[Federal Register: March 12, 2009 (Volume 74, Number 47)]
[Notices]
[Page 10752-10753]
[DOCID:fr12mr09-78]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[USCG-2009-0115]

Information Collection Request to Office of Management and
Budget; OMB Control Numbers: 1625-0009, 1625-0047, 1625-0063, 1625-
0070, and 1625-0084

AGENCY: Coast Guard, DHS.

ACTION: Sixty-day notice requesting comments.

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SUMMARY: In compliance with the Paperwork Reduction Act of 1995, the
U.S. Coast Guard intends to submit Information Collection Requests
(ICRs) and Analyses to the Office of Management and Budget (OMB)
requesting an extension of its approval for the following collections
of information: (1) 1625-0009, Oil Record Book for Ships; (2) 1625-
0047, Plan Review and Records for Vital System Automation; (3) 1625-
0063, Marine Occupational Health and Safety Standards for Benzene--46
CFR 197 Subpart C; (4) 1625-0070, Vessel Identification System; and (5)
1625-0084, Audit Reports under the International Safety Management
Code. Before submitting these ICRs to OMB, the Coast Guard is inviting
comments as described below.

DATES: Comments must reach the Coast Guard on or before May 11, 2009.

ADDRESSES: To avoid duplicate submissions to the docket [USCG-2009-
0115], please use only one of the following means:
    (1) Online: http://www.regulations.gov.
    (2) Mail: Docket Management Facility (DMF) (M-30), U.S. Department
of Transportation (DOT), West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue, SE., Washington, DC 20590-0001.
    (3) Hand deliver: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is<PHONE_NUMBER>.
    (4) Fax:<PHONE_NUMBER>.
    The DMF maintains the public docket for this Notice. Comments and
material received from the public, as well as documents mentioned in
this Notice as being available in the docket, will become part of the
docket and will be available for inspection or copying at room W12-140
on the West Building Ground Floor, 1200 New Jersey Avenue, SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. You may also find the docket on the Internet
at http://www.regulations.gov.
    Copies of the ICRs are available through the docket on the Internet
at http://www.regulations.gov. Additionally, copies are available from
Commandant (CG-611), U.S. Coast Guard Headquarters, (Attn: Mr. Arthur
Requina), 2100 2nd Street SW., Washington, DC 20593-0001. The telephone
number is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Mr. Arthur Requina, Office of
Information Management, telephone<PHONE_NUMBER>, or fax<PHONE_NUMBER>,
for questions on these documents. Contact Ms. Renee V. Wright, Program
Manager, Docket Operations,<PHONE_NUMBER>, for questions on the docket.

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

    The Coast Guard invites comments on whether these ICRs should be
granted based on the collections being necessary for the proper
performance of Departmental functions. In particular, the Coast Guard
would appreciate comments addressing: (1) The practical utility of the
collections; (2) the accuracy of the estimated burden of the
collections; (3) ways to enhance the quality, utility, and clarity of
information subject to the collections; and (4) ways to minimize the
burden of the collections on respondents, including the use of
automated collection techniques or other forms of information
technology.
    We encourage you to respond to this request by submitting comments
and related materials. We will post all comments received, without
change, to http://www.regulations.gov. They will include any personal
information you provide. We have an agreement with DOT to use its DMF.
Please see the ``Privacy Act'' paragraph below.
    Submitting comments: If you submit a comment, please include the
docket number [USCG-2009-0115], indicate the specific section of the
document to which each comment applies, providing a reason for each
comment. We recommend you include your name, mailing address, an e-mail
address, or other contact information in the body of your document so
that we can contact you if we have questions regarding your submission.
You may submit your comments and material by electronic means, mail,
fax, or delivery to the DMF at the address under ADDRESSES; but please
submit them by only one means. If you submit them by mail or delivery,
submit them in an unbound format, no larger than 8\1/2\ by 11 inches,
suitable for copying and electronic filing. If you submit them by mail
and would like to know that they reached the Facility, please enclose a
stamped, self-addressed postcard or envelope. We will consider all
comments and material received during the comment period. We will
consider all comments and material received during the comment period
and will address them accordingly.
    Viewing comments and documents: Go to http://www.regulations.gov to
view documents mentioned in this Notice as being available in the
docket. Enter the docket number for this Notice [USCG-2009-0115] in the
Search box, and click ``Go >>.'' You may also visit the DMF in room
W12-140 on the West Building Ground Floor, 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
    Privacy Act: Anyone can search the electronic form of all comments
received in dockets by the name of the individual submitting the
comment (or signing the comment, if submitted on behalf of an
association, business, labor union, etc.). You may review the Privacy
Act Statement regarding our public dockets in the January 17, 2008
issue of the Federal Register (73 FR 3316).

Information Collection Request

    1. Title: Oil Record Book for Ships.
    OMB Control Number: 1625-0009.
    Summary: The Act to Prevent Pollution from Ships (APPS) and the

International Convention for Prevention of Pollution from Ships, 1973,
as modified by the 1978 Protocol relating thereto (MARPOL 73/78),
requires information about oil cargo or fuel operations be entered into
an Oil Record Book (CG-4602A). The requirement is contained in 33 CFR
151.25.
    Need: This information is used to verify sightings regarding actual
violations of the APPS to determine the level of compliance with MARPOL
73/78 and as a means of reinforcing the discharge provisions.
    Forms: CG-4602A.
    Respondents: Operators of vessels.
    Frequency: On occasion.
    Burden Estimate: The estimated burden has decreased from 26,993
hours to 19,425 hours a year.
    2. Title: Plan Review and Records for Vital System Automation.
    OMB Control Number: 1625-0047.
    Summary: This collection pertains to the vital system automation on
commercial vessels necessary to protecting personnel and property on
board U.S.-flag vessels.
    Need: Title 46 U.S.C. 3306 authorizes the Coast Guard to promulgate
regulations for the safety of personnel and property onboard vessels.
Title 46 CFR parts 52, 56, 58, 62, 110, 111, and 113 contain these
regulations.
    Forms: None.
    Respondents: Designers, manufacturers, and owners of vessels.
    Frequency: On occasion.
    Burden Estimate: The estimated burden has decreased from 65,400
hours to 60,000 hours a year.
    3. Title: Marine Occupational Health and Safety Standards for
Benzene--46 CFR part 197 subpart C.
    OMB Control Number: 1625-0063.
    Summary: To protect marine workers from exposure to toxic Benzene
vapor, the Coast Guard implemented Title 46 CFR part 197 subpart C.
    Need: This information collection is vital to verifying compliance.
    Forms: None.
    Respondents: Owners and operators of vessels.
    Frequency: On occasion.
    Burden Estimate: The estimated burden remains 59,766 hours a year.
    4. Title: Vessel Identification System.
    OMB Control Number: 1625-0070.
    Summary: The Coast Guard established a nationwide Vessel
Identification System (VIS) and centralized certain vessel
documentation functions. It provides participating States and
Territories with access to data/numbering of vessels. Participation in
VIS is voluntary.
    Need: Title 46 U.S.C. 12501 mandates the establishment of a VIS.
Title 33 CFR part 187 prescribe the requirements.
    Forms: None.
    Respondents: Governments of States and Territories.
    Frequency: Daily.
    Burden Estimate: The estimated burden has decreased from 5,829
hours to 5,456 hours a year.
    5. Title: Audit Reports under the International Safety Management
Code (ISM).
    OMB Control Number: 1625-0084.
    Summary: This information helps to determine whether U.S. vessels,
subject to SOLAS 74, engaged in international trade, are in compliance
with that treaty. Organizations recognized by the Coast Guard conduct
ongoing audits of vessels' and companies' safety management systems.
    Need: Title 46 U.S.C. 3203 authorizes the Coast Guard to prescribe
regulations regarding safety management systems. Title 33 CFR part 96
contains the rules for those systems; hence the safe operation of
vessels.
    Forms: None.
    Respondents: Owners and operators of vessels, and organizations
authorized to issue ISM Code certificates for the United States.
    Frequency: On occasion.
    Burden Estimate: The estimated burden has increased from 12,676
hours to 16,873 hours a year.

    Dated: March 2, 2009.
D.T. Glenn,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Command,
Control, Communications, Computers and Information Technology.
[FR Doc. E9-5380 Filed 3-11-09; 8:45 am]

BILLING CODE 4910-15-P


[Federal Register Volume 81, Number 222 (Thursday, November 17, 2016)]
[Notices]
[Pages 81189-81199]
[FR Doc No: 2016-27603]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79293; File No. SR-NYSEArca-2016-107]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 2 to, and Order Granting Accelerated Approval of, a
Proposed Rule Change, as Modified by Amendment No. 2 Thereto, Relating
To Listing and Trading of Shares of Cumberland Municipal Bond ETF under
NYSE Arca Equities Rule 8.600

DATE: November 10, 2016.

I. Introduction

    On July 26, 2016, NYSE Arca, Inc. filed with the Securities and
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade shares of the
Cumberland Municipal Bond ETF (``Fund'') under NYSE Arca Equities Rule
8.600. The proposed rule change was published for comment in the
Federal Register on August 15, 2016.\3\ On September 15, 2016, the
Exchange filed Amendment No. 1 to the proposed rule change.\4\ On
September 27, 2016, pursuant to Section 19(b)(2) of the Act,\5\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\6\ On November 8, 2016, the Exchange filed Amendment No. 2 to
the proposed rule change.\7\
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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. 78523 (Aug. 9,
2016), 81 FR 54155 (``Notice'').
    \4\ In Amendment No. 1, which amended and replaced the proposed
rule change in its entirety, the Exchange: (1) Described additional
diversification requirements that would apply to the Fund's holdings
in municipal bonds; (2) clarified the Fund's holdings in non-
exchange-traded investment company securities; and (3) corrected
certain references to the regular trading session of the Exchange.
Amendment No. 1 to the proposed rule change is available at: https://www.sec.gov/comments/sr-nysearca-2016-107/nysearca2016107-1.pdf.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 78949, 81 FR 68078
(Oct. 3, 2016). The Commission designated November 13, 2016, as the
date by which the Commission shall either approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \7\ In Amendment No. 2, which amended and replaced the proposed
rule change, as modified by Amendment No. 1 thereto, in its
entirety, the Exchange: (1) Described additional diversification
criteria that would apply to the Fund's holdings in municipal bonds;
and (2) clarified the Fund's holdings in non-exchange-traded or
other investment company securities. Amendment No. 2 to the proposed
rule change is available at: https://www.sec.gov/comments/sr-nysearca-2016-107/nysearca2016107.shtml.
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    The Commission has not received any comments on the proposed rule
change. The Commission is publishing this notice to solicit comments on
Amendment No. 2 from interested persons and is approving the proposed
rule change, as modified by Amendment No. 2 thereto, on an accelerated
basis.

II. The Exchange's Description of 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
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 shares (``Shares'') of the
following under NYSE Arca Equities Rule 8.600, which governs the
listing and trading of Managed Fund Shares: \8\ Cumberland Municipal
Bond ETF (the ``Fund''),\9\ a

series of the ETFis Series Trust I (``Trust'').\10\
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    \8\ 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-1) (``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.
    \9\ The Securities and Exchange Commission (``Commission'') has
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. 69591 (May 16, 2013), 78 FR 30372 (May 22, 2013) (SR-
NYSEArca-2013-33) (order approving Exchange listing and trading of
International Bear ETF); 69061 (March 7, 2013), 78 FR 15990 (March
13, 2013) (SR-NYSEArca-2013-01) (order approving Exchange listing
and trading of Newfleet Multi-Sector Income ETF). The Commission has
approved for Exchange listing and trading shares of two actively
managed funds of the PIMCO ETF Trust that principally hold municipal
bonds. See Securities Exchange Act Release No. 60981 (November 10,
2009), 74 FR 59594 (November 18, 2009) (SR-NYSEArca-2009-79) (order
approving listing and trading of shares of the PIMCO Short-Term
Municipal Bond Strategy Fund and PIMCO Intermediate Municipal Bond
Strategy Fund). The Commission also has approved listing and trading
on the Exchange of shares of the SPDR Nuveen S&P High Yield
Municipal Bond Fund under Commentary .02 of NYSE Arca Equities Rule
5.2(j)(3). See Securities Exchange Act Release No.63881 (February 9,
2011), 76 FR 9065 (February 16, 2011) (SR-NYSEArca-2010-120).
    \10\ The Trust is registered under the 1940 Act. On May 20,
2015, the Trust filed with the Commission an amendment to its
registration statement on Form N-1A under the Securities Act of 1933
(15 U.S.C. 77a) (``Securities Act''), and under the 1940 Act
relating to the Fund (File Nos. 333-187668 and 811-22819)
(``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. 30607 (July 23, 2013) (File No.
812-14080) (``Exemptive Order''). This Amendment No. 2 to SR-
NYSEArca-2016-107 replaces SR-NYSEArca-2016-107 as originally filed
and Amendment No. 1 thereto and supersedes such filings in their
entirety.
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    The investment adviser to the Fund will be Virtus ETF Advisers LLC
(the ``Adviser''). The Fund's sub-adviser will be Cumberland Advisors
Inc. (``Sub-Adviser''). Virtus ETF Solutions LLC will serve as the
Fund's operational administrator. ETF Distributors LLC will serve as
the distributor (the ``Distributor'') of Fund Shares on an agency
basis. The Bank of New York Mellon (the ``Administrator'') will serve
as the administrator, custodian, transfer agent and fund accounting
agent for the Fund.
    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.\11\ 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. The Adviser and
Sub-Adviser are not registered as broker-dealers. The Adviser (but not
the Sub-Adviser) is affiliated with one or more broker-dealers and the
Adviser has implemented and will maintain a fire wall with respect to
each such broker-dealer affiliate regarding access to information
concerning the composition and/or changes to the portfolio. In the
event (a) the Adviser or Sub-Adviser become registered broker-dealers
or newly affiliated with a broker-dealer, or (b) any new adviser or
sub-adviser is a registered broker-dealer or becomes affiliated with a
broker-dealer, it will implement a fire wall with respect to its
relevant personnel or its broker-dealer affiliate 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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    \11\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and Sub-Adviser and their 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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Description of the Fund
Principal Investments
    According to the Registration Statement, the Fund will seek to
provide a competitive level of current income exempt from federal
income tax, while preserving capital. The Fund, under normal market
conditions,\12\ will invest at least eighty percent (80%) of the Fund's
net assets in debt securities whose interest is, in the opinion of bond
counsel for the issuer at the time of issuance, exempt from U.S.
federal income tax (``Municipal Bonds''). The Sub-Adviser will invest
the Fund's assets using a barbell strategy, which means that the Sub-
Adviser will overweight the Fund's investments in Municipal Bonds with
maturities on the short and long ends of the fixed income yield curve,
while underweighting exposure to Municipal Bonds with intermediate
maturities.
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    \12\ The term ``normal market conditions'' is defined in NYSE
Arca Equities Rule 8.600(c)(5).
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    According to the Registration Statement, Municipal Bonds in which
the Fund may invest include one or more of the following:
     General obligation bonds, which are typically backed by
the full faith, credit, and taxing power of the issuer;
     revenue bonds, which are typically secured by revenues
generated by the issuer;
     discount bonds, which may be originally issued at a
discount to par value or sold at market price below par value;
     premium bonds, which are sold at a premium to par value;
     zero coupon bonds, which are issued at an original issue
discount, with the full value, including accrued interest, paid at
maturity; and
     private activity bonds, which are typically issued by or
on behalf of local or state government for the purpose of financing the
project of a private user.
    The Fund will have no target duration for its investment portfolio,
and the Sub-Adviser may target a shorter or longer average portfolio
duration based on the Sub-Adviser's forecast of interest rates and view
of fixed-income markets generally.\13\ The Sub-Adviser will generally
apply a heavier weight toward Municipal Bonds with shorter maturities
during periods of high interest rates and longer maturities during
periods of lower interest rates. At least 80% of the weight of the
Fund's assets will be in Municipal Bonds with a modified duration of 15
years or less.
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    \13\ Duration measures the interest rate sensitivity of a debt
security by assessing and weighting the present value of the
security's payment pattern. Generally, the longer the maturity, the
greater the duration and, therefore, the greater effect interest
rate changes have on the price of the security.
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    With respect to credit quality, under normal market conditions, at
least 90% of the Fund's assets invested in Municipal Bonds will be in
Municipal Bonds rated ``A'' or better by at least one major credit
rating agency or, if unrated, deemed to be of comparable quality in the
Adviser's opinion. From time to time, the Fund may concentrate in
particular sectors; however, the Fund's investments will be diversified
among a minimum of ten distinct Municipal Bond sectors.\14\ In
addition, the Fund will limit its investments in Municipal Bonds in any
single sector to 25% of the Fund's assets. The Fund may sell
investments for a variety of reasons, such as to adjust the portfolio's
average maturity, duration, or overall credit quality, or to shift
assets into and out of higher-yielding or lower-yielding securities or
certain sectors.
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    \14\ The Fund's investments in Municipal Bonds will include
investments in state and local (e.g., county, city, town) Municipal
Bonds relating to such sectors as the following: Dedicated tax;
public power; tax increment; toll road; port revenue; airport
revenue; water revenue; sewer revenue; higher education (colleges
and universities); wastewater revenue; school districts; sales tax
revenue; and pre-refunded bonds.
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    Under normal market conditions, each Municipal Bond held by the
Fund

must be a constituent of a deal where the deal's original offering
amount was at least $100 million. The Fund will hold a minimum of 75
different Municipal Bonds. No Municipal Bond held by the Fund will
exceed 4% of the weight of the Fund's portfolio and no single Municipal
Bond issuer will account for more than 10% of the weight of the Fund's
portfolio. The Fund will hold Municipal Bonds of a minimum of 40 non-
affiliated issuers diversified among issuers in at least 20 different
states, with no more than 30% of the Fund's assets comprised of
Municipal Bonds that provide exposure to any single state.\15\
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    \15\ For purposes of this restriction, each state and each
separate political subdivision, agency, authority, or
instrumentality of such state, each multi-state agency or authority,
and each guarantor, if any, will be treated as separate issuers of
Municipal Bonds.
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    According to the Registration Statement, under normal market
conditions, at least 80% of the Fund's income will be exempt from
federal income taxes. However, a significant portion of the Fund's
income could be derived from securities subject to the alternative
minimum tax.
Other Investments
    While the Fund, under normal market conditions, will invest at
least eighty percent (80%) of its assets in Municipal Bonds, as
described above, the Fund may invest its remaining assets in other
assets and financial instruments, as described below.
    The Fund may invest in equity securities, both directly and
indirectly through investment in shares of exchange-traded funds
(``ETFs''),\16\ money market funds, and other types of securities and
instruments described below. The equity portion of the Fund's portfolio
may include common stocks traded on securities exchanges or in the
over-the-counter (``OTC'') market. In addition to common stocks, the
equity portion of the Fund's portfolio may also include exchange-traded
and OTC preferred stocks, and exchange-traded and OTC warrants.\17\
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    \16\ The ETFs in which the Fund may invest will be registered
under the 1940 Act and include 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). Such ETFs all will be listed and traded in the U.S. on
registered exchanges.
    \17\ With respect to its exchange-traded equity securities
investments, the Fund will normally invest in equity securities that
are listed and traded on a U.S. exchange or in markets that are
members of the Intermarket Surveillance Group (``ISG'') or parties
to a comprehensive surveillance sharing agreement with the Exchange.
In any case, not more than 10% of the net assets of the Fund in the
aggregate invested in equity securities (except for money market
funds) will consist of equity securities whose principal market is
not a member of ISG or a market with which the Exchange does not
have a comprehensive surveillance sharing agreement. See note 34,
infra.
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    The Fund may purchase taxable municipal bonds when the Sub-Adviser
believes they offer opportunities for the Fund, or variable rate demand
notes (VRDNs) that pay interest monthly or quarterly based on a
floating rate that is reset daily or weekly based on an index of short-
term municipal rates.
    The Fund may invest in exchange-traded and OTC securities
convertible into common stock. Such securities are the following:
Convertible bonds and convertible preferred stocks.\18\
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    \18\ The criteria in note 16 above also will apply to exchange-
traded convertible preferred stocks and exchange-traded stocks into
which convertible bonds may be converted.
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    The Fund may invest directly and indirectly in cash equivalents,
namely, money market instruments that are the following: U.S.
Government obligations or corporate debt obligations (including those
subject to repurchase agreements); banker's acceptances \19\ and
certificates of deposit \20\ of domestic branches of banks, commercial
paper,\21\ and master notes.\22\
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    \19\ Banker's acceptances are time drafts drawn on and
``accepted'' by a bank. When a bank ``accepts'' such a time draft,
it assumes liability for its payment. When the Fund acquires a
banker's acceptance, the bank that ``accepted'' the time draft is
liable for payment of interest and principal when due. The banker's
acceptance carries the full faith and credit of such bank.
    \20\ A certificate of deposit is an unsecured, interest bearing
debt obligation of a bank.
    \21\ Commercial paper is an unsecured, short-term debt
obligation of a bank, corporation, or other borrower. Commercial
paper maturity generally ranges from two to 270 days and is usually
sold on a discounted basis rather than as an interest-bearing
instrument. The Fund will invest directly in commercial paper only
if it is rated in one of the top two rating categories by Moody's,
S&P or Fitch or, if not rated, is of equivalent quality in the
Adviser's opinion. Commercial paper may include master notes of the
same quality. Master notes are unsecured obligations which are
redeemable upon demand of the holder and which permit the investment
of fluctuating amounts at varying rates of interest.
    \22\ Master notes may be acquired by the Fund through the master
note program of the Fund's custodian bank.
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    In order to maintain sufficient liquidity, to implement investment
strategies or for temporary defensive purposes, the Fund may invest a
significant portion of its assets in shares of one or more money market
funds. Generally, money market mutual funds are registered investment
companies that seek to earn income consistent with the preservation of
capital and maintenance of liquidity by investing primarily in high
quality money market instruments.
    The Fund may invest in compliance with Section 12(d)(1)(E), (F) and
(G) of the 1940 Act and the rules thereunder.\23\
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    \23\ 15 U.S.C. 80a-12(d)(1)(E), (F) and (G).
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    The Fund may write U.S. exchange-traded call and put options on
securities, ETFs or security indexes to seek income or may purchase or
write U.S. exchange-traded put or call options for hedging purposes.
    The Fund may purchase securities on a when-issued basis or for
settlement at a future date (forward commitment) if the Fund holds
sufficient liquid assets to meet the purchase price.
    Additionally, the Trust, on behalf of the Fund, has claimed an
exclusion from the definition of the term ``commodity pool operator''
pursuant to Rule 4.5 under the Commodity Exchange Act, as amended (the
``CEA''). Therefore, the Fund is not subject to regulation or
registration as a commodity pool operator under the CEA.
Investment Restrictions
    The Fund may, from time to time, take temporary defensive positions
that are inconsistent with its principal investment strategies in an
attempt to respond to adverse market, economic, political or other
conditions. In such circumstances, the Fund may also hold up to 100% of
its portfolio in cash and cash equivalent positions.
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
consistent with Commission guidance. 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.\24\
---------------------------------------------------------------------------

    \24\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the 1933 Act).

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

    The Fund will seek to qualify for treatment as a regulated
investment company under the Internal Revenue Code of 1986.\25\
---------------------------------------------------------------------------

    \25\ 26 U.S.C. 851.
---------------------------------------------------------------------------

    The Fund's investments will be consistent with its investment
objective and will not be used to provide multiple returns of a
benchmark or to produce leveraged returns.
Creation and Redemption of Shares
    According to the Registration Statement, the Trust will issue and
sell Shares of the Fund only in ``Creation Units'' on a continuous
basis through the Distributor, at their net asset value (``NAV'') next
determined after receipt, on any business day, for an order received in
proper form. All orders to create Creation Units must be placed for one
or more Creation Unit size aggregations of Shares (50,000 Shares per
Creation Unit). The Creation Unit size is subject to change. Cash
creations will be the default mechanism for creation of Shares.
    However, the Fund will retain the ability to utilize an in-kind
mechanism for creation of Shares, upon approval of the Distributor. In
such case, the consideration for purchase of a Creation Unit of the
Fund generally will consist of an in-kind deposit of ``Deposit
Securities'' for each Creation Unit constituting a substantial
replication, or a representation, of the securities included in the
Fund's portfolio and a ``Cash Component'' computed as described below.
Together, the Deposit Securities and the Cash Component constitute the
``Fund Deposit'', which represents the minimum initial and subsequent
investment amount for a Creation Unit of the Fund. The 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. If the
Cash Component is a positive number (i.e., the NAV per Creation Unit
exceeds the market value of the Deposit Securities), the Cash Component
will 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), the Cash Component will be such negative
amount, and the creator will be entitled to receive cash from the Fund
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.
    The Administrator, through the National Securities Clearing
Corporation (``NSCC''), will make available on each business day,
immediately prior to the opening of business on the Exchange (currently
9:30 a.m., Eastern Time), the list of the names and the required number
of Shares of each Deposit Security to be included in the current Fund
Deposit (based on information at the end of the previous business day)
for the Fund. Such Fund Deposit will be applicable, subject to any
adjustments as described below, in order to effect creations of
Creation Units of the Fund until such time as the next-announced
composition of the Deposit Securities is made available.
    The identity and number of Shares of the Deposit Securities
required for the Fund Deposit for the Fund will change as rebalancing
adjustments and corporate action events occur from time to time. In
addition, the Trust reserves the right to permit or require the
substitution of an amount of cash--i.e., a ``cash in lieu'' amount--to
be added to the Cash Component to replace any Deposit Security that may
not be available in sufficient quantity for delivery, that may not be
eligible for transfer or that may not be eligible for trading by an
``Authorized Participant'' (as described below) or the investor for
which it is acting.
    In addition to the list of names and numbers of securities
constituting the current Deposit Securities of the Fund Deposit, the
Administrator, through NSCC, also will make available on each business
day the estimated Cash Component, effective through and including the
previous business day, per outstanding Creation Unit of the Fund.
Procedures for Creation of Creation Units
    To be eligible to place orders to create a Creation Unit of the
Fund, an entity must be (i) a ``Participating Party'', i.e., a broker-
dealer or other participant in the clearing process through the
Continuous Net Settlement System of NSCC (the ``Clearing Process'') or
a clearing agency that is registered with the Commission, or (ii) a
Depositary Trust Company (``DTC'') Participant and, in each case, must
have executed an agreement with the Trust, the Distributor and the
Administrator with respect to creations and redemptions of Creation
Units (``Participant Agreement''). A Participating Party and DTC
Participant are collectively referred to as an ``Authorized
Participant''.
    All orders to create Creation Units must be received by the
Distributor no later than the close of the Core Trading Session on the
Exchange (ordinarily 4:00 p.m., Eastern Time), in each case on the date
such order is placed in order for the creation of Creation Units to be
effected based on the NAV of Shares of the Fund as next determined on
such date after receipt of the order in proper form.
Redemption of Creation Units
    Shares may be redeemed only in Creation Units at their NAV next
determined after receipt of a redemption request in proper form by the
Distributor and the Fund through the Administrator and only on a
business day. Cash redemptions will be the default mechanism for
redemptions of Shares.
    However, the Fund will retain the ability to utilize an in-kind
mechanism for redemption of Shares, upon approval of the Distributor.
In such case, the redemption proceeds for a Creation Unit generally
consist of Deposit Securities, as announced by the Administrator 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 Deposit Securities (the ``Cash
Redemption Amount''), less a redemption transaction fee. In the event
that the Deposit Securities have a value greater than the NAV of the
Shares, a compensating cash payment equal to the differential is
required to be made by or through an Authorized Participant by the
redeeming shareholder.
    With respect to the Fund, the Administrator, through NSCC, will
make available immediately prior to the opening of business on the
Exchange (currently 9:30 a.m., Eastern Time) on each business day, the
Deposit Securities that will be applicable (subject to possible
amendment or correction) to redemption requests received in proper form
on that day. Deposit Securities received on redemption may not be
identical to Deposit Securities which are applicable to creations of
Creation Units.
    If it is not possible to effect deliveries of the Deposit
Securities, the Trust may in its discretion exercise its option to
redeem such shares in cash, and the redeeming beneficial owner will be
required to receive its redemption proceeds in cash. In addition, an
investor may request a redemption in

cash which the Fund may, in its sole discretion, permit.\26\ In either
case, the investor will receive a cash payment equal to the NAV of its
Shares based on the NAV of Shares of the Fund next determined after the
redemption request is received in proper form (minus a redemption
transaction fee and additional charge for requested cash redemptions,
to offset the Trust's brokerage and other transaction costs associated
with the disposition of Deposit Securities).
---------------------------------------------------------------------------

    \26\ The Adviser represents that, to the extent the Trust
effects the creation or redemption of Shares in cash, such
transactions will be effected in the same manner for all Authorized
Participants.
---------------------------------------------------------------------------

    The right of redemption may be suspended or the date of payment
postponed with respect to the Fund (1) for any period during which the
Exchange is closed (other than customary weekend and holiday closings);
(2) for any period during which trading on the Exchange is suspended or
restricted; (3) for any period during which an emergency exists as a
result of which disposal of the Shares of the Fund or determination of
the Shares' NAV is not reasonably practicable; or (4) in such other
circumstance as is permitted by the Commission.
Net Asset Value
    The NAV per Share for the Fund will be computed by dividing the
value of the net assets of the 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 fee, will be accrued daily and taken into account for
purposes of determining NAV. The NAV of the Fund will be determined as
of the close of the Core Trading Session on the Exchange (ordinarily
4:00 p.m., Eastern Time) on each day that the Exchange is open. 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.
    The pricing and valuation of portfolio securities will be
determined in good faith in accordance with procedures approved by, and
under the direction of, the Trust's Board of Trustees (``Board''). In
determining the value of the Fund's assets, equity securities will be
generally valued at market using quotations from the primary market in
which they are traded. Debt securities (other than short-term
investments) will be valued on the basis of broker quotes or valuations
provided by a pricing service, which in determining value will utilize
information regarding recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities. Other assets, such as accrued interest, accrued dividends
and cash also will be included in determining the NAV. The Fund
normally will use third party pricing services to obtain portfolio
security prices.
    Municipal Bonds, money market instruments, convertible bonds,
taxable municipal bonds, and VRDNs will generally be valued at bid
prices received from independent pricing services as of the announced
closing time for trading in fixed-income instruments in the respective
market.
    Exchange-traded equity securities, including common stocks, ETFs,
preferred stocks, convertible preferred stocks and warrants, will be
valued at market value, which will generally be determined using the
last reported official closing or last trading price on the exchange or
market on which the security is primarily traded at the time of
valuation or, if no sale has occurred, at the last quoted bid price on
the primary market or exchange on which they are traded. If market
prices are unavailable or the Fund believes that they are unreliable,
or when the value of a security has been materially affected by events
occurring after the relevant market closes, the Fund will price those
securities at fair value as determined in good faith using methods
approved by the Trust's Board.
    Equity securities traded in the OTC market, including common
stocks, preferred stocks, and warrants, will be valued at the last
reported sale price on the valuation date. OTC traded convertible
preferred stocks will be valued based on price quotations obtained from
a broker-dealer who makes markets in such securities or other
equivalent indications of value provided by a third-party pricing
service. Securities of money market funds will be valued at NAV.
    Option contracts will be valued at their most recent sale price on
the applicable exchange. If no such sales are reported, these contracts
will be valued at their most recent bid price.
    To the extent the assets of the Fund are invested in other open-end
investment companies that are registered under the 1940 Act, the Fund's
NAV will be calculated based upon the NAVs reported by such registered
open-end investment companies.
    Securities and assets for which market quotations are not readily
available or which cannot be accurately valued using the Fund's normal
pricing procedures will be valued by the Trust's Fair Value Pricing
Committee at fair value as determined in good faith under policies
approved by the Board. Fair value pricing may be used, for example, in
situations where (i) portfolio securities, such as securities with
small capitalizations, are so thinly traded that there have been no
transactions for that security over an extended period of time; (ii) an
event occurs after the close of the exchange on which a portfolio
security is principally traded that is likely to change the value of
the portfolio security prior to the Fund's NAV calculation; (iii) the
exchange on which the portfolio security is principally traded closes
early; or (iv) trading of the particular portfolio security is halted
during the day and does not resume prior to the Fund's NAV calculation.
The Board will monitor and evaluate the Fund's use of fair value
pricing, and periodically reviews the results of any fair valuation
under the Trust's policies.
Availability of Information
    The Fund's Web site (www.cumberetfs.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The Fund's Web
site will include additional quantitative information updated on a
daily basis, including, for the Fund, (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 (the ``Bid/Ask
Price''),\27\ 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
(ordinarily 9:30 a.m., Eastern Time), the Fund's Web site will disclose
the Disclosed Portfolio that will form the basis for the Fund's
calculation of NAV at the end of the business day.\28\
---------------------------------------------------------------------------

    \27\ The Bid/Ask Price of the Fund's Shares will be determined
using the mid-point of the highest bid and the lowest offer on the
Exchange as of the time of calculation of the Fund's NAV. The
records relating to Bid/Ask Prices will be retained by the Fund and
its service providers.
    \28\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Fund
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.

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

    The Fund 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); the
identity of the security, 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.
    In addition, a basket composition file, which includes the security
names and share quantities, if applicable, required to be delivered in
exchange for the Fund's Shares, together with estimates and actual cash
components, will be publicly disseminated daily prior to the opening of
the Exchange via the NSCC. The basket represents one Creation Unit of
the Fund. The NAV of Shares of the Fund will normally be determined as
of the close of the Core Trading Session on the Exchange (ordinarily
4:00 p.m., Eastern Time) on each business day. Authorized Participants
may refer to the basket composition file for information regarding
securities and financial instruments that may comprise the Fund's
basket on a given day.
    The approximate value of the Fund's investments on a per-Share
basis, the Indicative Intra-Day Value (``IIV''), will be disseminated
every 15 seconds during the Exchange Core Trading Session (ordinarily
9:30 a.m. to 4:00 p.m., Eastern Time). The IIV should not be viewed as
a ``real-time'' update of NAV because the IIV will be calculated by an
independent third party and may not be calculated in the exact same
manner as NAV, which will be computed daily.
    The IIV for the Fund will be calculated by dividing the ``Estimated
Fund Value'' as of the time of the calculation by the total number of
outstanding Shares. ``Estimated Fund Value'' is the sum of the
estimated amount of cash held in the Fund's portfolio, the estimated
amount of accrued interest owing to the Fund and the estimated value of
the securities held in the Fund's portfolio, minus the estimated amount
of the Fund's liabilities. The IIV will be calculated based on the same
portfolio holdings disclosed on the Fund's Web site. In determining the
estimated value for each of the component securities, the IIV will use
last sale, market prices or other methods that would be considered
appropriate for pricing securities held by registered investment
companies.
    Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's shareholder reports, and its Form N-
CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder
Reports will be 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 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 and the
underlying U.S. exchange-traded equity securities will be available via
the Consolidated Tape Association (``CTA'') high-speed line, and from
the national securities exchange on which they are listed. Price
information regarding non-U.S. exchange-traded equity securities held
by the Fund will be available from the exchanges trading such assets.
    Quotation information from brokers and dealers or pricing services
will be available for Municipal Bonds, taxable municipal bonds,
convertible bonds, OTC traded convertible preferred stocks, corporate
debt obligations, VRDNs, and cash equivalents. Price information for
money market funds will be available from the applicable investment
company's Web site and from market data vendors. Intra-day and closing
price information for OTC equity securities will be available from
major market data vendors. Pricing information regarding each asset
class in which the Fund will invest will generally be available through
nationally recognized data service providers through subscription
agreements. Quotation and last sale information for exchange-traded
options will be available via the Options Price Reporting Authority and
from the applicable U.S. options exchange. In addition, the IIV, (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.\29\ The dissemination of the IIV, together with the
Disclosed Portfolio, will allow investors to determine the value of the
underlying portfolio of the Fund on a daily basis and will provide a
close estimate of that value throughout the trading day.
---------------------------------------------------------------------------

    \29\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available IIVs
taken from CTA or other data feeds.
---------------------------------------------------------------------------

Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\30\ 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. 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 Fund;
or (2) whether other unusual conditions or circumstances detrimental to
the maintenance of a fair and orderly market are present. Trading in
the Shares 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.
---------------------------------------------------------------------------

    \30\ 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.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. Consistent with NYSE Arca
Equities Rule 8.600(d)(2)(B)(ii), the Adviser will 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 Fund's portfolio. The Exchange represents
that, for initial and/or continued listing, the Fund will be in
compliance with Rule 10A-3 \31\ under the Act, as provided by NYSE Arca
Equities Rule 5.3. A minimum of 100,000 Shares will be outstanding at
the commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
\32\ as defined in NYSE Arca Equities Rule 8.600(c)(2) will be made
available to all market participants at the same time. The Fund's
investments will be consistent with the Fund's investment objective and
will not be used to enhance leverage.
---------------------------------------------------------------------------

    \31\ 17 CFR 240.10A-3.
    \32\ The term ``Disclosed Portfolio'' is defined in NYSE Arca
Equities Rule 8.600(c)(2).
---------------------------------------------------------------------------

Surveillance
    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.
The Exchange represents that these procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and federal securities
laws applicable to trading on the Exchange.\33\
---------------------------------------------------------------------------

    \33\ 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 surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. 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.\34\
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    \34\ 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.
---------------------------------------------------------------------------

    FINRA, on behalf of the Exchange, or regulatory staff of the
Exchange, will communicate as needed regarding trading in the Shares,
options and certain exchange-traded equity securities with other
markets and other entities that are members of the ISG, and FINRA, on
behalf of the Exchange, or regulatory staff of the Exchange, may obtain
trading information regarding trading in the Shares, options and
certain exchange-traded equity securities from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares, options and certain exchange-traded equity
securities from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement. In addition, 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 (``TRACE''). FINRA also can access data obtained from
the Municipal Securities Rulemaking Board (``MSRB'') relating to
municipal bond trading activity for surveillance purposes in connection
with trading in the Shares.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
    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 of the Fund 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. 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).
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit 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 Equity Trading Permit 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 IIV will not be calculated or publicly
disseminated; (4) how information regarding the IIV and the Disclosed
Portfolio is disseminated; (5) the requirement that Equity Trading
Permit 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 Fund is 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 Act. The
Bulletin will also disclose that the NAV for the Shares will be
calculated after 4:00 p.m., Eastern Time each trading day.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \35\ 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.
---------------------------------------------------------------------------

    \35\ 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. FINRA, on behalf of the Exchange,
or regulatory staff of the Exchange, will communicate as needed
regarding trading in the Shares, options and certain exchange-traded
equity securities with other markets and other entities that are
members of the ISG, and FINRA, on behalf of the Exchange, or regulatory
staff of the Exchange, may obtain trading information regarding trading
in the Shares, options and certain exchange-traded equity securities
from such markets and other entities. In addition, the Exchange may
obtain information regarding trading in

the Shares, options and certain exchange-traded equity securities from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
In addition, 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 TRACE. 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. The Fund may not
purchase or hold illiquid assets if, in the aggregate, more than 15% of
its net assets would be invested in illiquid assets. The Adviser and
Sub-Adviser are not registered as broker-dealers but the Adviser is
affiliated with one or more broker-dealers and has implemented and will
maintain a fire wall with respect to each such broker-dealer affiliate
regarding access to information concerning the composition and/or
changes to the portfolio. The Fund's investments in Municipal Bonds
will be well-diversified in that, under normal market conditions, the
Fund will hold a minimum of 75 different Municipal Bonds; no Municipal
Bond held by the Fund will exceed 4% of the weight of the Fund's
portfolio; no single Municipal Bond issuer will account for more than
10% of the weight of the Fund's portfolio; and the Fund will hold
Municipal Bonds of a minimum of 40 non-affiliated issuers, diversified
among issuers in at least 20 different states, with no more than 30% of
the Fund's assets comprised of Municipal Bonds that provide exposure to
any single state. In addition, each Municipal Bond held by the Fund
must be a constituent of a deal where the deal's original offering
amount was at least $100 million. The Fund's investments will be
diversified among a minimum of ten distinct Municipal Bond sectors and
the Fund will limit its investments in Municipal Bonds in any single
sector to 25% of the Fund's assets.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information is publicly available regarding the Fund and the Shares,
thereby promoting market transparency. Quotation and last sale
information for the Shares and the underlying U.S. exchange-traded
equity securities will be available via the CTA high-speed line, and
from the national securities exchange on which they are listed. The
Fund 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); the identity of the
security, 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. Moreover, prior to
the commencement of trading, the Exchange will inform its Equity
Trading Permit Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares. Trading
in Shares of the Fund 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. 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 Fund may be halted. In
addition, as noted above, investors will have ready access to
information regarding the Fund's holdings, the IIV, 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
an additional type of actively-managed exchange-traded product that
principally holds municipal bonds and that will enhance competition
among market participants, to the benefit of investors and the
marketplace. As noted above, the Exchange has in place surveillance
procedures relating to trading in the Shares and may obtain information
via ISG from other exchanges that are members of ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement. In addition, as noted above, investors will have ready
access to information regarding the Fund's holdings, the IIV, 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 purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of an
additional type of actively-managed exchange-traded product that
principally holds municipal bonds and that will enhance competition
among market participants, to the benefit of investors and the
marketplace.

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

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

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 Act and
the rules and regulations thereunder applicable to a national
securities exchange.\36\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\37\
which requires, among other things, that the Exchange's rules be
designed to prevent fraudulent and manipulative acts and practices,
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.
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    \36\ 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).
    \37\ 15 U.S.C. 78f(b)(5).
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    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 Act,\38\ which sets forth Congress' finding that it is in the
public interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities. Quotation and last-sale
information for the Shares and the underlying U.S. exchange-traded
equity securities will be available via the CTA high-speed line, and
from the

national securities exchange on which they are listed.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The approximate value of the Fund's investments on a per-Share
basis, the IIV (which is the Portfolio Indicative Value, as defined in
NYSE Arca Equities Rule 8.600(c)(3)), will be disseminated every 15
seconds during the Exchange Core Trading Session (ordinarily 9:30 a.m.
to 4:00 p.m., Eastern Time) by one or more major market data
vendors.\39\ On each business day, before commencement of trading in
Shares in the Core Trading Session on the Exchange (ordinarily 9:30
a.m., Eastern Time), the Fund's Web site will disclose the Disclosed
Portfolio that will form the basis for the Fund's calculation of NAV at
the end of the business day.\40\ In addition, a basket composition
file, which includes the security names and share quantities, if
applicable, required to be delivered in exchange for the Fund's Shares,
together with estimates and actual cash components, will be publicly
disseminated daily prior to the opening of the Exchange via the NSCC.
The basket represents one Creation Unit of the Fund. The NAV of Shares
of the Fund will normally be determined as of the close of the Core
Trading Session on the Exchange (ordinarily 4:00 p.m., Eastern Time) on
each business day. Authorized Participants may refer to the basket
composition file for information regarding securities and financial
instruments that may comprise the Fund's basket on a given day.
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    \39\ The Exchange represents that several major market data
vendors display and/or make widely available IIVs taken from CTA or
other data feeds. According to the Exchange, the IIV for the Fund
will be calculated by dividing the ``Estimated Fund Value'' as of
the time of the calculation by the total number of outstanding
Shares. ``Estimated Fund Value'' is the sum of the estimated amount
of cash held in the Fund's portfolio, the estimated amount of
accrued interest owing to the Fund, and the estimated value of the
securities held in the Fund's portfolio, minus the estimated amount
of the Fund's liabilities. The IIV will be calculated based on the
same portfolio holdings disclosed on the Fund's Web site. In
determining the estimated value for each of the component
securities, the IIV will use last sale, market prices, or other
methods that would be considered appropriate for pricing securities
held by registered investment companies.
    \40\ The Fund 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);
the identity of the security, 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.
---------------------------------------------------------------------------

    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. In addition, price information regarding non-
U.S. exchange-traded equity securities held by the Fund will be
available from the exchanges trading such assets. Quotation information
from brokers and dealers or pricing services will be available for
Municipal Bonds, taxable municipal bonds, convertible bonds, OTC traded
convertible preferred stocks, corporate debt obligations, VRDNs, and
cash equivalents. Price information for money market funds will be
available from the applicable investment company's Web site and from
market data vendors. Intra-day and closing price information for OTC
equity securities will be available from major market data vendors.
Pricing information regarding each asset class in which the Fund will
invest will generally be available through nationally recognized data
service providers through subscription agreements. Quotation and last-
sale information for exchange-traded options will be available via the
Options Price Reporting Authority and from the applicable U.S. options
exchange. The Fund's Web site 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 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. Trading in Shares of the Fund 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,\41\ and trading in the Shares will be subject to NYSE Arca
Equities Rule 8.600(d)(2)(D), which sets forth additional circumstances
under which Shares of the Fund may be halted.
---------------------------------------------------------------------------

    \41\ These reasons may include: (1) The extent to which trading
is not occurring in the securities or financial instruments
comprising 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. With respect to trading
halts, the Exchange may consider all relevant factors in exercising
its discretion to halt or suspend trading in the Shares of the Fund.
---------------------------------------------------------------------------

    The Exchange represents that it has a general policy prohibiting
the distribution of material, non-public information by its employees.
In addition, Commentary .06 to NYSE Arca Equities Rule 8.600 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, non-public information regarding
the open-end fund's portfolio. The Exchange represents that the Adviser
and Sub-Adviser are not registered as broker-dealers; however, the
Adviser (but not the Sub-Adviser) is affiliated with one or more
broker-dealers, and the Adviser has implemented and will maintain a
fire wall with respect to each such broker-dealer affiliate regarding
access to information concerning the composition of, or changes to, the
portfolio.\42\
---------------------------------------------------------------------------

    \42\ See supra note 11.
---------------------------------------------------------------------------

    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit Holders in a 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 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.\43\ The Commission believes that the Exchange's
initial and continued listing requirements, combined with the Fund's
investment criteria that would apply to Municipal Bonds in the
portfolio, are designed to mitigate the potential for price
manipulation of the Shares.
---------------------------------------------------------------------------

    \43\ The Exchange states that FINRA surveils trading on the
Exchange pursuant to a regulatory services agreement and that the
Exchange is responsible for FINRA's performance under this
regulatory services agreement. See supra note 33.
---------------------------------------------------------------------------

    The Exchange represents that it deems the Shares to be equity
securities, thus rendering the trading of the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
    In support of this proposal, the Exchange has made the following
additional 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 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.
The Exchange represents that these procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and federal securities
laws applicable to trading on the Exchange. These surveillances focus
on detecting securities trading outside their normal patterns, which
could be indicative of manipulative or other violative activity. 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.
    (4) FINRA, on behalf of the Exchange, or regulatory staff of the
Exchange, will communicate as needed regarding trading in the Shares,
options, and certain exchange-traded equity securities with other
markets and other entities that are members of the ISG, and FINRA, on
behalf of the Exchange, or regulatory staff of the Exchange, may obtain
trading information regarding trading in the Shares, options, and
certain exchange-traded equity securities from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares, options, and certain exchange-traded equity
securities from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement. In addition, 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
Municipal Securities Rulemaking Board relating to municipal bond
trading activity for surveillance purposes in connection with trading
in the Shares.
    (5) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit Holders in a Bulletin of the special
characteristics and risks associated with trading the Shares.
Specifically, the Bulletin will discuss the following: (a) The
procedures for purchases and redemptions of Shares in Creation Unit
aggregations (and that Shares are not individually redeemable); (b)
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence
on its Equity Trading Permit Holders to learn the essential facts
relating to every customer prior to trading the Shares; (c) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated IIV will not be calculated or publicly
disseminated; (d) how information regarding the IIV and the Disclosed
Portfolio is disseminated; (e) the requirement that Equity Trading
Permit Holders deliver a prospectus to investors purchasing newly
issued Shares prior to or concurrently with the confirmation of a
transaction; and (f) trading information. The Bulletin will also
discuss any exemptive, no-action, and interpretive relief granted by
the Commission from any rules under the Act.
    (6) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Act.\44\
---------------------------------------------------------------------------

    \44\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (7) At least 80% of the weight of the Fund's assets will be in
Municipal Bonds with a modified duration of 15 years or less. With
respect to credit quality, under normal market conditions, at least 90%
of the Fund's assets invested in Municipal Bonds will be in Municipal
Bonds rated ``A'' or better by at least one major credit rating agency
or, if unrated, deemed to be of comparable quality in the Adviser's
opinion.
    (8) The Fund's Municipal Bond investments will be diversified among
a minimum of ten distinct Municipal Bond sectors.\45\ In addition, the
Fund will limit its investments in Municipal Bonds in any single sector
to 25% of the Fund's assets.
---------------------------------------------------------------------------

    \45\ The Fund's investments in Municipal Bonds will include
investments in state and local (e.g., county, city, town) Municipal
Bonds relating to such sectors as the following: Dedicated tax;
public power; tax increment; toll road; port revenue; airport
revenue; water revenue; sewer revenue; higher education (colleges
and universities); wastewater revenue; school districts; sales tax
revenue; and pre-refunded bonds.
---------------------------------------------------------------------------

    (9) Under normal market conditions, each Municipal Bond held by the
Fund must be a constituent of a deal where the deal's original offering
amount was at least $100 million. The Fund will hold a minimum of 75
different Municipal Bonds. No Municipal Bond held by the Fund will
exceed 4% of the weight of the Fund's portfolio and no single Municipal
Bond issuer will account for more than 10% of the weight of the Fund's
portfolio. The Fund will hold Municipal Bonds of a minimum of 40 non-
affiliated issuers diversified among issuers in at least 20 different
states, with no more than 30% of the Fund's assets comprised of
Municipal Bonds that provide exposure to any single state.\46\
---------------------------------------------------------------------------

    \46\ For purposes of this restriction, each state and each
separate political subdivision, agency, authority, or
instrumentality of such state, each multi-state agency or authority,
and each guarantor, if any, will be treated as separate issuers of
Municipal Bonds.
---------------------------------------------------------------------------

    (10) The ETFs in which the Fund may invest will be registered under
the 1940 Act and will be listed and traded in the U.S. on registered
exchanges. With respect to its exchange-traded equity securities
investments (including exchange-traded convertible preferred stocks and
exchange-traded stocks into which convertible bonds may be converted),
the Fund will normally invest in equity securities that are listed and
traded on a U.S. exchange or in markets that are members of the ISG or
parties to a comprehensive surveillance sharing agreement with the
Exchange. In any case, not more than 10% of the net assets of the Fund
in the aggregate invested in equity securities (except for money market
funds) will consist of equity securities whose principal market is not
a member of ISG or a market with which the Exchange does not have a
comprehensive surveillance sharing agreement.
    (11) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
consistent with Commission guidance. 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.
    (12) The Fund's investments will be consistent with its investment
objective and will not be used to provide multiple returns of a
benchmark or to produce leveraged returns.
    The Exchange also represents 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 of the Fund 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.\47\ 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).
---------------------------------------------------------------------------

    \47\ 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., Securities Exchange Act Release No.
78005 (Jun. 7, 2016), 81 FR 38247 (Jun. 13, 2016) (SR-BATS-2015-
100). In the context of this representation, it is the Commission's
view that ``monitor'' and ``surveil'' both mean ongoing oversight of
a 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.
---------------------------------------------------------------------------

    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice, and
the Exchange's description of the Fund. The Commission notes that the
Fund and the Shares must comply with the requirements of NYSE Arca
Equities Rule 8.600 to be listed and traded on the Exchange.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \48\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 2 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-2016-107 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-2016-107. 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-2016-107 and should
be submitted on or before December 8, 2016.

V. Accelerated Approval of Proposed Rule Change as Modified by
Amendment No. 2 Thereto

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 2 thereto, prior to the thirtieth
day after the date of publication of notice of the filing of Amendment
No. 2 in the Federal Register. Amendment No. 2 supplements the proposed
rule change by, among other things, incorporating additional
diversification criteria to the Fund's investments in Municipal Bonds.
Specifically, the Exchange represents that the Fund would adhere to
certain investment restrictions, including but not limited to, the
following:
    (1) The Fund's Municipal Bond investments will be diversified among
a minimum of ten distinct Municipal Bond sectors.
    (2) The Fund will limit its investments in Municipal Bonds in any
single sector to 25% of the Fund's assets.
    (3) Each Municipal Bond held by the Fund must be a constituent of a
deal where the deal's original offering amount was at least $100
million.
    (4) The Fund will hold a minimum of 75 different Municipal Bonds.
    (5) No Municipal Bond held by the Fund will exceed 4% of the weight
of the Fund's portfolio, and no single Municipal Bond issuer will
account for more than 10% of the weight of the Fund's portfolio.
    (6) The Fund will hold Municipal Bonds of a minimum of 40 non-
affiliated issuers diversified among issuers in at least 20 different
states, with no more than 30% of the Fund's assets comprised of
Municipal Bonds that provide exposure to any single state.
    The Commission believes that the addition of these investment
restrictions helps to ensure that the proposed listing and trading of
the Shares is consistent with the portion of Section 6(b)(5) of the
Act,\49\ which requires that the rules of a national securities
exchange must be designed to, among other things, prevent fraudulent
and manipulative acts and practices and, in general, to protect
investors and the public interest. Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2) of the Act,\50\ to approve the
proposed rule change, as modified by Amendment No. 2 thereto, on an
accelerated basis.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78f(b)(5).
    \50\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\51\ that the proposed rule change (SR-NYSEArca-2016-107), as
modified by Amendment No. 2 thereto, be, and it hereby is, approved on
an accelerated basis.
---------------------------------------------------------------------------

    \51\ Id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\52\
---------------------------------------------------------------------------

    \52\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-27603 Filed 11-16-16; 8:45 am]
 BILLING CODE 8011-01-P