80_FR_39296 80 FR 39166 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 Thereto, Relating to the Listing and Trading of the Shares of the PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio, PowerShares Agriculture Commodity Strategy Portfolio, PowerShares Precious Metals Commodity Strategy Portfolio, PowerShares Energy Commodity Strategy Portfolio, PowerShares Base Metals Commodity Strategy Portfolio and PowerShares Bloomberg Commodity Strategy Portfolio, Each a Series of PowerShares Actively Managed Exchange-Traded Commodity Fund Trust

80 FR 39166 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 Thereto, Relating to the Listing and Trading of the Shares of the PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio, PowerShares Agriculture Commodity Strategy Portfolio, PowerShares Precious Metals Commodity Strategy Portfolio, PowerShares Energy Commodity Strategy Portfolio, PowerShares Base Metals Commodity Strategy Portfolio and PowerShares Bloomberg Commodity Strategy Portfolio, Each a Series of PowerShares Actively Managed Exchange-Traded Commodity Fund Trust

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 130 (July 8, 2015)

Page Range39166-39169
FR Document2015-16652

Federal Register, Volume 80 Issue 130 (Wednesday, July 8, 2015)
[Federal Register Volume 80, Number 130 (Wednesday, July 8, 2015)]
[Notices]
[Pages 39166-39169]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-16652]


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

[Release No. 34-75349; File No. SR-NASDAQ-2015-049]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval of Proposed Rule Change, as Modified by Amendment 
Nos. 1 and 2 Thereto, Relating to the Listing and Trading of the Shares 
of the PowerShares DB Optimum Yield Diversified Commodity Strategy 
Portfolio, PowerShares Agriculture Commodity Strategy Portfolio, 
PowerShares Precious Metals Commodity Strategy Portfolio, PowerShares 
Energy Commodity Strategy Portfolio, PowerShares Base Metals Commodity 
Strategy Portfolio and PowerShares Bloomberg Commodity Strategy 
Portfolio, Each a Series of PowerShares Actively Managed Exchange-
Traded Commodity Fund Trust

July 1, 2015.

I. Introduction

    On April 30, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') 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 relating to the listing and trading of shares 
(``Shares'') of the PowerShares DB Optimum Yield Diversified Commodity 
Strategy Portfolio, PowerShares Agriculture Commodity Strategy 
Portfolio, PowerShares Precious Metals Commodity Strategy Portfolio, 
PowerShares Energy Commodity Strategy Portfolio, PowerShares Base 
Metals Commodity Strategy Portfolio and PowerShares Bloomberg Commodity 
Strategy Portfolio (individually, ``Fund,'' and collectively, 
``Funds''), each a series of the PowerShares Actively Managed Exchange-
Traded Commodity Fund Trust (``Trust'') \3\ under Nasdaq Rule 5735. The 
proposed rule change was published for comment in the Federal Register 
on May 21, 2015.\4\ On June 30, 2015, the Exchange filed Amendment No. 
1 to the proposed rule change, and on July 1, 2015, the Exchange filed 
Amendment No. 2 to the proposed rule change.\5\ The Commission received 
no comments on the proposal. This order grants approval of the proposed 
rule change, as modified by Amendment Nos. 1 and 2 thereto.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ According to the Exchange, the Trust is registered with the 
Commission as an investment company and has filed a registration 
statement on Form N-1A with the Commission. A description of each 
Fund's investment strategy is set forth in the Trust's registration 
statement (``Registration Statement''). See Pre-effective Amendment 
No. 1 to the Registration Statement for the Trust, dated May 20, 
2014 (File Nos. 333-193135 and 811-22927).
    \4\ See Securities Exchange Act Release No. 74979 (May 15, 
2015), 80 FR 29359 (``Notice'').
    \5\ In Amendment No. 1 to the proposed rule change, the 
Exchange: (a) Made a technical typographical correction to the 
citation in its filing referencing an exemptive order issued under 
the Investment Company Act of 1940 (``1940 Act''); and (b) clarified 
that only the Subsidiary (as defined herein) will hold Commodity-
Linked Instruments (as defined herein) by removing the following 
statement in the filing: ``in addition, each Fund may hold 
instruments that its respective Subsidiary is entitled to hold, and 
vice versa, to the extent consistent with federal tax 
requirements.''. In Amendment No. 2 to the proposed rule change, the 
Exchange further clarified that (a) each Fund, through its 
respective Subsidiary (but not directly), will only invest in those 
commodity-linked notes, OTC Swaps, Forwards, or other over-the-
counter instruments that are based on the price of relevant 
Commodities Futures, as applicable, and tend to exhibit trading 
prices or returns that correlate with any Commodities Futures and 
that will further the investment objective of such Fund (each ``OTC 
Swaps,'' ``Forwards,'' and ``Commodities Futures,'' as defined 
herein); and (b) each Subsidiary (not each Fund) will enter into 
swap agreements and other over-the-counter transactions only with 
large, established, and well capitalized financial institutions that 
meet certain credit quality standards and monitoring policies, and 
each Subsidiary (not each Fund) will use various techniques to 
minimize credit risk, including early termination, or reset and 
payment of such investments, the use of different counterparties, or 
limiting the net amount due from any individual counterparty. 
Because Amendment Nos. 1 and 2 to the proposed rule change seek to 
make certain clarifications and technical corrections, and do not 
materially affect the substance of the proposed rule change or raise 
unique or novel regulatory issues, Amendment Nos. 1 and 2 to the 
proposed rule change do not require notice and comment. The text of 
Amendment Nos. 1 and 2 is available at: http://www.sec.gov/rules/sro/nasdaq.shtml.
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II. Description of the Proposed Rule Change

    The Commission previously approved the listing and trading of the 
Shares on the Exchange under Nasdaq Rule 5735, which governs the 
listing and trading of Managed Fund Shares.\6\ According to the 
Exchange, the Shares of the PowerShares DB Optimum Yield Diversified 
Commodity Strategy

[[Page 39167]]

Portfolio have commenced trading on the Exchange; the Shares of the 
other Funds have not. The Exchange proposes to permit the listing or 
continued listing, as the case may be, of the Shares based on certain 
proposed revisions to their investment strategies, as described in more 
detail below.\7\
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    \6\ See Securities Exchange Act Release Nos. 73078 (Sept. 11, 
2014), 79 FR 55851 (Sept. 17, 2014) (SR-NASDAQ-2014-80) (``Prior 
Notice''); and 73471 (Oct. 30, 2014), 79 FR 65751 (Nov. 5, 2014) 
(SR-NASDAQ-2014-080) (``Prior Order,'' and, together with the Prior 
Notice, collectively, ``Prior Release'').
    \7\ The Exchange states that the changes described herein will 
be effective contingent upon effectiveness of a post-effective 
amendment to the Registration Statement of the Trust, on behalf of 
each Fund.
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A. Principal Investments

    As stated in the Prior Release, each Fund's investment objective is 
to seek long-term capital appreciation. The Prior Release states that 
each Fund seeks to achieve its investment objective by investing, under 
normal circumstances,\8\ in a combination of: (i) A wholly-owned 
subsidiary organized under the laws of the Cayman Islands 
(individually, ``Subsidiary,'' and collectively, ``Subsidiaries''); 
(ii) exchange-traded products or exchange-traded commodity pools; \9\ 
and (iii) U.S. Treasury Securities, money market mutual funds, high 
quality commercial paper, and similar instruments (``Collateral 
Instruments'').\10\
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    \8\ The term ``under normal circumstances'' includes, but is not 
limited to, the absence of extreme volatility or trading halts in 
the equity, commodities and futures markets or the financial markets 
generally; operational issues causing dissemination of inaccurate 
market information; or force majeure type events such as systems 
failure, natural or manmade disaster, act of God, armed conflict, 
act of terrorism, riot or labor disruption, or any similar 
intervening circumstance.
    \9\ Specifically, the Prior Release noted that the Funds will 
invest in: (1) Exchange-traded funds (``ETFs'') that provide 
exposure to commodities, as would be listed under Nasdaq Rules 5705 
and 5735; (2) exchange-traded notes (``ETNs'') that provide exposure 
to commodities, as would be listed under Nasdaq Rule 5710; or (3) 
exchange-traded pooled investment vehicles that invest primarily in 
commodities and commodity-linked instruments, as would be listed 
under Nasdaq Rules 5711(b), (d), (f), (g), (h), (i), and (j) 
(``Commodity Pool'' or ``Commodity Pools'').
    \10\ The Exchange represents that, for a Fund's purposes, money 
market instruments will include: Short-term, high quality securities 
issued or guaranteed by non-U.S. governments, agencies, and 
instrumentalities; non-convertible corporate debt securities with 
remaining maturities of not more than 397 days that satisfy ratings 
requirements under Rule 2a-7 of the 1940 Act; money market mutual 
funds; and deposits and other obligations of U.S. and non-U.S. banks 
and financial institutions.
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    The Prior Release also states that each Subsidiary will invest in 
exchange-traded futures contracts linked to commodities (``Commodities 
Futures'') to provide its parent Fund with additional indirect exposure 
to the commodities markets. Each Fund's investment in its Subsidiary is 
designed to help the Fund obtain exposure to Commodities Futures 
returns in a manner consistent with the federal tax requirements 
applicable to regulated investment companies, such as the Funds, which 
limit the ability of investment companies to invest directly in 
derivative instruments such as Commodities Futures.
    In this proposed rule change, the Exchange seeks to make certain 
revisions to the investment strategy described in the Prior Release. 
Specifically, the proposal seeks to allow the Funds and the 
Subsidiaries, as applicable, to also invest in a variety of other 
securities and instruments beyond those set forth in the Prior Release, 
as follows:
     Each Fund, which already may invest in ETFs, ETNs, and 
Commodity Pools, seeks to also invest in: (i) Other investment 
companies,\11\ to the extent permitted under the 1940 Act; \12\ and 
(ii) exchange-traded commodity-linked equity securities \13\ (``Equity 
Securities'') (collectively, ``Commodity-Related Assets'').
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    \11\ In addition to ETFs, the other investment companies will 
consist of non-exchange traded U.S. registered open-end investment 
companies (mutual funds), closed-end investment companies traded on 
U.S. exchanges, or exchange-traded non-U.S. investment companies 
traded on foreign exchanges.
    \12\ According to the Exchange, each Fund's investment in 
securities of other investment companies may exceed the limits 
permitted under the 1940 Act, in accordance with certain terms and 
conditions set forth in a Commission exemptive order issued to an 
affiliate of the Trust (which applies equally to the Trust) pursuant 
to Section 12(d)(1)(J) of the 1940 Act. See Investment Company Act 
Release No. 30238 (Oct. 23, 2012) (File No. 812-13820) or, in the 
case of non-U.S. investment companies, pursuant to Commission No-
Action relief. See Red Rocks Capital, LLC (pub. avail. June 3, 
2011).
    \13\ Equity Securities will be comprised of exchange-traded 
common stocks of companies that operate in commodities, natural 
resources, and energy businesses, and in associated businesses, as 
well as companies that provide services or have exposure to such 
businesses.
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     each Subsidiary, which already may invest in Commodities 
Futures, now also seeks to invest in: (i) Exchange-traded futures 
contracts on commodity indices; (ii) commodity-linked notes; \14\ (iii) 
ETNs; (iv) exchange-traded options on Commodities Futures 
(``Options''); \15\ (v) centrally-cleared or over the counter (``OTC'') 
swaps on commodities (``Swaps''); and (vi) commodity-related forward 
contracts (``Forwards'') (collectively, ``Commodity-Linked 
Instruments''), which provide exposure to the investment returns of the 
commodities markets, without investing directly in physical 
commodities.
---------------------------------------------------------------------------

    \14\ According to the Exchange, such commodity-linked notes 
generally will not be exchange-traded; however it is possible that 
in the future some of those instruments could be listed for trading 
on an exchange.
    \15\ The Prior Release noted that with respect to Commodities 
Futures held indirectly through a Subsidiary, not more than 10% of 
the weight of such Commodities Futures in the aggregate shall 
consist of instruments whose principal trading market is not a 
member of the Intermarket Surveillance Group (``ISG'') or a market 
with which the Exchange does not have a comprehensive surveillance 
sharing agreement. The Exchange now clarifies that Options and 
commodity index futures will be subject to the same restrictions as 
Commodities Futures, and that Options and commodity index futures 
will be considered in the aggregate with Commodities Futures. 
Therefore, with respect to Commodities Futures, commodity index 
futures, and Options, not more than 10% of the weight of such 
Commodities Futures, commodity index futures, and Options, in the 
aggregate, shall consist of instruments whose principal trading 
market is not a member of the ISG or a market with which the 
Exchange does not have a comprehensive surveillance sharing 
agreement. The Exchange states that this 10% limitation applicable 
to Commodities Futures, commodity index futures, and Options, in the 
aggregate, is separate from the 10% limitation applicable to 
exchange traded equity securities described herein, and is 
determined separately from this other limitation.
---------------------------------------------------------------------------

    The Prior Release notes that all of the exchange-traded securities 
held by a Fund will be traded in a principal trading market that is a 
member of ISG or a market with which the Exchange has a comprehensive 
surveillance sharing agreement. The Funds propose to invest in Equity 
Securities, closed-end funds, ETFs, ETNs, Commodity Pools, and non-U.S. 
investment companies that are not traded in a principal trading market 
that is a member of ISG or a market with which the Exchange has a 
comprehensive surveillance sharing agreement; however, not more than 
10% of each Fund's investments in these investments (in the aggregate) 
will be invested in instruments that trade in markets that are not 
members of the ISG or that are not parties to a comprehensive 
surveillance sharing agreement with the Exchange.
    According to the Exchange, these additional instruments are 
intended to support each Fund's principal investment strategy by 
providing each Fund with the flexibility to obtain additional exposure 
to the investment returns of the commodities markets within the limits 
of applicable federal tax requirements and without investing directly 
in physical commodities. Each Fund, through its respective Subsidiary, 
will only invest in those commodity-linked notes, OTC Swaps, Forwards, 
or other over-the-counter instruments that are based on the price of 
relevant Commodities Futures, as applicable, and tend to exhibit 
trading prices or returns that correlate with any Commodities Futures 
and that will further the investment objective of such Fund.\16\ The 
Funds represent that the

[[Page 39168]]

descriptions of the original asset types included in the Prior Release 
remain otherwise unchanged and that the Funds and their Subsidiaries 
will adhere to all investment restrictions set forth in the Prior 
Release as they apply to the original asset types. The Funds also 
represent that the investments in these additional asset types will be 
consistent with each Fund's investment objective.
---------------------------------------------------------------------------

    \16\ Each Subsidiary will enter into swap agreements and other 
over-the-counter transactions only with large, established, and well 
capitalized financial institutions that meet certain credit quality 
standards and monitoring policies. Each Subsidiary will use various 
techniques to minimize credit risk, including early termination, or 
reset and payment of such investments, the use of different 
counterparties, or limiting the net amount due from any individual 
counterparty.
---------------------------------------------------------------------------

    The Exchange represents that, except for these changes described 
herein, all other facts presented and representations made in the Prior 
Release remain unchanged and in full effect. Additional information 
regarding the Trust, Fund, and Shares, including investment strategies 
and restrictions, risks, creation and redemption procedures, fees, 
portfolio holdings disclosure policies, distributions and taxes, 
calculation of net asset value (``NAV''), availability of information, 
trading rules and halts, and surveillance procedures, among other 
things, can be found in the Registration Statement, Notice, and Prior 
Release, as applicable.\17\
---------------------------------------------------------------------------

    \17\ See Registration Statement, Notice, and Prior Release, 
supra notes 3, 4, and 6, respectively, and accompanying text.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment Nos. 1 and 2 thereto, is consistent 
with the requirements of Section 6 of the Act \18\ and the rules and 
regulations thereunder applicable to a national securities 
exchange.\19\ In particular, the Commission finds that the proposed 
rule change, as modified by Amendment Nos. 1 and 2 thereto, is 
consistent with the requirements of Section 6(b)(5) of the Act,\20\ 
which requires, among other things, that the Exchange's rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. The Commission 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,\21\ which sets 
forth the finding of Congress that it is in the public interest and 
appropriate for the protection of investors and the maintenance of fair 
and orderly markets to assure the availability to brokers, dealers, and 
investors of information with respect to quotations for, and 
transactions in, securities.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78(f).
    \19\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \20\ 15 U.S.C. 78f(b)(5).
    \21\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Exchange represents that not more than 10% of each Fund's 
investments in Equity Securities, closed-end funds, ETFs, ETNs, 
Commodity Pools, and non-U.S. investment companies, in the aggregate, 
will be invested in instruments that trade in markets that are not 
members of the ISG or that are not parties to a comprehensive 
surveillance sharing agreement with the Exchange. In addition, the 
Exchange represents that, with respect to Commodities Futures, 
commodity index futures, and Options, not more than 10% of the weight 
of such Commodities Futures, commodity index futures, and Options, in 
the aggregate, will consist of instruments whose principal trading 
market is not a member of the ISG or a market with which the Exchange 
does not have a comprehensive surveillance sharing agreement. The 
Commission further notes that: (1) Commodity-Linked Instruments will 
only be held at the Fund's Subsidiary level; \22\ and (2) according to 
the Prior Release, each Fund's investment in a Subsidiary may not 
exceed 25% of the Fund's total assets.\23\
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    \22\ See Amendment No. 1, supra note 5.
    \23\ See Prior Release, supra note 6. The Commission further 
notes that, according to the Prior Release, because each Fund will 
wholly own and control its respective Subsidiary, and the Fund and 
the Subsidiary will be managed by Invesco PowerShares Capital 
Management LLC (``Adviser''), the Subsidiary will not take action 
contrary to the interests of the Fund or the Fund's shareholders. 
The Board of Trustees of the Trust has oversight responsibility for 
the investment activities of each Fund, including its expected 
investments in its Subsidiary, and that Fund's role as the sole 
shareholder of such Subsidiary. In managing a Subsidiary's 
portfolio, the Adviser will be subject to the same investment 
restrictions and operational guidelines that apply to the management 
of a Fund. See Prior Release, supra note 6, 79 FR at 55853.
---------------------------------------------------------------------------

    With respect to the calculation of NAV, in addition to the 
information set forth in the Prior Release, the Exchange represents 
that: (i) Equity Securities, ETNs, and futures on commodity indices 
will be valued at the last sales price or the official closing price on 
the exchange where such securities principally trade; (ii) investment 
companies will be valued using such company's end of the day NAV per 
share, unless the shares are exchange-traded, in which case they will 
be valued at the last sales price or official closing price on the 
exchanges on which they primarily trade; (iii) Options generally will 
be valued at the closing price (and, if no closing price is available, 
at the mean of the last bid/ask quotations) generally from the exchange 
where such instruments principally trade; and (iv) Swaps, commodity-
linked notes and Forwards generally will be valued based on quotations 
from a pricing vendor (such quotations being derived from available 
market- and company-specific data), all in accordance with valuation 
procedures adopted by the Board of Trustees of the Trust. All other 
valuation procedures pertaining to the Funds, and as set forth in the 
Prior Release, are unchanged.
    On each business day, before commencement of trading in Shares in 
the Regular Market Session on the Exchange, each Fund will disclose on 
its Web site the identities and quantities of its portfolio of 
securities and other assets (``Disclosed Portfolio,'' as defined in 
Nasdaq Rule 5735(c)(2)) held by such Fund and its Subsidiary, which 
will form the basis for each Fund's calculation of NAV at the end of 
the business day. In addition to the information set forth in the Prior 
Release, the Funds will disclose on a daily basis on the Funds' Web 
site the following information regarding each portfolio holding, as 
applicable to the type of holding: ticker symbol, CUSIP number or other 
identifier, if any; a description of the holding (including the type of 
holding), the identity of the security or other asset or instrument 
underlying the holding, if any; for options, the option strike price; 
for Swaps, a description of the type of Swap; 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 
percentage weighting of the holding in the Fund's portfolio. The Web 
site information will be publicly available at no charge. Intra-day 
price information on the exchange-traded assets held by the Fund and 
the Subsidiary, including the Equity Securities, ETNs, Options, 
exchange-traded investment companies (including closed-end funds), and 
exchange-traded futures contracts on commodity indices will be 
available via the quote and trade service of the respective exchanges 
on

[[Page 39169]]

which they principally trade. Additionally, price information on Swaps, 
commodity-linked notes, Forwards, and non-exchange traded investment 
companies will be available from major broker-dealer firms or through 
subscription services, such as Bloomberg, Markit, and Thomson Reuters, 
which can be accessed by entities that have entered into an authorized 
participant agreement with the Trust and other investors.
    In addition to the information set forth in the Prior Release, the 
Exchange represents that: (i) FINRA, on behalf of the Exchange, will 
communicate as needed regarding trading information it can obtain 
relating to exchange-traded or centrally-cleared equity securities and 
assets held by a Fund or its Subsidiary, as applicable, which include 
exchange-traded Commodity-Related Assets and exchange-traded or 
centrally-cleared Commodity-Linked Instruments, with other markets and 
other entities that are members of the ISG; (ii) FINRA may obtain 
trading information regarding trading in exchange-traded equity 
securities and other assets held by each Fund and each Subsidiary, as 
applicable, from such markets and other entities; and (iii) the 
Exchange may obtain information regarding trading in exchange-traded 
equity securities and other assets held by each Fund and each 
Subsidiary from such markets and other entities (as long as such 
markets and other entities are members of ISG or have in place a 
comprehensive surveillance sharing agreement with the Exchange). The 
Exchange has a general policy prohibiting the distribution of material, 
non-public information by its employees.
    The Commission notes that, beyond the changes described herein, the 
Exchange represents that there are no changes to any other information 
included in the Prior Release, and all other facts presented and 
representations made in the Prior Release remain true and in effect. 
The Commission further notes that the Funds and the Shares must comply 
with the requirements of Nasdaq Rule 5735 to be initially and 
continuously listed and traded on the Exchange. This approval order is 
based on all of the Exchange's representations and description of the 
Funds, including those set forth above, in the Prior Release, and in 
the Notice.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\24\ that the proposed rule change (SR-NASDAQ-2015-049), as 
modified by Amendment Nos. 1 and 2 thereto, be, and it hereby is, 
approved.
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    \24\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-16652 Filed 7-7-15; 8:45 am]
 BILLING CODE 8011-01-P



                                                39166                          Federal Register / Vol. 80, No. 130 / Wednesday, July 8, 2015 / Notices

                                                the person identified in the FOR FURTHER                   By the Commission.                                    5735. The proposed rule change was
                                                INFORMATION CONTACT section by                           Shoshana M. Grove,                                      published for comment in the Federal
                                                telephone for advice on filing                           Secretary.                                              Register on May 21, 2015.4 On June 30,
                                                alternatives.                                            [FR Doc. 2015–16645 Filed 7–7–15; 8:45 am]              2015, the Exchange filed Amendment
                                                                                                         BILLING CODE 7710–FW–P
                                                                                                                                                                 No. 1 to the proposed rule change, and
                                                FOR FURTHER INFORMATION CONTACT:
                                                                                                                                                                 on July 1, 2015, the Exchange filed
                                                David A. Trissell, General Counsel, at                                                                           Amendment No. 2 to the proposed rule
                                                202–789–6820.                                                                                                    change.5 The Commission received no
                                                SUPPLEMENTARY INFORMATION:
                                                                                                         SECURITIES AND EXCHANGE                                 comments on the proposal. This order
                                                                                                         COMMISSION                                              grants approval of the proposed rule
                                                Table of Contents
                                                                                                         [Release No. 34–75349; File No. SR–                     change, as modified by Amendment
                                                I. Introduction                                          NASDAQ–2015–049]                                        Nos. 1 and 2 thereto.
                                                II. Notice of Commission Action
                                                III. Ordering Paragraphs                                 Self-Regulatory Organizations; The                      II. Description of the Proposed Rule
                                                                                                         NASDAQ Stock Market LLC; Order                          Change
                                                I. Introduction
                                                                                                         Granting Approval of Proposed Rule                         The Commission previously approved
                                                   On June 30, 2015, the Postal Service                  Change, as Modified by Amendment                        the listing and trading of the Shares on
                                                filed notice that it has entered into an                 Nos. 1 and 2 Thereto, Relating to the                   the Exchange under Nasdaq Rule 5735,
                                                additional Foreign Postal Operators 1                    Listing and Trading of the Shares of                    which governs the listing and trading of
                                                negotiated service agreement                             the PowerShares DB Optimum Yield                        Managed Fund Shares.6 According to
                                                (Agreement).1                                            Diversified Commodity Strategy                          the Exchange, the Shares of the
                                                   To support its Notice, the Postal                     Portfolio, PowerShares Agriculture                      PowerShares DB Optimum Yield
                                                Service filed a copy of the Agreement,                   Commodity Strategy Portfolio,                           Diversified Commodity Strategy
                                                a copy of the Governors’ Decision                        PowerShares Precious Metals
                                                authorizing the product, a certification                 Commodity Strategy Portfolio,                           Trust’s registration statement (‘‘Registration
                                                of compliance with 39 U.S.C. 3633(a),                    PowerShares Energy Commodity                            Statement’’). See Pre-effective Amendment No. 1 to
                                                                                                                                                                 the Registration Statement for the Trust, dated May
                                                and an application for non-public                        Strategy Portfolio, PowerShares Base                    20, 2014 (File Nos. 333–193135 and 811–22927).
                                                treatment of certain materials. It also                  Metals Commodity Strategy Portfolio                       4 See Securities Exchange Act Release No. 74979

                                                filed supporting financial workpapers.                   and PowerShares Bloomberg                               (May 15, 2015), 80 FR 29359 (‘‘Notice’’).
                                                                                                         Commodity Strategy Portfolio, Each a                      5 In Amendment No. 1 to the proposed rule
                                                II. Notice of Commission Action                                                                                  change, the Exchange: (a) Made a technical
                                                                                                         Series of PowerShares Actively
                                                                                                                                                                 typographical correction to the citation in its filing
                                                  The Commission establishes Docket                      Managed Exchange-Traded                                 referencing an exemptive order issued under the
                                                No. CP2015–91 for consideration of                       Commodity Fund Trust                                    Investment Company Act of 1940 (‘‘1940 Act’’); and
                                                matters raised by the Notice.                                                                                    (b) clarified that only the Subsidiary (as defined
                                                                                                         July 1, 2015.                                           herein) will hold Commodity-Linked Instruments
                                                  The Commission invites comments on                                                                             (as defined herein) by removing the following
                                                whether the Postal Service’s filing is                   I. Introduction                                         statement in the filing: ‘‘in addition, each Fund may
                                                consistent with 39 U.S.C. 3632, 3633, or                    On April 30, 2015, The NASDAQ                        hold instruments that its respective Subsidiary is
                                                3642, 39 CFR part 3015, and 39 CFR                                                                               entitled to hold, and vice versa, to the extent
                                                                                                         Stock Market LLC (‘‘Nasdaq’’ or                         consistent with federal tax requirements.’’. In
                                                part 3020, subpart B. Comments are due                   ‘‘Exchange’’) filed with the Securities                 Amendment No. 2 to the proposed rule change, the
                                                no later than July 9, 2015. The public                   and Exchange Commission                                 Exchange further clarified that (a) each Fund,
                                                portions of the filing can be accessed via               (‘‘Commission’’), pursuant to Section                   through its respective Subsidiary (but not directly),
                                                the Commission’s Web site (http://                                                                               will only invest in those commodity-linked notes,
                                                                                                         19(b)(1) of the Securities Exchange Act                 OTC Swaps, Forwards, or other over-the-counter
                                                www.prc.gov).                                            of 1934 (‘‘Act’’) 1 and Rule 19b–4                      instruments that are based on the price of relevant
                                                  The Commission appoints James F.                       thereunder,2 a proposed rule change                     Commodities Futures, as applicable, and tend to
                                                Callow to serve as Public Representative                                                                         exhibit trading prices or returns that correlate with
                                                                                                         relating to the listing and trading of                  any Commodities Futures and that will further the
                                                in this docket.                                          shares (‘‘Shares’’) of the PowerShares                  investment objective of such Fund (each ‘‘OTC
                                                III. Ordering Paragraphs                                 DB Optimum Yield Diversified                            Swaps,’’ ‘‘Forwards,’’ and ‘‘Commodities Futures,’’
                                                                                                         Commodity Strategy Portfolio,                           as defined herein); and (b) each Subsidiary (not
                                                  It is ordered:                                                                                                 each Fund) will enter into swap agreements and
                                                                                                         PowerShares Agriculture Commodity                       other over-the-counter transactions only with large,
                                                  1. The Commission establishes Docket                   Strategy Portfolio, PowerShares                         established, and well capitalized financial
                                                No. CP2015–91 for consideration of the                   Precious Metals Commodity Strategy                      institutions that meet certain credit quality
                                                matters raised by the Postal Service’s                   Portfolio, PowerShares Energy                           standards and monitoring policies, and each
                                                                                                                                                                 Subsidiary (not each Fund) will use various
                                                Notice.                                                  Commodity Strategy Portfolio,                           techniques to minimize credit risk, including early
                                                  2. Pursuant to 39 U.S.C. 505, James F.                 PowerShares Base Metals Commodity                       termination, or reset and payment of such
                                                Callow is appointed to serve as an                       Strategy Portfolio and PowerShares                      investments, the use of different counterparties, or
                                                officer of the Commission to represent                   Bloomberg Commodity Strategy                            limiting the net amount due from any individual
                                                                                                                                                                 counterparty. Because Amendment Nos. 1 and 2 to
                                                the interests of the general public in this              Portfolio (individually, ‘‘Fund,’’ and                  the proposed rule change seek to make certain
                                                proceeding (Public Representative).                      collectively, ‘‘Funds’’), each a series of              clarifications and technical corrections, and do not
                                                  3. Comments are due no later than                      the PowerShares Actively Managed                        materially affect the substance of the proposed rule
                                                                                                         Exchange-Traded Commodity Fund                          change or raise unique or novel regulatory issues,
                                                July 9, 2015.                                                                                                    Amendment Nos. 1 and 2 to the proposed rule
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                                                  4. The Secretary shall arrange for                     Trust (‘‘Trust’’) 3 under Nasdaq Rule                   change do not require notice and comment. The text
                                                publication of this order in the Federal                                                                         of Amendment Nos. 1 and 2 is available at:
                                                                                                              1 15
                                                                                                                U.S.C.78s(b)(1).                                 http://www.sec.gov/rules/sro/nasdaq.shtml.
                                                Register.                                                     2 17
                                                                                                                CFR 240.19b–4.                                     6 See Securities Exchange Act Release Nos. 73078
                                                                                                           3 According to the Exchange, the Trust is             (Sept. 11, 2014), 79 FR 55851 (Sept. 17, 2014) (SR–
                                                  1 Notice of United States Postal Service of Filing     registered with the Commission as an investment         NASDAQ–2014–80) (‘‘Prior Notice’’); and 73471
                                                Functionally Equivalent Inbound Competitive              company and has filed a registration statement on       (Oct. 30, 2014), 79 FR 65751 (Nov. 5, 2014) (SR–
                                                Multi-Service Agreement with a Foreign Postal            Form N–1A with the Commission. A description of         NASDAQ–2014–080) (‘‘Prior Order,’’ and, together
                                                Operator, June 30, 2015 (Notice).                        each Fund’s investment strategy is set forth in the     with the Prior Notice, collectively, ‘‘Prior Release’’).



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                                                                                Federal Register / Vol. 80, No. 130 / Wednesday, July 8, 2015 / Notices                                                    39167

                                                Portfolio have commenced trading on                        requirements applicable to regulated                  (v) centrally-cleared or over the counter
                                                the Exchange; the Shares of the other                      investment companies, such as the                     (‘‘OTC’’) swaps on commodities
                                                Funds have not. The Exchange proposes                      Funds, which limit the ability of                     (‘‘Swaps’’); and (vi) commodity-related
                                                to permit the listing or continued                         investment companies to invest directly               forward contracts (‘‘Forwards’’)
                                                listing, as the case may be, of the Shares                 in derivative instruments such as                     (collectively, ‘‘Commodity-Linked
                                                based on certain proposed revisions to                     Commodities Futures.                                  Instruments’’), which provide exposure
                                                their investment strategies, as described                     In this proposed rule change, the                  to the investment returns of the
                                                in more detail below.7                                     Exchange seeks to make certain                        commodities markets, without investing
                                                                                                           revisions to the investment strategy                  directly in physical commodities.
                                                A. Principal Investments                                   described in the Prior Release.                          The Prior Release notes that all of the
                                                   As stated in the Prior Release, each                    Specifically, the proposal seeks to allow             exchange-traded securities held by a
                                                Fund’s investment objective is to seek                     the Funds and the Subsidiaries, as                    Fund will be traded in a principal
                                                long-term capital appreciation. The                        applicable, to also invest in a variety of            trading market that is a member of ISG
                                                Prior Release states that each Fund                        other securities and instruments beyond               or a market with which the Exchange
                                                seeks to achieve its investment objective                  those set forth in the Prior Release, as              has a comprehensive surveillance
                                                by investing, under normal                                 follows:                                              sharing agreement. The Funds propose
                                                circumstances,8 in a combination of: (i)                      • Each Fund, which already may                     to invest in Equity Securities, closed-
                                                A wholly-owned subsidiary organized                        invest in ETFs, ETNs, and Commodity                   end funds, ETFs, ETNs, Commodity
                                                under the laws of the Cayman Islands                       Pools, seeks to also invest in: (i) Other             Pools, and non-U.S. investment
                                                (individually, ‘‘Subsidiary,’’ and                         investment companies,11 to the extent                 companies that are not traded in a
                                                collectively, ‘‘Subsidiaries’’); (ii)                      permitted under the 1940 Act; 12 and (ii)             principal trading market that is a
                                                exchange-traded products or exchange-                      exchange-traded commodity-linked                      member of ISG or a market with which
                                                traded commodity pools; 9 and (iii) U.S.                   equity securities 13 (‘‘Equity Securities’’)          the Exchange has a comprehensive
                                                Treasury Securities, money market                          (collectively, ‘‘Commodity-Related                    surveillance sharing agreement;
                                                mutual funds, high quality commercial                      Assets’’).                                            however, not more than 10% of each
                                                paper, and similar instruments                                • each Subsidiary, which already may               Fund’s investments in these
                                                (‘‘Collateral Instruments’’).10                            invest in Commodities Futures, now                    investments (in the aggregate) will be
                                                   The Prior Release also states that each                 also seeks to invest in: (i) Exchange-                invested in instruments that trade in
                                                Subsidiary will invest in exchange-                        traded futures contracts on commodity                 markets that are not members of the ISG
                                                traded futures contracts linked to                         indices; (ii) commodity-linked notes; 14              or that are not parties to a
                                                commodities (‘‘Commodities Futures’’)                      (iii) ETNs; (iv) exchange-traded options              comprehensive surveillance sharing
                                                to provide its parent Fund with                            on Commodities Futures (‘‘Options’’); 15              agreement with the Exchange.
                                                additional indirect exposure to the                                                                                 According to the Exchange, these
                                                commodities markets. Each Fund’s                              11 In addition to ETFs, the other investment
                                                                                                                                                                 additional instruments are intended to
                                                investment in its Subsidiary is designed                   companies will consist of non-exchange traded U.S.
                                                                                                           registered open-end investment companies (mutual
                                                                                                                                                                 support each Fund’s principal
                                                to help the Fund obtain exposure to                        funds), closed-end investment companies traded on     investment strategy by providing each
                                                Commodities Futures returns in a                           U.S. exchanges, or exchange-traded non-U.S.           Fund with the flexibility to obtain
                                                manner consistent with the federal tax                     investment companies traded on foreign exchanges.     additional exposure to the investment
                                                                                                              12 According to the Exchange, each Fund’s
                                                                                                                                                                 returns of the commodities markets
                                                   7 The Exchange states that the changes described        investment in securities of other investment
                                                                                                           companies may exceed the limits permitted under       within the limits of applicable federal
                                                herein will be effective contingent upon
                                                effectiveness of a post-effective amendment to the         the 1940 Act, in accordance with certain terms and    tax requirements and without investing
                                                Registration Statement of the Trust, on behalf of          conditions set forth in a Commission exemptive        directly in physical commodities. Each
                                                each Fund.                                                 order issued to an affiliate of the Trust (which      Fund, through its respective Subsidiary,
                                                   8 The term ‘‘under normal circumstances’’               applies equally to the Trust) pursuant to Section
                                                                                                           12(d)(1)(J) of the 1940 Act. See Investment           will only invest in those commodity-
                                                includes, but is not limited to, the absence of
                                                extreme volatility or trading halts in the equity,         Company Act Release No. 30238 (Oct. 23, 2012)         linked notes, OTC Swaps, Forwards, or
                                                commodities and futures markets or the financial           (File No. 812–13820) or, in the case of non-U.S.      other over-the-counter instruments that
                                                markets generally; operational issues causing              investment companies, pursuant to Commission          are based on the price of relevant
                                                dissemination of inaccurate market information; or         No-Action relief. See Red Rocks Capital, LLC (pub.
                                                                                                           avail. June 3, 2011).                                 Commodities Futures, as applicable,
                                                force majeure type events such as systems failure,
                                                natural or manmade disaster, act of God, armed                13 Equity Securities will be comprised of          and tend to exhibit trading prices or
                                                conflict, act of terrorism, riot or labor disruption, or   exchange-traded common stocks of companies that       returns that correlate with any
                                                any similar intervening circumstance.                      operate in commodities, natural resources, and        Commodities Futures and that will
                                                   9 Specifically, the Prior Release noted that the        energy businesses, and in associated businesses, as
                                                                                                           well as companies that provide services or have
                                                                                                                                                                 further the investment objective of such
                                                Funds will invest in: (1) Exchange-traded funds
                                                (‘‘ETFs’’) that provide exposure to commodities, as        exposure to such businesses.                          Fund.16 The Funds represent that the
                                                                                                              14 According to the Exchange, such commodity-
                                                would be listed under Nasdaq Rules 5705 and 5735;
                                                (2) exchange-traded notes (‘‘ETNs’’) that provide          linked notes generally will not be exchange-traded;   with respect to Commodities Futures, commodity
                                                exposure to commodities, as would be listed under          however it is possible that in the future some of     index futures, and Options, not more than 10% of
                                                Nasdaq Rule 5710; or (3) exchange-traded pooled            those instruments could be listed for trading on an   the weight of such Commodities Futures,
                                                investment vehicles that invest primarily in               exchange.                                             commodity index futures, and Options, in the
                                                commodities and commodity-linked instruments, as              15 The Prior Release noted that with respect to    aggregate, shall consist of instruments whose
                                                would be listed under Nasdaq Rules 5711(b), (d), (f),      Commodities Futures held indirectly through a         principal trading market is not a member of the ISG
                                                (g), (h), (i), and (j) (‘‘Commodity Pool’’ or              Subsidiary, not more than 10% of the weight of        or a market with which the Exchange does not have
                                                ‘‘Commodity Pools’’).                                      such Commodities Futures in the aggregate shall       a comprehensive surveillance sharing agreement.
                                                   10 The Exchange represents that, for a Fund’s           consist of instruments whose principal trading        The Exchange states that this 10% limitation
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                                                purposes, money market instruments will include:           market is not a member of the Intermarket             applicable to Commodities Futures, commodity
                                                Short-term, high quality securities issued or              Surveillance Group (‘‘ISG’’) or a market with which   index futures, and Options, in the aggregate, is
                                                guaranteed by non-U.S. governments, agencies, and          the Exchange does not have a comprehensive            separate from the 10% limitation applicable to
                                                instrumentalities; non-convertible corporate debt          surveillance sharing agreement. The Exchange now      exchange traded equity securities described herein,
                                                securities with remaining maturities of not more           clarifies that Options and commodity index futures    and is determined separately from this other
                                                than 397 days that satisfy ratings requirements            will be subject to the same restrictions as           limitation.
                                                under Rule 2a–7 of the 1940 Act; money market              Commodities Futures, and that Options and               16 Each Subsidiary will enter into swap

                                                mutual funds; and deposits and other obligations of        commodity index futures will be considered in the     agreements and other over-the-counter transactions
                                                U.S. and non-U.S. banks and financial institutions.        aggregate with Commodities Futures. Therefore,                                                  Continued




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                                                39168                          Federal Register / Vol. 80, No. 130 / Wednesday, July 8, 2015 / Notices

                                                descriptions of the original asset types                 and a national market system, and, in                   exchange where such securities
                                                included in the Prior Release remain                     general, to protect investors and the                   principally trade; (ii) investment
                                                otherwise unchanged and that the                         public interest. The Commission also                    companies will be valued using such
                                                Funds and their Subsidiaries will                        finds that the proposal to list and trade               company’s end of the day NAV per
                                                adhere to all investment restrictions set                the Shares on the Exchange is consistent                share, unless the shares are exchange-
                                                forth in the Prior Release as they apply                 with Section 11A(a)(1)(C)(iii) of the                   traded, in which case they will be
                                                to the original asset types. The Funds                   Act,21 which sets forth the finding of                  valued at the last sales price or official
                                                also represent that the investments in                   Congress that it is in the public interest              closing price on the exchanges on which
                                                these additional asset types will be                     and appropriate for the protection of                   they primarily trade; (iii) Options
                                                consistent with each Fund’s investment                   investors and the maintenance of fair                   generally will be valued at the closing
                                                objective.                                               and orderly markets to assure the                       price (and, if no closing price is
                                                   The Exchange represents that, except                  availability to brokers, dealers, and                   available, at the mean of the last bid/ask
                                                for these changes described herein, all                  investors of information with respect to                quotations) generally from the exchange
                                                other facts presented and                                quotations for, and transactions in,                    where such instruments principally
                                                representations made in the Prior                        securities.                                             trade; and (iv) Swaps, commodity-
                                                Release remain unchanged and in full                        The Exchange represents that not                     linked notes and Forwards generally
                                                effect. Additional information regarding                 more than 10% of each Fund’s                            will be valued based on quotations from
                                                the Trust, Fund, and Shares, including                   investments in Equity Securities,                       a pricing vendor (such quotations being
                                                investment strategies and restrictions,                  closed-end funds, ETFs, ETNs,                           derived from available market- and
                                                risks, creation and redemption                           Commodity Pools, and non-U.S.                           company-specific data), all in
                                                procedures, fees, portfolio holdings                     investment companies, in the aggregate,                 accordance with valuation procedures
                                                disclosure policies, distributions and                   will be invested in instruments that                    adopted by the Board of Trustees of the
                                                taxes, calculation of net asset value                    trade in markets that are not members                   Trust. All other valuation procedures
                                                (‘‘NAV’’), availability of information,                  of the ISG or that are not parties to a                 pertaining to the Funds, and as set forth
                                                trading rules and halts, and surveillance                comprehensive surveillance sharing                      in the Prior Release, are unchanged.
                                                procedures, among other things, can be                   agreement with the Exchange. In
                                                                                                                                                                    On each business day, before
                                                found in the Registration Statement,                     addition, the Exchange represents that,
                                                                                                                                                                 commencement of trading in Shares in
                                                Notice, and Prior Release, as                            with respect to Commodities Futures,
                                                                                                                                                                 the Regular Market Session on the
                                                applicable.17                                            commodity index futures, and Options,
                                                                                                                                                                 Exchange, each Fund will disclose on
                                                III. Discussion and Commission                           not more than 10% of the weight of
                                                                                                                                                                 its Web site the identities and quantities
                                                Findings                                                 such Commodities Futures, commodity
                                                                                                                                                                 of its portfolio of securities and other
                                                                                                         index futures, and Options, in the
                                                   After careful review, the Commission                                                                          assets (‘‘Disclosed Portfolio,’’ as defined
                                                                                                         aggregate, will consist of instruments
                                                finds that the proposed rule change, as                                                                          in Nasdaq Rule 5735(c)(2)) held by such
                                                                                                         whose principal trading market is not a
                                                modified by Amendment Nos. 1 and 2                                                                               Fund and its Subsidiary, which will
                                                                                                         member of the ISG or a market with
                                                thereto, is consistent with the                                                                                  form the basis for each Fund’s
                                                                                                         which the Exchange does not have a
                                                requirements of Section 6 of the Act 18                                                                          calculation of NAV at the end of the
                                                                                                         comprehensive surveillance sharing
                                                and the rules and regulations                                                                                    business day. In addition to the
                                                                                                         agreement. The Commission further
                                                thereunder applicable to a national                                                                              information set forth in the Prior
                                                                                                         notes that: (1) Commodity-Linked
                                                securities exchange.19 In particular, the                                                                        Release, the Funds will disclose on a
                                                                                                         Instruments will only be held at the
                                                Commission finds that the proposed                                                                               daily basis on the Funds’ Web site the
                                                                                                         Fund’s Subsidiary level; 22 and (2)
                                                rule change, as modified by Amendment                                                                            following information regarding each
                                                                                                         according to the Prior Release, each
                                                Nos. 1 and 2 thereto, is consistent with                                                                         portfolio holding, as applicable to the
                                                                                                         Fund’s investment in a Subsidiary may
                                                the requirements of Section 6(b)(5) of                                                                           type of holding: ticker symbol, CUSIP
                                                                                                         not exceed 25% of the Fund’s total
                                                the Act,20 which requires, among other                                                                           number or other identifier, if any; a
                                                                                                         assets.23
                                                things, that the Exchange’s rules be                                                                             description of the holding (including
                                                                                                            With respect to the calculation of
                                                designed to prevent fraudulent and                                                                               the type of holding), the identity of the
                                                                                                         NAV, in addition to the information set
                                                manipulative acts and practices, to                                                                              security or other asset or instrument
                                                                                                         forth in the Prior Release, the Exchange
                                                promote just and equitable principles of                                                                         underlying the holding, if any; for
                                                                                                         represents that: (i) Equity Securities,
                                                trade, to foster cooperation and                                                                                 options, the option strike price; for
                                                                                                         ETNs, and futures on commodity
                                                coordination with persons engaged in                                                                             Swaps, a description of the type of
                                                                                                         indices will be valued at the last sales
                                                facilitating transactions in securities, to                                                                      Swap; quantity held (as measured by,
                                                                                                         price or the official closing price on the
                                                remove impediments to and perfect the                                                                            for example, par value, notional value or
                                                mechanism of a free and open market                           21 15
                                                                                                                 U.S.C. 78k–1(a)(1)(C)(iii).
                                                                                                                                                                 number of shares, contracts or units);
                                                                                                              22 See
                                                                                                                  Amendment No. 1, supra note 5.                 maturity date, if any; coupon rate, if
                                                only with large, established, and well capitalized         23 See Prior Release, supra note 6. The               any; effective date, if any; market value
                                                financial institutions that meet certain credit          Commission further notes that, according to the         of the holding; and percentage
                                                quality standards and monitoring policies. Each          Prior Release, because each Fund will wholly own
                                                Subsidiary will use various techniques to minimize                                                               weighting of the holding in the Fund’s
                                                                                                         and control its respective Subsidiary, and the Fund
                                                credit risk, including early termination, or reset and   and the Subsidiary will be managed by Invesco
                                                                                                                                                                 portfolio. The Web site information will
                                                payment of such investments, the use of different        PowerShares Capital Management LLC (‘‘Adviser’’),       be publicly available at no charge. Intra-
                                                counterparties, or limiting the net amount due from      the Subsidiary will not take action contrary to the     day price information on the exchange-
                                                any individual counterparty.                             interests of the Fund or the Fund’s shareholders.       traded assets held by the Fund and the
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                                                   17 See Registration Statement, Notice, and Prior
                                                                                                         The Board of Trustees of the Trust has oversight
                                                Release, supra notes 3, 4, and 6, respectively, and      responsibility for the investment activities of each
                                                                                                                                                                 Subsidiary, including the Equity
                                                accompanying text.                                       Fund, including its expected investments in its         Securities, ETNs, Options, exchange-
                                                   18 15 U.S.C. 78(f).
                                                                                                         Subsidiary, and that Fund’s role as the sole            traded investment companies (including
                                                   19 In approving this proposed rule change, the
                                                                                                         shareholder of such Subsidiary. In managing a           closed-end funds), and exchange-traded
                                                Commission notes that it has considered the              Subsidiary’s portfolio, the Adviser will be subject
                                                proposed rule’s impact on efficiency, competition,       to the same investment restrictions and operational
                                                                                                                                                                 futures contracts on commodity indices
                                                and capital formation. See 15 U.S.C. 78c(f).             guidelines that apply to the management of a Fund.      will be available via the quote and trade
                                                   20 15 U.S.C. 78f(b)(5).                               See Prior Release, supra note 6, 79 FR at 55853.        service of the respective exchanges on


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                                                                                 Federal Register / Vol. 80, No. 130 / Wednesday, July 8, 2015 / Notices                                                       39169

                                                which they principally trade.                               2015–049), as modified by Amendment                       II. Self-Regulatory Organization’s
                                                Additionally, price information on                          Nos. 1 and 2 thereto, be, and it hereby                   Statement of the Purpose of, and
                                                Swaps, commodity-linked notes,                              is, approved.                                             Statutory Basis for, the Proposed Rule
                                                Forwards, and non-exchange traded                             For the Commission, by the Division of                  Change
                                                investment companies will be available                      Trading and Markets, pursuant to delegated                  In its filing with the Commission, the
                                                from major broker-dealer firms or                           authority.25
                                                                                                                                                                      Exchange included statements
                                                through subscription services, such as                      Robert W. Errett,                                         concerning the purpose of and basis for
                                                Bloomberg, Markit, and Thomson                              Deputy Secretary.                                         the proposed rule change and discussed
                                                Reuters, which can be accessed by                           [FR Doc. 2015–16652 Filed 7–7–15; 8:45 am]                any comments it received on the
                                                entities that have entered into an                          BILLING CODE 8011–01–P                                    proposed rule change. The text of these
                                                authorized participant agreement with
                                                                                                                                                                      statements may be examined at the
                                                the Trust and other investors.
                                                   In addition to the information set                                                                                 places specified in Item IV below. The
                                                                                                            SECURITIES AND EXCHANGE                                   Exchange has prepared summaries, set
                                                forth in the Prior Release, the Exchange                    COMMISSION
                                                represents that: (i) FINRA, on behalf of                                                                              forth in Sections A, B, and C below, of
                                                the Exchange, will communicate as                           [Release No. 34–75350; File No. SR–BOX–                   the most significant aspects of such
                                                needed regarding trading information it                     2015–24]                                                  statements.
                                                can obtain relating to exchange-traded                                                                                A. Self-Regulatory Organization’s
                                                                                                            Self-Regulatory Organizations; BOX
                                                or centrally-cleared equity securities                                                                                Statement of the Purpose of, and
                                                                                                            Options Exchange LLC; Notice of
                                                and assets held by a Fund or its                                                                                      Statutory Basis for, the Proposed Rule
                                                                                                            Filing and Immediate Effectiveness of
                                                Subsidiary, as applicable, which                                                                                      Change
                                                                                                            a Proposed Rule Change To Amend
                                                include exchange-traded Commodity-
                                                                                                            the Fee Schedule on the BOX Market                        1. Purpose
                                                Related Assets and exchange-traded or
                                                                                                            LLC Options Facility
                                                centrally-cleared Commodity-Linked                                                                                       The Exchange proposes to make a
                                                Instruments, with other markets and                         July 1, 2015.                                             number of changes to Section I.A of the
                                                other entities that are members of the                         Pursuant to Section 19(b)(1) under the                 BOX Fee Schedule, Exchange Fees for
                                                ISG; (ii) FINRA may obtain trading                          Securities Exchange Act of 1934 (the                      Non-Auction Transactions.
                                                information regarding trading in                            ‘‘Act’’),1 and Rule 19b–4 thereunder,2                       First, the Exchange proposes to
                                                exchange-traded equity securities and                       notice is hereby given that on June 29,                   amend certain credits in the pricing
                                                other assets held by each Fund and each                     2015, BOX Options Exchange LLC (the                       model outlined in Section I.A. (Non-
                                                Subsidiary, as applicable, from such                        ‘‘Exchange’’) filed with the Securities                   Auction Transactions).5 In this section,
                                                markets and other entities; and (iii) the                   and Exchange Commission (the                              fees and credits are assessed depending
                                                Exchange may obtain information                             ‘‘Commission’’) the proposed rule                         on upon three factors: (i) The account
                                                regarding trading in exchange-traded                        change as described in Items I, II, and                   type of the Participant submitting the
                                                equity securities and other assets held                     III below, which Items have been                          order; (ii) whether the Participant is a
                                                by each Fund and each Subsidiary from                       prepared by the Exchange. The                             liquidity provider or liquidity taker; and
                                                such markets and other entities (as long                    Exchange filed the proposed rule change                   (iii) the account type of the contra party.
                                                as such markets and other entities are                      pursuant to Section 19(b)(3)(A)(ii) of the                Non-Auction Transactions in Penny
                                                members of ISG or have in place a                           Act,3 and Rule 19b–4(f)(2) thereunder,4                   Pilot Classes are assessed different fees
                                                comprehensive surveillance sharing                          which renders the proposal effective                      or credits than Non-Auction
                                                agreement with the Exchange). The                           upon filing with the Commission. The                      Transactions in Non-Penny Pilot
                                                Exchange has a general policy                               Commission is publishing this notice to                   Classes. The Exchange recently adopted
                                                prohibiting the distribution of material,                   solicit comments on the proposed rule                     this pricing model 6 and now proposes
                                                non-public information by its                               change from interested persons.                           to amend certain credits in this section.
                                                employees.                                                                                                               Specifically, the Exchange proposes to
                                                   The Commission notes that, beyond                        I. Self-Regulatory Organization’s
                                                                                                            Statement of the Terms of the Substance                   eliminate the Maker and Taker credits
                                                the changes described herein, the
                                                                                                            of the Proposed Rule Change                               for Public Customers interacting with
                                                Exchange represents that there are no
                                                                                                                                                                      Professional Customers/Broker Dealers
                                                changes to any other information                               The Exchange is filing with the                        or Market Makers in both Penny Pilot
                                                included in the Prior Release, and all                      Securities and Exchange Commission                        and Non-Penny Pilot Classes. Public
                                                other facts presented and                                   (‘‘Commission’’) a proposed rule change                   Customers currently receive a $0.10
                                                representations made in the Prior                           to amend the Fee Schedule on the BOX                      credit (Penny Pilot Classes) and $0.45
                                                Release remain true and in effect. The                      Market LLC (‘‘BOX’’) options facility.                    credit (Non-Penny Pilot Classes) when
                                                Commission further notes that the                           While changes to the fee schedule                         interacting with Professional Customers,
                                                Funds and the Shares must comply with                       pursuant to this proposal will be                         Broker Dealers or Market Makers,
                                                the requirements of Nasdaq Rule 5735 to                     effective upon filing, the changes will                   regardless of whether they are adding or
                                                be initially and continuously listed and                    become operative on July 1, 2015. The                     removing liquidity. The Exchange
                                                traded on the Exchange. This approval                       text of the proposed rule change is                       proposes to eliminate both these credits.
                                                order is based on all of the Exchange’s                     available from the principal office of the
                                                representations and description of the                                                                                   These transactions will remain
                                                                                                            Exchange, at the Commission’s Public                      exempt from the Liquidity Fees and
                                                Funds, including those set forth above,                     Reference Room and also on the                            Credits outlined in Section II of the BOX
srobinson on DSK5SPTVN1PROD with NOTICES




                                                in the Prior Release, and in the Notice.                    Exchange’s Internet Web site at http://                   Fee Schedule. The revised fee structure
                                                IV. Conclusion                                              boxexchange.com.
                                                                                                                                                                        5 Non-Auction Transactions are those transactions
                                                  It is therefore ordered, pursuant to                           25 17 CFR 200.30–3(a)(12).                           executed on the BOX Book.
                                                Section 19(b)(2) of the Act,24 that the                          1 15 U.S.C. 78s(b)(1).                                 6 See Securities Exchange Act Release No. 73547
                                                proposed rule change (SR–NASDAQ–                                 2 17 CFR 240.19b–4.
                                                                                                                                                                      (November 6, 2014), 79 FR 67520 (November 13,
                                                                                                                 3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                                                                                                                                      2014) (Notice of Filing and Immediate Effectiveness
                                                  24 15   U.S.C. 78s(b)(2).                                      4 17 CFR 240.19b–4(f)(2).                            of SR–BOX–2014–25).



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Document Created: 2018-02-23 09:12:18
Document Modified: 2018-02-23 09:12:18
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 39166 

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