that correct or address any
condition found. Corrective actions in an AD could include, for
example, repairs.

Explanation of Post-Modification and Post-Repair Inspection

    The Accomplishment Instructions of Boeing Alert Service Bulletin
737-53A1163, Revision 1, dated January 8, 2014, states that Group 1 and
2 airplanes having the repair or preventive modification installed in
accordance with Boeing Service Bulletin 737-53-1163, dated December 21,
1993,

are not required to be inspected; however, this AD would require
inspections of Group 1 and 2 airplanes in accordance with paragraph (i)
of this AD, which corresponds with table 3 of paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 737-53A1163, Revision
1, dated January 8, 2014.

Difference Between This Proposed AD and the Service Information

    The service bulletin specifies to contact the manufacturer for
instructions on how to inspect and repair certain conditions, but this
proposed AD would require inspecting and repairing those conditions in
one of the following ways:
     In accordance with a method that we approve; or
     Using data that meet the certification basis of the
airplane, and that have been approved by the Boeing Commercial
Airplanes Organization Designation Authorization (ODA) whom we have
authorized to make those findings.

Costs of Compliance

    We estimate that this proposed AD affects 371 airplanes of U.S.
registry.
    We estimate the following costs to comply with this proposed AD:

                                        Estimated Costs: Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                 Action                          Labor cost           Parts cost      product        operators
----------------------------------------------------------------------------------------------------------------
Inspection.............................  3 work-hours x $85 per               $0            $255         $94,605
                                          hour = $255.
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                                        Estimated Costs: Optional Actions
----------------------------------------------------------------------------------------------------------------
              Action                    Labor cost                Parts cost               Cost per  product
----------------------------------------------------------------------------------------------------------------
Preventive modification..........  44 work-hours x $85   Up to $3,912...............  Up to $7,652.
                                    per hour = $3,740.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary repairs that
would be required based on the results of the proposed inspection. We
have no way of determining the number of aircraft that might need these
repairs:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
              Action                    Labor cost                Parts cost               Cost per  product
----------------------------------------------------------------------------------------------------------------
Repair...........................  60 work-hours x $85   Up to $4,964...............  Up to $10,064.
                                    per hour = $5,100.
----------------------------------------------------------------------------------------------------------------

    We have received no definitive data that would enable us to provide
a cost estimate for the post-repair or post-preventive modification
inspections specified in this proposed AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

The Boeing Company: Docket No. FAA-2014-0339; Directorate Identifier
2014-NM-025-AD.

(a) Comments Due Date

    We must receive comments by July 28, 2014.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company Model 737-100, -200, -
200C, -300, -400, and -500 series airplanes; certificated in any
category; as identified in Boeing Alert Service Bulletin 737-
53A1163, Revision 1, dated January 8, 2014.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Unsafe Condition

    This AD was prompted by reports of fatigue cracks found in the
upper corners of the forward entry door skin cutout. We are issuing
this AD to detect and correct cracking in the doorway upper corners,
which could result in cabin depressurization.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Inspection

    (1) For airplanes identified in Boeing Alert Service Bulletin
737-53A1163, Revision 1, dated January 8, 2014, as Groups 1 and 2,
Configuration 2, and Group 3: Before the accumulation of 27,000
total flight cycles, or within 4,500 flight cycles after the
effective date of this AD, whichever occurs later, do an external
detailed inspection for cracking of the skin assembly, and a low
frequency eddy current (LFEC) inspection for cracking of the skin
assembly and bear strap, and all applicable corrective actions, in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-53A1163, Revision 1, dated January 8, 2014,
except as required by paragraph (j) of this AD. Repeat the
inspections thereafter at intervals not to exceed 4,500 flight
cycles. Do all applicable corrective actions before further flight.
    (2) For airplanes identified as Group 4 in Boeing Alert Service
Bulletin 737-53A1163, Revision 1, dated January 8, 2014: Within 120
days after the effective date of this AD, do inspections of the skin
assembly and bear strap and all applicable corrective actions using
a method approved in accordance with the procedures specified in
paragraph (m) of this AD.

(h) Terminating Actions

    (1) Accomplishment of the preventive change specified in Part II
of the Accomplishment Instructions of Boeing Service Bulletin 737-
53-1163, dated December 21, 1993, or the preventive modification
specified in Part 2 of the Accomplishment Instructions of Boeing
Alert Service Bulletin 737-53A1163, Revision 1, dated January 8,
2014, terminates the inspection requirements specified in paragraph
(g)(1) of this AD.
    (2) Accomplishment of the repair specified in Part III of the
Accomplishment Instructions of Boeing Service Bulletin 737-53-1163,
dated December 21, 1993, or Part 3 of the Accomplishment
Instructions of Boeing Alert Service Bulletin 737-53A1163, Revision
1, dated January 8, 2014, terminates the inspection requirements
specified in paragraph (g)(1) of this AD.

(i) Post-Modification and Post-Repair Inspections

    For airplanes identified in Boeing Alert Service Bulletin 737-
53A1163, Revision 1, dated January 8, 2014, as Groups 1 and 2, on
which a repair or preventive modification has been installed in
accordance with Boeing Service Bulletin 737-53-1163, dated December
21, 1993, or Boeing Alert Service Bulletin 737-53A1163, Revision 1,
dated January 8, 2014: At the applicable time specified in table 3
of paragraph 1.E., ``Compliance,'' of Boeing Alert Service Bulletin
737-53A1163, Revision 1, dated January 8, 2014, inspect the fuselage
skin assembly, bear strap, and frame and sill outer chords, as
applicable, for cracking, in accordance with table 3 of paragraph
1.E., ``Compliance,'' of Boeing Alert Service Bulletin 737-53A1163,
Revision 1, dated January 8, 2014. Repeat the inspection thereafter
at the times specified in table 3 of paragraph 1.E., ``Compliance''
of Boeing Alert Service Bulletin 737-53A1163, Revision 1, dated
January 8, 2014. If any crack is found during any inspection
required by this paragraph, repair before further flight using a
method approved in accordance with the procedures specified in
paragraph (m) of this AD.

(j) Exception to Service Information Specifications

    If any cracking is found during any inspection required by this
AD, and Boeing Alert Service Bulletin 737-53A1163, Revision 1, dated
January 8, 2014, specifies to contact Boeing for appropriate action:
Before further flight, repair the crack using a method approved in
accordance with the procedures specified in paragraph (m) of this
AD.

(k) Explanation of Service Information and AD

    The Accomplishment Instructions of Boeing Alert Service Bulletin
737-53A1163, Revision 1, dated January 8, 2014, states that Group 1
and 2, Configuration 1 airplanes having the repair or preventive
modification installed in accordance with Boeing Service Bulletin
737-53-1163, dated December 21, 1993, are not required to be
inspected. However, this AD requires inspections of Group 1 and 2
airplanes, as identified in and in accordance with paragraph (i) of
this AD, which correspond with table 3 of paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 737-53A1163,
Revision 1, dated January 8, 2014.

(l) Credit for Previous Actions

    This paragraph provides credit for the actions specified in
paragraphs (g) and (h) of this AD if those actions were performed
before the effective date of this AD using Boeing Service Bulletin
737-53-1163, dated December 21, 1993, which is not incorporated by
reference in this AD.

(m) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (n)(1) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD if it is approved by the
Boeing Commercial Airplanes Organization Designation Authorization
(ODA) that has been authorized by the Manager, Seattle ACO, to make
those findings. For a repair method to be approved, the repair must
meet the certification basis of the airplane and the approval must
specifically refer to this AD.

(n) Related Information

    (1) For more information about this AD, contact Alan Pohl,
Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on May 30, 2014.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2014-13609 Filed 6-10-14; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 71 (Wednesday, April 13, 2016)]
[Notices]
[Pages 21916-21921]
[FR Doc No: 2016-08422]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77549; File No. SR-NYSEArca-2016-14]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade
Shares of the WBI Tactical Rotation Shares Under NYSE Arca Equities
Rule 8.600

April 7, 2016.

I. Introduction

    On February 3, 2016, NYSE Arca, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or
``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to list and trade shares (``Shares'') of the WBI Tactical
Rotation Shares (``Fund'') under NYSE Arca Equities Rule 8.600. The
Commission published notice of the proposed rule change in the Federal
Register on February 23, 2016.\3\ The Commission received no comments
on the proposed rule change. On March 28, 2016, the Exchange filed
Amendment No. 1 to the proposed rule change.\4\ The Commission is
publishing this notice to solicit comment on Amendment No. 1 to the
proposed rule change from interested persons, and is approving the
proposed rule change, as modified by Amendment No. 1, on an accelerated
basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 77160 (February 17,
2016), 81 FR 9029.
    \4\ In Amendment No. 1, which replaced the original filing in
its entirety, the Exchange: (1) Clarified a reference to debt
securities is to ``Debt Instruments,'' as described in the filing;
(2) represented that, under normal market conditions, the Fund will
invest at least 75% of its corporate debt securities that have at
least $1,000,000 par amount outstanding in developed countries or at
least $200,000,000 in emerging markets countries; (3) stated that
the Fund's assets invested in Debt Instruments would meet certain
criteria for index-based fixed-income ETFs contained in Exchange
Rule 5.2(j)(3), Commentary .02; (4) stated where price information
could be found for non-exchange listed ADRs, RMBS, CMBS, ABS, and
municipal securities; (5) clarified that all statements and
representations made in the filing regarding the description of the
portfolio, limitations on portfolio holdings or reference assets, or
the applicability of Exchange rules and surveillance procedures
constitute continued listing requirements for listing the Shares on
the Exchange; (6) stated that the issuer has represented to the
Exchange that it will advise the Exchange of any failure by the Fund
to comply with the continued listing requirements, and, pursuant to
its obligations under Section 19(g)(1) of the Act, the Exchange will
monitor for compliance with the continued listing requirements, and
if the Fund is not in compliance with the applicable listing
requirements, the Exchange will commence delisting procedures under
NYSE Arca Equities Rule 5.5(m); and (7) made other clarifying and
technical amendments. Amendment No. 1 is available at: http://www.sec.gov/comments/sr-nysearca-2016-14/nysearca201614-1.pdf.
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II. The Exchange's Description of the Proposal 5
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    \5\ The Commission notes that additional information regarding
the Fund, the Trust (as defined below), and the Shares, including
investment strategies, risks, creation and redemption procedures,
fees, portfolio holdings, disclosure policies, calculation of net
asset value (``NAV''), distributions, and taxes, among other things,
can be found in Amendment No. 1 and the Registration Statement, as
applicable. See Amendment No. 1, supra note 4, and Registration
Statement, infra note 6.
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    The Exchange proposes to list and trade the Shares under NYSE Arca
Equities Rule 8.600, which governs the listing and trading of Managed
Fund Shares on the Exchange. The Shares will be offered by the Absolute
Shares Trust (``Trust''), a statutory trust organized under the laws of
the State of Delaware and registered with the Commission as an open-end
management investment

company.\6\ Millington Securities, Inc. (``Adviser''), a wholly-owned
subsidiary of WBI Trading Company, Inc., will be the investment advisor
to the Fund, and WBI Investments, Inc. (``Sub-Adviser''), an affiliate
of WBI Trading Company, Inc., will act as Sub-Adviser to the Fund.\7\
U.S. Bancorp Fund Services, LLC will serve as the administrator,
transfer agent, and index receipt agent. U.S. Bank, National
Association will serve as the Fund's custodian and securities lending
agent. Foreside Fund Services, LLC will serve as the distributor for
the Fund on an agency basis.
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    \6\ The Trust is registered under the 1940 Act. On August 24,
2015, the Trust filed with the Commission a registration statement
on Form N-1A, and on November 6, 2015 filed an amendment thereto,
under the Securities Act of 1933 (15 U.S.C. 77a) (``Securities
Act'') and the 1940 Act relating to the Fund (File Nos. 333-192733
and 811-22917) (as amended, the ``Registration Statement''). The
description of the operation of the Trust and the Fund 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 the 1940 Act. See Investment Company Act Release No.
30543 (May 29, 2013) (File No. 812-13886) (``Exemptive Order'').
    \7\ The Adviser is a registered broker-dealer and is affiliated
with a broker-dealer. The Sub-Adviser is not registered as a broker-
dealer but is affiliated with a broker-dealer. In such capacity, the
Adviser and Sub-Adviser have implemented a firewall with respect to
their relevant personnel and their respective broker-dealer
affiliates 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. In the event (a)
the Adviser becomes newly affiliated with a broker-dealer or Sub-
Adviser becomes registered as a broker-dealer or newly affiliated
with a broker-dealer, as applicable, or (b) any new adviser or sub-
adviser is a broker-dealer or becomes affiliated with a broker-
dealer, it will implement a fire wall with respect to its personnel
or such broker-dealer regarding access to information concerning the
composition and/or changes to the portfolio, and will be subject to
procedures designed to prevent the use and dissemination of material
non-public information regarding such portfolio.
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A. The Fund's Principal Investments

    According to the Exchange, the Fund's investment objective is to
seek long term capital appreciation while also seeking to protect
principal during unfavorable market conditions.\8\
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    \8\ The Sub-Adviser's proprietary portfolio selection process
used for the Fund attempts to identify investments that can provide
consistent, attractive returns net of expenses with potentially less
volatility and risk to capital than traditional approaches, whatever
market conditions may be.
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    The Fund, under normal market conditions,\9\ will seek to invest
primarily (more than 50% of its total assets) in the principal
investments discussed in this section. The Fund will invest directly in
equity securities, debt instruments and ``Financial Instruments'' (as
described below) or will invest in them indirectly by investing in the
equity securities of other registered investment companies (including
exchange traded funds (``ETFs''),\10\ mutual funds, unit investment
trusts, exchange-traded and over-the counter (``OTC'') closed-end funds
(``CEFs'') and exchange-traded and OTC business development companies),
equity securities of exchange-traded pooled vehicles not required to be
registered under the 1940 Act and issuing equity securities
(``ETPVs''),\11\ exchange-traded notes (``ETNs''),\12\ equity-linked
notes (``ELNs''),\13\ and index-linked exchangeable notes (``ILENs'')
\14\ (collectively, ETFs, ETPVs, ETNs, ELNs and ILENs are referred to
as ``exchange traded products'' or ``ETPs,'' and collectively, ETFs,
mutual funds, unit investment trusts, CEFs, and business development
companies are referred to as ``Registered Funds'').
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    \9\ The term ``under normal market conditions'' 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.
    \10\ For purposes of this filing, ETFs consist of Investment
Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3));
Portfolio Depositary Receipts (as described in NYSE Arca Equities
Rule 8.100; and Managed Fund Shares (as described in NYSE Arca
Equities Rule 8.600). All ETFs will be listed and traded in the U.S.
on a national securities exchange. While the Fund may invest in
inverse ETFs, the Fund will not invest in leveraged (e.g., 2X, -2X,
3X or -3X) ETFs.
    \11\ For purposes of this filing, the ``exchange-traded pooled
vehicles'' or ``ETPVs'' consist of 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); and Commodity Futures Trust Shares (as described in
NYSE Arca Equities Rule 8.204).
    \12\ ETNs include Index-Linked Securities (as described in NYSE
Arca Equities Rule 5.2(j)(6)).
    \13\ Equity Linked Notes are described in NYSE Arca Equities
Rule 5.2(j)(2).
    \14\ Index-Linked Exchangeable Notes are described in NYSE Arca
Equities Rule 5.2(j)(4).
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    The Fund may invest in the following exchange-traded and OTC U.S.
and foreign equity securities (other than non-exchange-traded
investment company securities): Common stocks, preferred stocks,
rights, warrants, convertibles, master limited partnerships (exchange-
traded businesses organized as partnerships (``MLPs'')), Depositary
Receipts (``DRs'', as described below),\15\ and exchange-traded real
estate investment trusts (``REITs'').
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    \15\ For purposes of this filing, DRs means the following:
American Depositary Receipts (``ADRs''), American Depositary Shares
(``ADSs''), European Depositary Receipts (``EDRs''), Global
Depositary Receipts (``GDRs'') and International Depositary Receipts
(``IDRs''). ADSs are issued by depository banks in the United States
under an agreement with the foreign issuer, and the entire issuance
is called an ADR and the individual shares are referred to as ADSs.
ADRs may be purchased through ``sponsored'' or ``unsponsored''
facilities. Not more than 10% of the Fund's assets will be invested
in non-exchange-listed ADRs.
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    As part of the Fund's principal investment strategy, up to 20% of
the Fund's net assets may be invested in exchange-traded or OTC
``Financial Instruments,'' which are the following: Foreign exchange
forward contracts; futures on equity securities, debt securities (i.e.,
``Debt Securities'' defined below), equity indices, fixed income
indices, commodity indices, currencies, commodities, and interest
rates; exchange-traded and OTC options on equity indices, currencies,
and equity and debt securities; exchange-traded and OTC options on
futures contracts; exchange-traded and OTC interest rate swaps, cross-
currency swaps, total return swaps on fixed income and equity
securities, inflation swaps and credit default swaps; and options on
such swaps (``swaptions'').\16\ Financial Instruments will be utilized
in connection with option strategies used by the Fund, including
writing (selling) covered calls, buying puts, using combinations of
calls and puts, and using combinations of calls and combinations of put
options (``puts''). The Fund may also use options on indices and on
futures, such as by writing a call on a futures contract.\17\ The Fund
may enter cap, floor and collar agreements as a part of its option
strategies.
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    \16\ Options on swaps are traded OTC. In the future, in the
event that there are exchange-traded options on swaps, the Fund may
invest in these instruments.
    \17\ The Fund may directly write call options on stocks and
stock indices if the calls are ``covered'' throughout the life of
the option. The Fund may also write and purchase puts.
---------------------------------------------------------------------------

    As part of its principal investment strategy, the Fund may invest
in the following types of debt securities (``Debt Instruments''):
Corporate debt securities; \18\ corporate debt securities that are
convertible into common stock or interests; U.S. Government securities;
\19\ debt securities of foreign

issuers; sovereign debt securities; repurchase agreements; municipal
securities; sovereign debt obligations; obligations of international
agencies or supranational agencies; sovereign, quasi-sovereign,
supranational or local authority debt obligations issued by non-U.S.
governments; Treasury Inflation-Protected Securities; and zero coupon
bonds. Debt Instruments may be of all maturities, from less than one
year to more than thirty years (if available). Debt Instruments may be
fixed, variable or floating rate securities.\20\
---------------------------------------------------------------------------

    \18\ Such corporate debt securities also include debt securities
sold pursuant to Rule 144A under the Securities Act. Under normal
market conditions, the Fund will invest at least 75% of its
corporate debt securities in issuances that have at least
$100,000,000 par amount outstanding in developed countries or at
least $200,000,000 par amount outstanding in emerging market
countries.
    \19\ The Fund may invest in U.S. Government obligations and
other quasi government related obligations. Such obligations include
Treasury bills, certificates of indebtedness, notes and bonds, and
issues of such entities as the Government National Mortgage
Association, Federal Home Loan Banks, Federal Intermediate Credit
Banks, Federal Farm Credit Banks, Federal Housing Administration,
Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation, and the Student Loan Marketing Association.
    \20\ The Fund's assets invested in Debt Instruments will meet
certain criteria for index-based, fixed-income ETFs contained in
NYSE Arca Equities Rule 5.2(j)(3), Commentary .02. See NYSE Arca
Equities Rule 5.2(j)(3), Commentary .02 governing fixed-income-based
Investment Company Units. The requirements of Rule 5.2(j)(3),
Commentary .02(a) that will be met include the following: (i) The
index or portfolio must consist of ``Fixed Income Securities'' as
defined in Rule 5.2(j)(3), Commentary .02(a)(1); (ii) components
that in the aggregate account for at least 75% of the weight of the
index or portfolio each must have a minimum original principal
amount outstanding of $100 million or more; (iii) a component may be
a convertible security, but once the convertible security converts
to an underlying equity security, the component is removed from the
index or portfolio; (iv) no component fixed income security
(excluding Treasury Securities) will represent more than 30% of the
weight of the index or portfolio, and the five highest weighted
component fixed-income securities do not in the aggregate account
for more than 65% of the weight of the index or portfolio; (v) an
underlying index or portfolio (excluding exempted securities) must
include securities from a minimum of 13 non-affiliated issuers; and
(vi) component securities that in aggregate account for at least 90%
of the weight of the index or portfolio must be either (a) from
issuers that are required to file reports pursuant to Sections 13
and 15(d) of the Act; (b) from issuers that have a worldwide market
value of its outstanding common equity held by non-affiliates of
$700 million or more; (c) from issuers that have outstanding
securities that are notes, bonds, debentures, or evidence of
indebtedness having a total remaining principal amount of at least
$1 billion; (d) exempted securities as defined in Section 3(a)(12)
of the Act; or (e) from issuers that are a government of a foreign
country or a political subdivision of a foreign country.
---------------------------------------------------------------------------

    The Fund may invest in and hold cash or ``Cash Equivalents'' \21\
as part of the normal operation of its principal investment strategy.
---------------------------------------------------------------------------

    \21\ ``Cash Equivalents'' means: High-quality short-term debt
securities; money market instruments, certificates of deposit issued
by commercial banks as well as savings banks or savings and loan
associations; bankers' acceptances; time deposits; and commercial
paper and short-term notes rated at the time of purchase ``A-2'' or
higher by Standard & Poor's, ``Prime-1'' by Moody's Investors
Services Inc., or similarly rated by another nationally recognized
statistical rating organization, or, if unrated, will be determined
by the Sub-Adviser to be of comparable quality, as well as U.S.
Government obligations.
---------------------------------------------------------------------------

    For investments in Registered Funds, the Fund may invest in excess
of the limits contained in the 1940 Act.\22\
---------------------------------------------------------------------------

    \22\ The Exchange states that the Commission has granted
exemptive relief to the Trust under Section 12(d)(1)(J) of the 1940
Act permitting the Fund to operate as a ``fund of funds'' and invest
in other investment companies without complying with the limitations
set forth in Section 12(d)(1) of the 1940 Act, subject to certain
terms and limitations that are contained in the Exemptive Order.
---------------------------------------------------------------------------

B. The Fund's Other Investments

    While the Fund, under normal market conditions, will seek to invest
primarily (at least 50% of its total assets) in the securities
described above, the Fund may invest as part of its non-principal
investment strategy (less than 50% of the Fund's assets) in short
positions in equity securities and in agency and non-agency residential
mortgage-backed securities (``RMBS''); agency and non-agency commercial
mortgage-backed securities (``CMBS''); and agency and non-agency asset-
backed securities (``ABS'').

C. The Fund's Investment Restrictions

    The Fund may invest up to 40% of its net assets in Debt Instruments
rated below investment grade.
    The Fund will not invest more than 50% of its net assets in
securities of issuers in emerging markets, which could consist of DRs,
dollar-denominated foreign securities or non-U.S. dollar denominated
foreign securities.
    Investments in non-agency mortgage and asset backed securities will
be limited to 20% of the Fund's total assets in the aggregate.
    The Fund may invest up to 30% of its total assets in securities
denominated in non-U.S. Dollars, but this limitation will not apply to
securities of non-U.S. issuers that are denominated in U.S. Dollars.
The Fund may invest up to 50% of the Fund's principal investments in
the securities of issuers in emerging markets.
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser. The Fund
will monitor its portfolio liquidity on an ongoing basis to determine
whether, in light of current circumstances, an adequate level of
liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include
securities subject to contractual or other restrictions on resale and
other instruments that lack readily available markets as determined in
accordance with Commission staff guidance.\23\
---------------------------------------------------------------------------

    \23\ 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. 31835 (September 22, 2015),
discussions at footnotes 92 and 93; Investment Company Act Release
No. 28193 (March 11, 2008), 73 FR 14618 (March 18, 2008), footnote
34. See also, Investment Company Act Release No. 5847 (October 21,
1969), 35 FR 19989 (December 31, 1970) (Statement Regarding
``Restricted Securities''); Investment Company Act Release No. 18612
(March 12, 1992), 57 FR 9828 (March 20, 1992) (Revisions of
Guidelines to Form N-1A). A fund's portfolio security is illiquid if
it cannot be disposed of in the ordinary course of business within
seven days at approximately the value ascribed to it by the fund.
See Investment Company Act Release No. 14983 (March 12, 1986), 51 FR
9773 (March 21, 1986) (adopting amendments to Rule 2a-7 under the
1940 Act); Investment Company Act Release No. 17452 (April 23,
1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under the
1933 Act).
---------------------------------------------------------------------------

    The Fund will be non-diversified under the 1940 Act.\24\
---------------------------------------------------------------------------

    \24\ The diversification standard is set forth in Section
5(b)(1) of the 1940 Act (15 U.S.C. 80e).
---------------------------------------------------------------------------

    The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage. That is,
while the Fund will be permitted to borrow as permitted under the 1940
Act, the Fund's investments will not be used to seek performance that
is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the Fund's
primary broad-based securities benchmark index (as defined in Form N-
1A).\25\
---------------------------------------------------------------------------

    \25\ The Fund's broad-based securities benchmark index will be
identified in a future amendment to the Registration Statement
following the Fund's first full calendar year of performance.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Exchange
Act and the rules and regulations thereunder applicable to a national
securities exchange.\26\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment No. 1, is consistent
with Section 6(b)(5) of the Exchange Act,\27\ which requires, among
other things, that the Exchange's rules be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the

mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The
Commission also finds that the proposal to list and trade the Shares on
the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Exchange Act,\28\ which sets forth the finding of Congress that it is
in the public interest and appropriate for the protection of investors
and the maintenance of fair and orderly markets to assure the
availability to brokers, dealers, and investors of information with
respect to quotations for and transactions in securities.
---------------------------------------------------------------------------

    \26\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \27\ 15 U.S.C. 78f(b)(5).
    \28\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    According to the Exchange, quotation and last-sale information for
the Shares, and U.S. exchange-traded common stocks, preferred stocks,
rights, warrants, convertibles, MLPs, DRs, REITs, CEFs, ETFs, ETPs and
ETNs will be available via the Consolidated Tape Association (``CTA'')
high-speed line. Intra-day price information for foreign exchange-
traded common stocks, preferred stocks, rights, warrants, convertibles,
MLPs, DRs and REITs, will be available from the applicable foreign
exchange and from major market data vendors. Price information for OTC
common stocks, OTC CEFs, non-exchange listed ADRs, RMBS, CMBS, ABS, and
OTC Financial Instruments will be available from major market data
vendors. Intra-day and closing price information for exchange-traded
Financial Instruments will be available from the applicable exchange
and from major market data vendors. In addition, price information for
U.S. exchange-traded options is available from the Options Price
Reporting Authority. Intra-day price information for Cash Equivalents
will be available from major market data vendors. Price information for
municipal securities is available from the Municipal Securities
Rulemaking Board's (``MSRB'') Electronic Municipal Market Access
system.
    In addition, the Portfolio Indicative Value, as defined in NYSE
Arca Equities Rule 8.600 (c)(3), will be widely disseminated by one or
more major market data vendors at least every 15 seconds during the
Core Trading Session.\29\ On each business day, before commencement of
trading in Shares in the Core Trading Session on the Exchange, the Fund
will disclose on its Web site the Disclosed Portfolio, as defined in
NYSE Arca Equities Rule 8.600(c)(2), that will form the basis for the
Fund's calculation of NAV at the end of the business day.\30\
---------------------------------------------------------------------------

    \29\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Portfolio Indicative Values taken from CTA or other data feeds.
    \30\ On a daily basis, the Adviser will disclose on the Fund's
Web site the following information regarding each portfolio holding,
as applicable to the type of holding: Ticker symbol, CUSIP number or
other identifier, if any; a description of the holding (including
the type of holding, such as the type of swap); the identity of the
security, commodity, index or other asset or instrument underlying
the holding, if any; for options, the option strike price; quantity
held (as measured by, for example, par value, notional value or
number of shares, contracts or units); maturity date, if any; coupon
rate, if any; effective date, if any; market value of the holding;
and the percentage weighting of the holding in the Fund's portfolio.
The Web site information will be publicly available at no charge.
The Fund's disclosure of derivative positions in the Disclosed
Portfolio will include information that market participants can use
to value these positions intraday.
---------------------------------------------------------------------------

    The NAV for the Shares will be calculated after 4:00 p.m. Eastern
Time each trading day. A basket composition file, which will include
the security names and share quantities required to be delivered in
exchange for Fund Shares, together with estimates and actual cash
components, will be publicly disseminated daily prior to the opening of
the New York Stock Exchange via the National Securities Clearing
Corporation. Information regarding market price and trading volume for
the Shares will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services. The Web site for the Fund will include a form of the
prospectus for the Fund and additional data relating to NAV and other
applicable quantitative information.
    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.\31\
Trading in Shares of the Fund will be halted if the circuit-breaker
parameters in NYSE Arca Equities Rule 7.12 have been reached. Trading
also may be halted because of market conditions or for reasons that, in
the view of the Exchange, make trading in the Shares inadvisable.\32\
Trading in the Shares also will be subject to NYSE Arca Equities Rule
8.600(d)(2)(D), which sets forth circumstances under which Shares of
the Fund may be halted. The Exchange represents that it has a general
policy prohibiting the distribution of material, non-public information
by its employees. The Adviser is a registered broker-dealer and is
affiliated with a broker-dealer, and the Sub-Adviser is not registered
as a broker-dealer but is affiliated with a broker-dealer. In such
capacity, the Adviser and Sub-Adviser have implemented a firewall with
respect to their relevant personnel and their respective broker-dealer
affiliates 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.\33\ Further, the Commission notes
that the Reporting Authority that provides the Disclosed Portfolio of
the Fund must implement and maintain, or be subject to, procedures
designed to prevent the use and dissemination of material, non-public
information regarding the actual components of the portfolio.\34\
---------------------------------------------------------------------------

    \31\ See NYSE Arca Equities Rule 8.600(d)(1)(B).
    \32\ These may include: (1) The extent to which trading is not
occurring in the securities or the financial instruments
constituting the Disclosed Portfolio of the Fund; or (2) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present.
    \33\ See supra note 7. The Exchange represents that an
investment adviser to an open-end fund is required to be registered
under the Investment Advisers Act of 1940.
    \34\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
---------------------------------------------------------------------------

    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit Holders (``ETP Holders'') in an Information
Bulletin (``Bulletin'') of the special characteristics and risks
associated with trading the Shares. The Exchange represents that
trading in the Shares will be subject to the existing trading
surveillances, administered by the Financial Industry Regulatory
Authority (``FINRA'') on behalf of the Exchange, or by regulatory staff
of the Exchange, which are designed to detect violations of Exchange
rules and applicable federal securities laws.\35\
---------------------------------------------------------------------------

    \35\ The Exchange states that FINRA surveils trading on the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------

    The Exchange represents that it deems the Shares to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has also made the following
representations:

    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) Trading in the Shares will be subject to the existing trading
surveillances, administered by regulatory staff of the Exchange, or
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities laws,
and these procedures are adequate to properly monitor Exchange trading
of the Shares in all trading sessions and to deter and detect
violations of Exchange rules and federal securities laws applicable to
trading on the Exchange.
    (4) The Exchange has represented that all statements and
representations made in this filing regarding (a) the description of
the portfolio, (b) limitations on portfolio holdings or reference
assets, or (c) the applicability of Exchange rules and surveillance
procedures shall constitute continued listing requirements for listing
the Shares on the Exchange. The issuer has represented to the Exchange
that it will advise the Exchange of any failure by the Fund to comply
with the continued listing requirements, and, pursuant to its
obligations under Section 19(g)(1) of the Act, the Exchange will
monitor for compliance with the continued listing requirements.\36\ If
the Fund is not in compliance with the applicable listing requirements,
the Exchange will commence delisting procedures under NYSE Arca
Equities Rule 5.5(m).
---------------------------------------------------------------------------

    \36\ The Commission notes that certain other proposals for the
listing and trading of managed fund shares include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Notice of Filing of Amendment No.
2, and Order Granting Accelerated Approval of a Proposed Rule
Change, as Modified by Amendment No. 2, to List and Trade Shares of
the SPDR DoubleLine Short Duration Total Return Tactical ETF of the
SSgA Active Trust, available at: http://www.sec.gov/rules/sro/bats/2016/34-77499.pdf. In the context of this representation, it is the
Commission's view that ``monitor'' and ``surveil'' both mean ongoing
oversight of the Fund's compliance with the continued listing
requirements. Therefore, the Commission does not view ``monitor'' as
a more or less stringent obligation than ``surveil'' with respect to
the continued listing requirements.
---------------------------------------------------------------------------

    (5) FINRA, on behalf of the Exchange, and regulatory staff of the
Exchange, will communicate as needed regarding trading in the Shares,
certain exchange-traded options and futures, certain exchange-traded
equities (including ETFs, ETPs. ETNs, CEFs, certain common stocks and
certain REITs) with other markets or other entities that are members of
the Intermarket Surveillance Group (``ISG''),\37\ and FINRA and
regulatory staff of the Exchange may obtain trading information
regarding trading in the Shares, certain exchange-traded options and
futures, certain exchange-traded equities (including ETFs, ETPs. ETNs,
CEFs, certain common stocks and certain REITs) from such markets or
entities. In addition, the Exchange may obtain information regarding
trading in the Shares, certain exchange-traded options and futures,
certain exchange-traded equities (including ETFs, ETPs. ETNs, CEFs,
certain common stocks and certain REITs) from markets or other entities
that are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement. FINRA, on behalf of the
Exchange, is able to access, as needed, trade information for certain
fixed income securities held by the Fund reported to FINRA's Trade
Reporting and Compliance Engine. FINRA also can access data obtained
from the MSRB relating to municipal bond trading activity for
surveillance purposes in connection with trading in the Shares.
---------------------------------------------------------------------------

    \37\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
---------------------------------------------------------------------------

    (6) Prior to the commencement of trading of the Shares, the
Exchange will inform its ETP Holders in a Bulletin of the special
characteristics and risks associated with trading the Shares. The
Bulletin will discuss the following: (a) The procedures for purchases
and redemptions of Shares in creation units (and that Shares are not
individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which
imposes a duty of due diligence on its ETP Holders to learn the
essential facts relating to every customer prior to trading the Shares;
(c) the risks involved in trading the Shares during the Opening and
Late Trading Sessions when an updated Portfolio Indicative Value will
not be calculated or publicly disseminated; (d) how information
regarding the Portfolio Indicative Value and the Disclosed Portfolio is
disseminated; (e) the requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior to or concurrently
with the confirmation of a transaction; and (f) trading information.
    (7) For initial and continued listing, the Fund will be in
compliance with Rule 10A-3 under the Exchange Act,\38\ as provided by
NYSE Arca Equities Rule 5.3.
---------------------------------------------------------------------------

    \38\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (8) A minimum of 100,000 Shares for the Fund will be outstanding at
the commencement of trading on the Exchange.
    (9) While the Fund may invest in inverse ETFs, the Fund will not
invest in leveraged (e.g., 2X, -2X, 3X or -3X) ETFs.
    (10) Not more than 10% of the net assets of the Fund in the
aggregate invested in futures contracts or exchange-traded options
contracts shall consist of futures contracts or exchange-traded options
contracts whose principal market is not a member of ISG or is a market
with which the Exchange does not have a comprehensive surveillance
sharing agreement.
    (11) Under normal market conditions, the Fund will invest at least
75% of its corporate debt securities in issuances that have at least
$100,000,000 par amount outstanding in developed countries or at least
$200,000,000 par amount outstanding in emerging market countries.
    (12) The Fund may not invest more than 30% of its total assets in
securities denominated in non-U.S. Dollars, but this limitation will
not apply to securities of non-U.S. issuers that are denominated in
U.S. Dollars.
    (13) The Fund may not invest more than 40% of its net assets in
Debt Instruments rated below investment grade (also known as ``junk
bonds'').
    (14) The Fund will not invest more than 50% of its net assets in
securities of issuers in emerging markets, which could consist of DRs,
dollar-denominated foreign securities or non-U.S. dollar denominated
foreign securities.
    (15) Investments in non-agency mortgage and asset backed securities
will be limited to 20% of the Fund's total assets in the aggregate.
    (16) The Fund may not invest more than 50% of the Fund's principal
investments in the securities of issuers in emerging markets.
    (17) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser, in
accordance with Commission staff guidance.
    (18) The Fund's investments will be consistent with the Fund's
investment objective and will not be used to enhance leverage. That is,
while the Fund will be permitted to borrow as permitted under the 1940
Act, the Fund's investments will not be used to seek performance that
is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the Fund's
primary broad-based

securities benchmark index (as defined in Form N-1A).
    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Amendment
No. 1. The Commission notes that the Fund and the Shares must comply
with the requirements of NYSE Arca Equities Rule 8.600 to be initially
and continuously listed and traded on the Exchange.

IV. Solicitation of Comments on Amendment No. 1

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 1
to the proposed rule change is consistent with the Act. Comments may be
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2016-14 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2016-14. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2016-14 and should
be submitted on or before May 4, 2016.

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

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of Amendment No. 1 in the Federal
Register. The additional information in Amendment No. 1, among other
things, helped the Commission to evaluate the Shares' susceptibility to
manipulation and the Exchange's ability to investigate possible
manipulative activity. Accordingly, the Commission finds good cause for
approving the proposed rule change, as modified by Amendment No. 1, on
an accelerated basis, pursuant to Section 19(b)(2) of the Act.\39\
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\40\ that the proposed rule change (SR-NYSEArca-2016-14),
as modified by Amendment No. 1 thereto, be, and it hereby is, approved
on an accelerated basis.
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(2).
    \41\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\41\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08422 Filed 4-12-16; 8:45 am]
BILLING CODE 8011-01-P