81 FR 42768 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change to List and Trade the Shares of the VanEck Vectors Long/Flat Commodity ETF

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 126 (June 30, 2016)

Page Range		42768-42777
FR Document		2016-15454
Federal Register, Volume 81 Issue 126 (Thursday, June 30, 2016)
[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Notices]
[Pages 42768-42777]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15454]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78150; File No. SR-NASDAQ-2016-086]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change to List and Trade the Shares 
of the VanEck Vectors Long/Flat Commodity ETF

June 24, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 10, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade the shares of the VanEck 
Vectors Long/Flat Commodity ETF (the ``Fund''), a series of VanEck 
Vectors ETF Trust (``Trust''), under Nasdaq Rule 5735 (``Managed Fund 
Shares''). The shares of the Fund are collectively referred to herein 
as the ``Shares.''
    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at Nasdaq's principal office, and at the 
Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to list and trade the Shares of the Fund 
under Nasdaq Rule 5735, which governs the listing and trading of 
Managed Fund Shares \3\ on the Exchange.\4\ The Fund will be an 
actively managed exchange-traded fund (``ETF''). The Shares will be 
offered by the Trust, which was organized as a Delaware statutory trust 
on March 15, 2001.\5\ The Trust is registered with the Commission as an 
investment company and has filed a registration statement on Form N-1A 
(``Registration Statement'') with the Commission.\6\ The Fund is a 
series of the Trust.
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    \3\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1) (the ``1940 Act'') organized 
as an open-end investment company or similar entity that invests in 
a portfolio of securities selected by its investment adviser 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Index Fund Shares, listed 
and traded on the Exchange under Nasdaq Rule 5705, seeks to provide 
investment results that correspond generally to the price and yield 
performance of a specific foreign or domestic stock index, fixed 
income securities index or combination thereof.
    \4\ The Commission approved Nasdaq Rule 5735 in Securities 
Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June 
20, 2008) (SR-NASDAQ-2008-039). The Fund would not be the first 
actively-managed fund listed on the Exchange; see Securities 
Exchange Act Release No. 66489 (February 29, 2012), 77 FR 13379 
(March 6, 2012) (SR-NASDAQ-2012-004) (order approving listing and 
trading of WisdomTree Emerging Markets Corporate Bond Fund). The 
Exchange believes the proposed rule change raises no significant 
issues not previously addressed in those prior Commission orders.
    \5\ The Commission has issued an order granting certain 
exemptive relief to the Trust under the 1940 Act (the ``Exemptive 
Order''). See Investment Company Act Release No. 29571 (January 24, 
2011) (File No. 812-13601). In compliance with Nasdaq Rule 
5735(b)(5), which applies to Managed Fund Shares based on an 
international or global portfolio, the Trust's application for 
exemptive relief under the 1940 Act states that the Fund will comply 
with the federal securities laws in accepting securities for 
deposits and satisfying redemptions with redemption securities, 
including that the securities accepted for deposits and the 
securities used to satisfy redemption requests are sold in 
transactions that would be exempt from registration under the 
Securities Act of 1933 (15 U.S.C. 77a).
    \6\ See Registration Statement on Form N-1A for the Trust, dated 
November 12, 2015 (File Nos. 333-123257 and 811-10325). The 
descriptions of the Fund and the Shares contained herein are based, 
in part, on information in the Registration Statement.
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    Van Eck Absolute Return Advisers Corporation will be the investment 
adviser (``Adviser'') and the

[[Page 42769]]

administrator to the Fund. Van Eck Securities Corporation 
(``Distributor'') will be the distributor of the Fund's Shares. The 
Bank of New York Mellon (``Custodian'') will act as the custodian of 
the Fund's assets and provide transfer agency and fund accounting 
services to the Fund.
    Paragraph (g) of Rule 5735 provides that if the investment adviser 
to the investment company issuing Managed Fund Shares is affiliated 
with a broker-dealer, such investment adviser shall erect a ``fire 
wall'' between the investment adviser and the broker-dealer with 
respect to access to information concerning the composition and/or 
changes to such investment company portfolio.\7\ In addition, paragraph 
(g) further requires that personnel who make decisions on the open-end 
fund's portfolio composition must be subject to procedures designed to 
prevent the use and dissemination of material, non-public information 
regarding the open-end fund's portfolio.
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    \7\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser and its related personnel are 
subject to the provisions of Rule 204A-1 under the Advisers Act 
relating to codes of ethics. This Rule requires investment advisers 
to adopt a code of ethics that reflects the fiduciary nature of the 
relationship to clients as well as compliance with other applicable 
securities laws. Accordingly, procedures designed to prevent the 
communication and misuse of non-public information by an investment 
adviser must be consistent with Rule 204A-1 under the Advisers Act. 
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful 
for an investment adviser to provide investment advice to clients 
unless such investment adviser has (i) adopted and implemented 
written policies and procedures reasonably designed to prevent 
violation, by the investment adviser and its supervised persons, of 
the Advisers Act and the Commission rules adopted thereunder; (ii) 
implemented, at a minimum, an annual review regarding the adequacy 
of the policies and procedures established pursuant to subparagraph 
(i) above and the effectiveness of their implementation; and (iii) 
designated an individual (who is a supervised person) responsible 
for administering the policies and procedures adopted under 
subparagraph (i) above.
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    Rule 5735(g) is similar to Nasdaq Rule 5705(b)(5)(A)(i); however, 
paragraph (g) operates in connection with the establishment of a ``fire 
wall'' between the investment adviser and the broker-dealer reflects 
the applicable open-end fund's portfolio, not an underlying benchmark 
index, as is the case with index-based funds.
    The Adviser is not a broker-dealer, although it is affiliated with 
the Distributor, a broker-dealer. The Adviser has implemented a fire 
wall with respect to its broker-dealer affiliate regarding access to 
information concerning the composition and/or changes to the Fund's 
(including the Subsidiary's) portfolio.
    In the event (a) the Adviser becomes newly affiliated with a 
broker-dealer or registers as a broker-dealer, or (b) any new adviser 
or sub-adviser to the Fund is a registered broker-dealer or becomes 
affiliated with a broker-dealer, it will implement a fire wall with 
respect to its relevant personnel and/or such broker-dealer affiliate, 
if applicable, regarding access to information concerning the 
composition and/or changes to the portfolio and will be subject to 
procedures designed to prevent the use and dissemination of material 
non-public information regarding such portfolio. The Fund does not 
currently intend to use a sub-adviser.
VanEck Vectors Long/Flat Commodity ETF
    The Fund's investment objective will be to seek long-term capital 
appreciation while seeking to manage volatility and reduce downside 
risk during sustained market declines.
Principal Investment Strategies
    The Fund will be an actively managed ETF that seeks to achieve its 
investment objective by investing, under normal circumstances, in 
exchange-traded commodity futures contracts and, under certain limited 
circumstances, other commodity-linked instruments (``Other Commodity 
Instruments'' \8\ and, collectively with exchange-traded commodity 
futures contracts, ``Commodities Instruments'').
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    \8\ Other Commodity Instruments will include commodity-based 
swap agreements cleared through a central clearing house or the 
clearing house's affiliate (``Cleared Swaps''), forward contracts on 
commodities, exchange-traded options on futures contracts, and 
commodity-based swaps other than Cleared Swaps.
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    The Fund will invest in Commodities Instruments primarily through a 
wholly-owned subsidiary of the Fund organized under the laws of the 
Cayman Islands (``Subsidiary''). The Subsidiary will be advised by the 
Adviser.
    With respect to the exchange-traded commodity futures contracts and 
options on futures contracts (if applicable) held, not more than 10% of 
the weight \9\ of such futures contracts and options on futures 
contracts in the aggregate shall consist of instruments whose principal 
trading market is not a member of the Intermarket Surveillance Group 
(``ISG'') or is a market with which the Exchange does not have a 
comprehensive surveillance sharing agreement.
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    \9\ To be calculated as the value of the contract divided by the 
total absolute notional value of the Fund's futures contracts and 
options on futures contracts.
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    The Fund (directly or indirectly through the Subsidiary) will 
normally invest in exchange-traded commodity futures contracts that are 
components of the Morningstar[supreg] Long/Flat Commodity Index\SM\ 
(``Benchmark''), an index composed of futures contracts on 20 heavily 
traded commodities across the energy, agriculture, industrial metals, 
precious metals, and livestock sectors. The Adviser will employ a 
rules-based investment approach when selecting Commodities Instruments 
based upon momentum characteristics of the Commodities Instruments. 
Commodities Instruments are assessed on a monthly basis by comparing 
current prices to 12-month moving averages. The Fund's positions will 
be either long \10\ or flat.\11\ The Fund intends to take long 
positions in those Commodities Instruments whose prices are above their 
12-month moving average. Conversely, the Fund intends to take flat 
positions to manage volatility and reduce downside risk for those 
Commodities Instruments whose prices are below their 12-month moving 
average. The Fund will not be an ``index tracking'' ETF and may not 
always invest in all of the Benchmark's components, or in the same 
proportion, and it may invest in Commodities Instruments outside the 
Benchmark.
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    \10\ A ``long'' position is a position that will increase in 
market price if the price of the commodity futures contract is 
rising during the period when the position is open.
    \11\ A ``flat'' position is a position that will not increase or 
decrease in market price whether the price of the commodity futures 
contract to which it relates is rising or falling.
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    The Subsidiary will be an exempted company operating under Cayman 
Islands law. It will be wholly-owned and controlled by the Fund and 
will be advised by the Adviser. The Fund's investment in the Subsidiary 
may not exceed 25% of the value of the Fund's total assets at each 
quarter-end of the Fund's fiscal year. The Fund's investment in the 
Subsidiary is expected to provide the Fund with exposure to Commodities 
Instruments within the limits of the federal tax laws, which limit the 
ability of investment companies like the Fund to invest directly in 
such instruments. The Subsidiary will have the same investment 
objective as the Fund and will follow the same general investment 
policies and restrictions, except that unlike the Fund, it may invest 
without limit in Commodities Instruments.
    The Fund (and the Subsidiary, as applicable) expects to invest its 
remaining assets in any one or more of the following: U.S. government 
securities,\12\ money market funds, cash

[[Page 42770]]

and other cash equivalents,\13\ treasury inflation-protected 
securities, sovereign debt obligations of non-U.S. countries and 
repurchase agreements that provide liquidity, serve as margin or 
collateralize the Fund's or the Subsidiary's investments in exchange-
traded commodity futures contracts.
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    \12\ Such securities will include securities that are issued or 
guaranteed by the U.S. Treasury, by various agencies of the U.S. 
government, or by various instrumentalities, which have been 
established or sponsored by the U.S. government. U.S. Treasury 
obligations are backed by the ``full faith and credit'' of the U.S. 
government. Securities issued or guaranteed by federal agencies and 
U.S. government-sponsored instrumentalities may or may not be backed 
by the full faith and credit of the U.S. government.
    \13\ Cash equivalents will include banker's acceptances, 
commercial paper, and certificates of deposit.
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    The Fund also may invest directly in ETFs, exchange-traded closed 
end funds (to the extent permitted by the 1940 Act, and certain 
exemptive relief therefrom), and exchange-traded notes (``ETNs'') that 
provide exposure to commodities.\14\
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    \14\ An ETF is an investment company registered under the 1940 
Act that holds a portfolio of securities. Many ETFs are designed to 
track the performance of a securities index, including industry, 
sector, country and region indexes. ETFs in which the Fund invests 
will be listed and traded in the U.S. on registered exchanges. The 
ETFs in which the Fund will invest include Index Fund Shares (as 
described in Nasdaq Rule 5705), Portfolio Depositary Receipts (as 
described in Nasdaq Rule 5705), and Managed Fund Shares (as 
described in Nasdaq Rule 5735). The shares of ETFs in which the Fund 
may invest will be limited to securities that trade in markets that 
are members of the ISG, which includes all U.S. national securities 
exchanges, or exchanges that are parties to a comprehensive 
surveillance sharing agreement with the Exchange. An ETN is a 
senior, unsecured, unsubordinated debt security issued by an 
underwriting bank that, similar to other debt securities, has a 
maturity date and is backed only by the credit of the issuer. ETNs 
in which the Fund invests will be listed and traded in the U.S. on 
registered exchanges. The ETNs in which the Fund will invest include 
Securities Linked to the Performance of Indexes and Commodities, 
Including Currencies (as described in Nasdaq Rule 5710), and Index-
Linked Exchangeable Notes (as described in Nasdaq Rule 5711). The 
Fund will not hold inverse, leveraged, and inverse leveraged ETFs or 
ETNs. Leveraged instruments are operated in a manner designed to 
seek a multiple of the performance of an underlying reference index, 
and inverse instruments are designed to seek investment results that 
correspond to the inverse (opposite) of the performance of a 
specified domestic equity, international or global equity, or fixed 
income index or a combination thereof.
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    As previously noted, the Subsidiary will be advised by the 
Adviser.\15\ The Subsidiary will typically consider investing in 
futures contracts of the Benchmark (``Index Commodity Contracts'') set 
forth in the following table. The table also provides each instrument's 
trading hours, exchange (``Futures Exchange'') and ticker symbol. The 
table is subject to change.
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    \15\ The Subsidiary will not be registered under the 1940 Act 
and will not be directly subject to its investor protections, except 
as noted in the Registration Statement. However, the Subsidiary will 
be wholly-owned and controlled by the Fund and will be advised by 
the Adviser. The Trust's board (``Board'') will have oversight 
responsibility for the investment activities of the Fund, including 
its investment in the Subsidiary, and the Fund's role as the sole 
shareholder of the Subsidiary. The Adviser will receive certain fees 
for managing the Subsidiary's assets and the Adviser will waive or 
credit such amounts against the fees payable to the Adviser by the 
Fund. It is expected that the Subsidiary will become party to the 
existing custody agreement, transfer agency agreement and accounting 
agreement of the Trust and Fund.

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     Contract ticker            Exchange code                                                      Trading hours
   (Bloomberg generic)        (Bloomberg) \16\        Exchange name \17\     Commodity contract        (ET)
----------------------------------------------------------------------------------------------------------------
BO1.....................  CBT.....................  Chicago Board of       Soybean Oil/Crude....     20:00-14:20
                                                     Trade.
C 1.....................  CBT.....................  Chicago Board of       Corn/No. 2 Yellow....     20:00-14:20
                                                     Trade.
CO1.....................  ICE.....................  ICE Futures Europe     Crude Oil Brent/          20:00-18:00
                                                     Commodities.           Global Spot.
CL1.....................  NYM.....................  New York Mercantile    Crude Oil WTI/Global      18:00-17:15
                                                     Exchange.              Spot.
CT1.....................  NYB.....................  ICE Futures US Softs.  Cotton/1\1/16\''.....     21:00-14:20
GC1.....................  CMX.....................  Commodity Exchange,    Gold.................     18:00-17:15
                                                     Inc.
HG1.....................  CMX.....................  Commodity Exchange,    Copper High Grade/        18:00-17:15
                                                     Inc.                   Scrap No. 2 Wire.
HO1.....................  NYM.....................  New York Mercantile    Heating Oil #2/Fuel       18:00-17:15
                                                     Exchange.              Oil.
KC1.....................  NYB.....................  ICE Futures US Softs.  Coffee `C'/Colombian.     04:15-13:30
LC1.....................  CME.....................  Chicago Mercantile     Cattle Live/Choice        09:00-17:00
                                                     Exchange.              Average.
QS1.....................  ICE.....................  ICE Futures Europe     Gas-Oil-Petroleum....     20:00-18:00
                                                     Commodities.
LH1.....................  CME.....................  Chicago Mercantile     Hogs Lean/Average         09:00-17:00
                                                     Exchange.              Iowa/S Minn.
NG1.....................  NYM.....................  New York Mercantile    Natural Gas Henry Hub     18:00-17:15
                                                     Exchange.
XB1.....................  NYM.....................  New York Mercantile    Gasoline Blendstock..     18:00-17:15
                                                     Exchange.
S 1.....................  CBT.....................  Chicago Board of       Soybeans/No. 2 Yellow     20:00-14:20
                                                     Trade.
SB1.....................  NYB.....................  ICE Futures US Softs.  Sugar #11/World Raw..     03:30-13:00
SI1.....................  CMX.....................  Commodity Exchange,    Silver...............     18:00-17:15
                                                     Inc.
SM1.....................  CBT.....................  Chicago Board of       Soybean Meal/48%          20:00-14:20
                                                     Trade.                 Protein.
W 1.....................  CBT.....................  Chicago Board of       Wheat/No. 2 Soft Red.     20:00-14:20
                                                     Trade.
CC1.....................  NYB.....................  ICE Futures US Softs.  Cocoa/Ivory Coast....     04:45-13:30
----------------------------------------------------------------------------------------------------------------

    As U.S. and London exchanges list additional contracts, as 
currently listed contracts on those exchanges gain sufficient liquidity 
or as other exchanges list sufficiently liquid contracts, the Adviser 
may include those contracts in the list of possible investments of the 
Subsidiary. The list of commodities futures and commodities markets 
considered for investment may change over time.
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    \16\ The exchange codes listed are Bloomberg shorthand codes for 
the corresponding exchanges. The New York Board of Trade is 
currently owned by the ICE Futures Exchange; Bloomberg continues to 
use NYB as its shorthand code for certain contracts formerly traded 
on the New York Board of Trade.
    \17\ All of the exchanges are ISG members.
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Other Investments
    The Fund currently intends to invest first in exchange-traded 
commodity futures contracts. Thereafter, if the Fund reaches the 
position limits applicable to one or more Index Commodity Contracts or 
a Futures Exchange imposes limitations on the Fund's ability to 
maintain or increase its positions in an exchange-traded commodity 
futures contract after reaching accountability levels or a price limit 
is in effect on an exchange-traded commodity futures contract during 
the last 30 minutes of its regular trading session, the Fund's 
intention is to invest first in Cleared Swaps to the extent permitted 
under the position limits applicable to Cleared Swaps and appropriate 
in light of the liquidity in the Cleared Swaps market, and then, using 
its commercially reasonable judgment, in Other Commodity Instruments.

[[Page 42771]]

    The Fund may also invest in commodity-related foreign and domestic 
equity securities.\18\
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    \18\ Commodity-related foreign and domestic 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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Commodities Regulation
    The Commodity Futures Trading Commission (``CFTC'') has recently 
adopted substantial amendments to CFTC Rule 4.5 relating to the 
permissible exemptions and conditions for reliance on exemptions from 
registration as a commodity pool operator.\19\ As a result of the 
amendments and based on the Fund's and its Subsidiary's current 
investment strategies, the Fund and the Subsidiary will each be a 
``commodity pool'' and the Adviser, which is currently registered with 
the CFTC as a commodity pool operator (``CPO'') and a commodity trading 
adviser under the Commodity Exchange Act of 1936, is considered a CPO 
with respect to the Fund and the Subsidiary. The Adviser is also a 
member of the National Futures Association (``NFA''). The Fund will be 
and the Adviser is subject to regulation by the CFTC and the Commission 
and additional disclosure, reporting and recordkeeping rules imposed 
upon commodity pools.
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    \19\ 17 CFR 4.5. See, e.g., 77 FR 11252 (Feb. 24, 2014); 77 FR 
17328 (March 26, 2012).
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Investment Restrictions of the Fund \20\
    The Fund may not make loans, except that it may (i) lend portfolio 
securities, (ii) enter into repurchase agreements, (iii) purchase all 
or a portion of an issue of debt securities, bank loan or participation 
interests, bank certificates of deposit, bankers' acceptances, 
debentures or other securities, whether or not the purchase is made 
upon the original issuance of the securities, and (iv) participate in 
an interfund lending program with other registered investment 
companies, all in accordance with the 1940 Act.
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    \20\ Percentage limitations of the investment restrictions set 
forth herein are measured at the time of investment.
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    The Fund may not borrow money, except as permitted under the 1940 
Act, and as interpreted or modified by regulation from time to time. 
The Fund also may not issue senior securities, except as permitted 
under the 1940 Act, and as interpreted or modified by regulation from 
time to time.
    The Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid assets (calculated at the time of investment).\21\ 
The Fund will monitor its portfolio liquidity on an ongoing basis to 
determine whether, in light of current circumstances, an adequate level 
of liquidity is being maintained, and will consider taking appropriate 
steps in order to maintain adequate liquidity if, through a change in 
values, net assets, or other circumstances, more than 15% of the Fund's 
net assets are held in illiquid assets. Illiquid assets include 
securities subject to contractual or other restrictions on resale and 
other instruments that lack readily available markets as determined in 
accordance with Commission staff guidance.\22\ An illiquid security is 
generally considered to be a security that cannot be sold or disposed 
of in the ordinary course of business within seven days at or near its 
carrying value.
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    \21\ In reaching liquidity decisions, the Adviser may consider 
factors such as but not limited to the following: The frequency of 
trades and quotes for the security; the number of dealers wishing to 
purchase or sell the security and the number of other potential 
purchasers; dealer undertakings to make a market in the security; 
and the nature of the security and the nature of the marketplace in 
which it trades (e.g., the time needed to dispose of the security, 
the method of soliciting offers and the mechanics of transfer).
    \22\ The Commission has stated that long-standing Commission 
guidelines have required open-end funds to hold no more than 15% of 
their net assets in illiquid securities and other illiquid assets. 
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR 
14618 (March 18, 2008), footnote 34. See also Investment Company Act 
Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970) 
(Statement Regarding ``Restricted Securities''); Investment Company 
Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992) 
(Revisions of Guidelines to Form N-1A). A fund's portfolio security 
is illiquid if it cannot be disposed of in the ordinary course of 
business within seven days at approximately the value ascribed to it 
by the fund. See Investment Company Act Release No. 14983 (March 12, 
1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a-7 
under the 1940 Act); Investment Company Act Release No. 17452 (April 
23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under 
the Securities Act of 1933).
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    The Fund may not purchase any security if, as a result of that 
purchase, 25% or more of its total assets would be invested in 
securities of issuers having their principal business activities in the 
same industry. This limit does not apply to securities issued or 
guaranteed by the U.S. Government, its agencies or instrumentalities, 
or securities of other investment companies.
Determination of Net Asset Value
    The net asset value (``NAV'') per Share for the Fund will be 
computed by dividing the value of the net assets of the Fund (i.e., the 
value of its total assets less total liabilities) by the total number 
of Shares outstanding. Expenses and fees, including the management fee, 
will be accrued daily and taken into account for purposes of 
determining NAV. The NAV of the Fund will be determined each business 
day as of the close of trading (ordinarily 4:00 p.m. Eastern Time) on 
the Nasdaq. Any assets or liabilities denominated in currencies other 
than the U.S. dollar will be converted into U.S. dollars at the current 
market rates on the date of valuation as quoted by one or more sources.
    The values of the Fund's portfolio securities will be valued in 
accordance with the Trust's valuation policies and procedures which may 
be amended from time to time. Included herein is a description of how 
various types of securities and instruments will be valued based on the 
current valuation policies and procedures for the Trust. ETFs, 
exchange-traded closed-end funds, ETNs, and commodity-related foreign 
and domestic equity securities, will be based on the securities' 
closing prices on local markets, when available. Due to the time 
differences between the United States and certain countries, securities 
on these non-U.S. exchanges may not trade at times when Shares of the 
Fund will trade. In the absence of a last reported sales price, or if 
no sales were reported, and for other assets for which market quotes 
are not readily available, values may be based on quotes obtained from 
a quotation reporting system, established market makers or by an 
outside independent pricing service using data reflecting the earlier 
closing of the principal markets for those securities. U.S. government 
securities, treasury inflation-protected securities and sovereign debt 
obligations of non-U.S. countries will normally be valued on the basis 
of quotes from brokers or dealers, established market makers or an 
outside independent pricing service. Short-term investments purchased 
with a remaining maturity of 60 days or less, including repurchase 
agreements and cash equivalents, will be valued on the basis of quotes 
from broker dealers, established major market makers, an independent 
pricing service or at amortized cost. Money market funds will be valued 
at their reported closing NAV. Futures contracts and options on futures 
contracts, which are traded on exchanges, will be valued at the current 
settle price for like contracts acquired on the day on which the 
futures contract will be valued as of the close of such exchanges.
    Other Commodity Instruments not traded on exchanges will generally 
be valued daily based upon quotations from market makers or by a 
pricing service and in accordance with the Trust's valuation policies 
and procedures. Prices obtained by an

[[Page 42772]]

outside independent pricing service may use information provided by 
market makers or estimates of market values obtained from yield data 
related to investments or securities with similar characteristics and 
may use a computerized grid matrix of securities and its evaluations in 
determining what it believes is the fair value of the portfolio 
securities. If a market quotation for a security is not readily 
available or the Adviser believes it does not otherwise accurately 
reflect the market value of the security at the time the Fund 
calculates its NAV, the security will be fair valued by the Adviser in 
accordance with the Trust's valuation policies and procedures approved 
by the Board of Trustees.
    The Fund may also use fair value pricing in a variety of 
circumstances, including but not limited to, situations when the value 
of a security or instrument in the Fund's portfolio has been materially 
affected by events occurring after the close of the market on which the 
security or instrument is principally traded (such as a corporate 
action or other news that may materially affect the price of a 
security) or trading in a security or instrument has been suspended or 
halted.
    In addition, the Fund expects that it will fair value certain of 
the foreign equity securities held by the Fund each day it calculates 
its NAV, except those securities principally traded on exchanges that 
close at the same time the Fund calculates its NAV. Accordingly, the 
Fund's NAV may reflect certain portfolio securities' or instruments' 
fair values rather than their market prices at the time the exchanges 
on which they principally trade close. Fair value pricing involves 
subjective judgments and it is possible that a fair value determination 
for a security or instrument will be materially different than the 
value that could be realized upon the sale of the security or 
instrument. With respect to securities or instruments that are 
principally traded on foreign exchanges, the value of the Fund's 
portfolio securities or instruments may change on days when you will 
not be able to purchase or sell your Shares.
Creation and Redemption of Shares
    The Trust will issue and sell Shares of the Fund only to authorized 
participants (``Authorized Participants'') and only in aggregations of 
50,000 Shares (each, a ``Creation Unit''), on a continuous basis 
through the Distributor, without an initial sales load, at their NAV 
next determined after receipt, on any Business Day,\23\ of an order in 
proper form.
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    \23\ A ``Business Day'' with respect to the Fund is any day on 
which Nasdaq is open for business. As of the date of this filing, 
the Nasdaq observes the following holidays: New Year's Day, Martin 
Luther King, Jr. Day, President's Day (Washington's Birthday), Good 
Friday, Memorial Day (observed), Independence Day, Labor Day, 
Thanksgiving Day, and Christmas Day.
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    The consideration for a purchase of Creation Units will generally 
consist of cash and/or the in-kind deposit of a designated portfolio of 
securities (``Deposit Securities'') and an amount of cash computed as 
described below (``Cash Component''). The Cash Component together with 
the Deposit Securities, as applicable, will be referred to as the 
``Fund Deposit,'' which represents the minimum initial and subsequent 
investment amount for Shares. The Cash Component will represent the 
difference between the NAV of a Creation Unit and the market value of 
Deposit Securities and may include a Dividend Equivalent Payment. The 
``Dividend Equivalent Payment'' will enable the Fund to make a complete 
distribution of dividends on the next dividend payment date, and will 
be an amount equal, on a per Creation Unit basis, to the dividends on 
all the securities held by the Fund (``Fund Securities'') with ex-
dividend dates within the accumulation period for such distribution 
(the ``Accumulation Period''), net of expenses and liabilities for such 
period, as if all of the Fund Securities had been held by the Trust for 
the entire Accumulation Period. The Accumulation Period will begin on 
the ex-dividend date for the Fund and will end on the next ex-dividend 
date.
    The Administrator, through the NSCC, will make available on each 
Business Day, immediately prior to the opening of business on the 
Exchange (currently 9:30 a.m. Eastern Time), the list of the names and 
the required number of shares of each Deposit Security to be included 
in the current Fund Deposit (based on information at the end of the 
previous Business Day) as well as the Cash Component for the Fund. Such 
Fund Deposit will be applicable, subject to any adjustments as 
described below, in order to effect creations of Creation Units of the 
Fund until such time as the next-announced Fund Deposit composition is 
made available.
    The identity and number of shares of the Deposit Securities 
required for the Fund Deposit for the Fund may change as rebalancing 
adjustments and corporate action events occur from time to time. In 
addition, the Trust will reserve the right to accept a basket of 
securities or cash that differs from Deposit Securities or to permit or 
require the substitution of an amount of cash (i.e., a ``cash in lieu'' 
amount) to be added to the Cash Component to replace any Deposit 
Security which may, among other reasons, not be available in sufficient 
quantity for delivery or not be permitted to be re-registered in the 
name of the Trust as a result of an in-kind creation order pursuant to 
local law or market convention or which may not be eligible for 
transfer through the Clearing Process, or which may not be eligible for 
trading by a Participating Party (defined below).
    In light of the foregoing, in order to seek to replicate the in-
kind creation order process, the Trust expects to purchase the Deposit 
Securities represented by the cash in lieu amount in the secondary 
market (``Market Purchases''). In such cases where the Trust makes 
Market Purchases because a Deposit Security may not be permitted to be 
re-registered in the name of the Trust as a result of an in-kind 
creation order pursuant to local law or market convention, or for other 
reasons, the Authorized Participant will reimburse the Trust for, among 
other things, any difference between the market value at which the 
securities were purchased by the Trust and the cash in lieu amount 
(which amount, at the Adviser's discretion, may be capped), applicable 
registration fees and taxes.
    Brokerage commissions incurred in connection with the Trust's 
acquisition of Deposit Securities will be at the expense of the Fund 
and will affect the value of all Shares of the Fund; but the Adviser 
may adjust the transaction fee to the extent the composition of the 
Deposit Securities changes or cash in lieu is added to the Cash 
Component to protect ongoing shareholders. The adjustments described 
above will reflect changes, known to the Adviser on the date of 
announcement to be in effect by the time of delivery of the Fund 
Deposit, resulting from stock splits and other corporate actions.
    In addition to the list of names and numbers of securities 
constituting the current Deposit Securities of the Fund Deposit, the 
Administrator, through the NSCC, will also make available (i) on each 
Business Day, the Dividend Equivalent Payment, if any, and the 
estimated Cash Component effective through and including the previous 
Business Day, per outstanding Shares of the Fund, and (ii) on a 
continuous basis throughout the day, the Indicative Optimized Portfolio 
Value (``IOPV'').
    To be eligible to place orders with the Distributor to create and 
redeem

[[Page 42773]]

Creation Units of the Fund, an Authorized Participant must be (1) a 
``Participating Party,'' i.e., a broker-dealer or other participant in 
the Clearing Process through the Continuous Net Settlement System of 
the NSCC; or (2) a DTC Participant; and, in either case, must have 
executed an agreement with the Distributor and the Transfer Agent (as 
it may be amended from time to time in accordance with its terms) with 
respect to the purchases and redemptions of Creation Units. All 
Creation Units of the Fund, however created, will be entered on the 
records of the Depository in the name of Cede & Co. for the account of 
a DTC Participant.
    All orders to create Creation Units must be received by the 
Distributor no later than the closing time of the regular trading 
session on Nasdaq (``Closing Time'') (ordinarily 4:00 p.m., Eastern 
Time) on the date such order is placed in order for creation of 
Creation Units to be effected based on the NAV of the Fund as 
determined on such date.
    Shares may be redeemed only in Creation Units at their NAV next 
determined after receipt of a redemption request in proper form by the 
Distributor, only on a Business Day and only through a Participating 
Party or DTC Participant who has executed a Participant Agreement. In 
order to redeem Creation Units, an Authorized Participant must submit 
an order to redeem for one or more Creation Units. All such orders must 
be received by the Distributor in proper form no later than Closing 
Time in order to receive the day's closing NAV per share.
    To the extent the Fund's redemptions are effected in-kind, the 
Administrator, through NSCC, makes available immediately prior to the 
opening of business on the Exchange (currently, 9:30 a.m., Eastern 
Time) on each day that the Nasdaq is open for business, the Fund 
Securities that will be applicable (subject to possible amendment or 
correction) to redemption requests received in proper form (as defined 
below) on that day.
    Unless cash redemptions are permitted or required for the Fund, the 
redemption proceeds for a Creation Unit generally consist of Fund 
Securities as announced by the Administrator on the Business Day of the 
request for redemption, plus cash in an amount equal to the difference 
between the NAV of the Shares being redeemed, as next determined after 
a receipt of a request in proper form, and the value of the Fund 
Securities, less the redemption transaction fee and applicable variable 
fees. Should the Fund Securities have a value greater than the NAV of 
the Shares being redeemed, a compensating cash payment to the Trust 
equal to the differential plus the applicable redemption transaction 
fee will be required to be arranged for by or on behalf of the 
redeeming shareholder. The Fund reserves the right to honor a 
redemption request by delivering a basket of securities or cash that 
differs from the Fund Securities.
Availability of Information
    The Fund's Web site (www.vaneck.com), which will be publicly 
available prior to the public offering of Shares, will include a form 
of the prospectus for the Fund that may be downloaded. The Fund's Web 
site will include additional quantitative information updated on a 
daily basis, including, for the Fund: (1) The prior business day's 
reported NAV and closing price, and a calculation of the premium and 
discount of the closing price against the NAV; and (2) data in chart 
format displaying the frequency distribution of discounts and premiums 
of the daily closing price against the NAV, within appropriate ranges, 
for each of the four previous calendar quarters. On each business day, 
before commencement of trading in Shares in the Regular Market Session 
on the Exchange, the Fund will disclose on its Web site the Disclosed 
Portfolio as defined in Nasdaq Rule 5735(c)(2) that will form the basis 
for the Fund's calculation of NAV at the end of the business day.\24\
---------------------------------------------------------------------------

    \24\ Under accounting procedures to be followed by the Fund, 
trades made on the prior business day (``T'') will be booked and 
reflected in NAV on the current business day (``T+1''). Accordingly, 
the Fund will be able to disclose at the beginning of the business 
day the portfolio that will form the basis for the NAV calculation 
at the end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Fund will disclose on the Fund's Web site the 
following information regarding each portfolio holding, as applicable 
to the type of holding: Ticker symbol, CUSIP number or other 
identifier, if any; a description of the holding (including the type of 
holding), the identity of the security or other asset or instrument 
underlying the holding, if any; for options, the option strike price; 
quantity held (as measured by, for example, par value, notional value 
or number of shares, contracts or units); maturity date, if any; coupon 
rate, if any; effective date, if any; market value of the holding; and 
percentage weighting of the holding in the Fund's portfolio. The Web 
site information will be publicly available at no charge.
    In addition, a basket composition file, which includes the security 
names and quantities required to be delivered in exchange for the 
Fund's Shares, together with estimates and actual cash components, will 
be publicly disseminated daily prior to the opening of the Exchange via 
NSCC. The basket represents one Creation Unit of the Fund.
    Also, for the Fund, an IOPV,\25\ defined in Rule 5735(c)(3) as the 
``Intraday Indicative Value,'' that reflects an estimated intraday 
value of the Fund's portfolio (including the Subsidiary's portfolio), 
will be disseminated. Moreover, the Intraday Indicative Value, 
available on the NASDAQ OMX Information LLC proprietary index data 
service \26\ will be based upon the current value for the components of 
the Disclosed Portfolio and will be updated and widely disseminated by 
one or more major market data vendors and broadly displayed at least 
every 15 seconds during the Regular Market Session.
---------------------------------------------------------------------------

    \25\ The IOPV will be based on the current value of the 
securities and other assets held by the Fund and the Subsidiary 
using market data converted into U.S. dollars at the current 
currency rates. The IOPV price will be based on quotes and closing 
prices from the securities' local market and may not reflect events 
that occur subsequent to the local market's close. Premiums and 
discounts between the IOPV and the market price may occur. The IOPV 
will not necessarily reflect the precise composition of the current 
portfolio of securities and assets held by a Fund at a particular 
point in time or the best possible valuation of the current 
portfolio. Therefore, the IOPV should not be viewed as a ``real-
time'' update of a Fund's NAV, which will be calculated only once a 
day. The quotations of certain Fund holdings may not be updated 
during U.S. trading hours if such holdings do not trade in the 
United States.
    \26\ Currently, the NASDAQ OMX Global Index Data Service 
(``GIDS'') is the NASDAQ OMX global index data feed service, 
offering real-time updates, daily summary messages, and access to 
widely followed indexes and Intraday Indicative Values for ETFs. 
GIDS provides investment professionals with the daily information 
needed to track or trade NASDAQ OMX indexes, listed ETFs, or third-
party partner indexes and ETFs.
---------------------------------------------------------------------------

    The dissemination of the Intraday Indicative Value, together with 
the Disclosed Portfolio, will allow investors to determine the value of 
the underlying portfolio of the Fund on a daily basis and will provide 
a close estimate of that value throughout the trading day.
    Intra-day, executable price quotations on the exchange-traded 
assets held by the Fund and the Subsidiary, including futures 
contracts, options on futures contracts, ETFs, ETNs, closed-end funds 
and foreign and domestic equity securities are expected to be available 
on the exchange on which they are traded. Intra-day, executable price 
quotations on swaps, money market funds, forward contracts, U.S. 
government securities, cash and other cash equivalents, treasury 
inflation-

[[Page 42774]]

protected securities, sovereign debt obligations of non-U.S. countries 
and repurchase agreements will be available from major broker-dealer 
firms. Intra-day price information will also be available through 
subscription services, such as Bloomberg and Reuters. Additionally, the 
Trade Reporting and Compliance Engine (``TRACE'') of the Financial 
Industry Regulatory Authority (``FINRA'') will be a source of price 
information for certain fixed income securities held by the Fund.
    Investors will also be able to obtain the Fund's Statement of 
Additional Information (``SAI''), the Fund's Shareholder Reports, and 
its Form N-CSR and Form N-SAR, filed twice a year. The Fund's SAI and 
Shareholder Reports will be available free upon request from the Fund, 
and those documents and the Form N-CSR and Form N-SAR may be viewed on-
screen or downloaded from the Commission's Web site at www.sec.gov. 
Information regarding market price and volume of the Shares will be 
continually available on a real-time basis throughout the day on 
brokers' computer screens and other electronic services. The previous 
day's closing price and trading volume information for the Shares will 
be published daily in the financial section of newspapers. Quotation 
and last sale information for the Shares will be available via Nasdaq 
proprietary quote and trade services, as well as in accordance with the 
Unlisted Trading Privileges and the Consolidated Tape Association plans 
for the Shares. Quotation and last sale information for any underlying 
exchange-traded equity will also be available via the quote and trade 
service of their respective primary exchanges, as well as in accordance 
with the Unlisted Trading Privileges and the Consolidated Tape 
Association plans. Quotation and last sale information for any 
underlying exchange-traded options will also be available via the quote 
and trade service of their respective primary exchanges. Quotation and 
last sale information for any underlying exchange-traded futures 
contracts will be available via the quote and trade service of their 
respective primary exchanges.
    Information on the Morningstar Long/Flat Commodity 
Index^SM will be available on the Morningstar Indexes Web 
site (www.indexes.morningstar.com).
Initial and Continued Listing
    The Shares will be subject to Rule 5735, which sets forth the 
initial and continued listing criteria applicable to Managed Fund 
Shares. The Exchange represents that, for initial and/or continued 
listing, the Fund and the Subsidiary must be in compliance with Rule 
10A-3 \27\ under the Act. A minimum of 100,000 Shares will be 
outstanding at the commencement of trading on the Exchange. The 
Exchange will obtain a representation from the issuer of the Shares 
that the NAV per Share will be calculated daily and that the NAV and 
the Disclosed Portfolio will be made available to all market 
participants at the same time.
---------------------------------------------------------------------------

    \27\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares of the Fund. Nasdaq will halt trading in the 
Shares under the conditions specified in Nasdaq Rules 4120 and 4121, 
including the trading pauses under Nasdaq Rules 4120(a)(11) and (12). 
Trading may be halted because of market conditions or for reasons that, 
in the view of the Exchange, make trading in the Shares inadvisable. 
These may include: (1) The extent to which trading is not occurring in 
the securities and other assets constituting the Disclosed Portfolio of 
the Fund and the Subsidiary; or (2) whether other unusual conditions or 
circumstances detrimental to the maintenance of a fair and orderly 
market are present. Trading in the Shares also will be subject to Rule 
5735(d)(2)(D), which sets forth circumstances under which Shares of the 
Fund may be halted.
Trading Rules
    Nasdaq deems the Shares to be equity securities, thus rendering 
trading in the Shares subject to Nasdaq's existing rules governing the 
trading of equity securities. Nasdaq will allow trading in the Shares 
from 4:00 a.m. until 8:00 p.m. Eastern Time. The Exchange has 
appropriate rules to facilitate transactions in the Shares during all 
trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum 
price variation for quoting and entry of orders in Managed Fund Shares 
traded on the Exchange is $0.01.
Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances, administered by both Nasdaq and 
also the Financial Industry Regulatory Authority (``FINRA'') on behalf 
of the Exchange, which are designed to detect violations of Exchange 
rules and applicable federal securities laws.\28\ The Exchange 
represents that these procedures are adequate to properly monitor 
Exchange trading of the Shares in all trading sessions and to deter and 
detect violations of Exchange rules and applicable federal securities 
laws.
---------------------------------------------------------------------------

    \28\ FINRA surveils trading on the Exchange pursuant to a 
regulatory services agreement. The Exchange is responsible for 
FINRA's performance under this regulatory services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows, and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading information it can obtain relating to the Shares, 
other exchange-traded securities and other assets held by the Fund and 
the Subsidiary, which include exchange-traded commodity-related equity 
securities, exchange-traded futures contracts, exchange-traded options 
on futures contracts, ETNs, ETFs and exchange-traded closed-end funds, 
with other markets and other entities that are members of the ISG \29\ 
and FINRA may obtain trading information regarding trading in the 
Shares, and such exchange-traded securities and other assets held by 
the Fund and the Subsidiary from such markets and other entities. In 
addition, the Exchange may obtain information regarding trading in the 
Shares, and such exchange-traded securities and other assets held by 
the Fund and the Subsidiary from markets and other entities that are 
members of ISG, which includes securities and futures exchanges, or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement. Moreover, FINRA, on behalf of the Exchange, will be 
able to access, as needed, trade information for certain fixed income 
securities held by the Fund reported to FINRA's TRACE.
---------------------------------------------------------------------------

    \29\ For a list of the current members of ISG, see 
www.isgportal.org. The Exchange notes that not all components of the 
Disclosed Portfolio may trade on markets that are members of ISG or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement.
---------------------------------------------------------------------------

    In addition, with respect to the exchange-traded futures contracts 
and options on futures contracts held, not more than 10% of the weight 
\30\ of such futures contracts and options on futures

[[Page 42775]]

contracts in the aggregate shall consist of instruments whose principal 
trading market is not a member of ISG or is a market with which the 
Exchange does not have a comprehensive surveillance sharing agreement. 
Not more than 10% of the equity securities (including shares of ETFs, 
closed-end funds, and commodity-related foreign and domestic equity 
securities) and ETNs in which the Fund may invest will be invested in 
securities that trade in markets that are not members of the ISG or are 
not parties to a comprehensive surveillance sharing agreement with the 
Exchange. In addition, the Exchange also has a general policy 
prohibiting the distribution of material, non-public information by its 
employees.
---------------------------------------------------------------------------

    \30\ To be calculated as the value of the contract divided by 
the total absolute notional value of the Fund's futures contracts.
---------------------------------------------------------------------------

Information Circular
    Prior to the commencement of trading, the Exchange will inform its 
members in an Information Circular of the special characteristics and 
risks associated with trading the Shares. Specifically, the Information 
Circular will discuss the following: (1) The procedures for purchases 
and redemptions of Shares in Creation Units (and that Shares are not 
individually redeemable); (2) Nasdaq Rule 2111A, which imposes 
suitability obligations on Nasdaq members with respect to recommending 
transactions in the Shares to customers; (3) how and by whom the 
information regarding the Intraday Indicative Value and the Disclosed 
Portfolio is disseminated; (4) the risks involved in trading the Shares 
during the Pre-Market and Post-Market Sessions when an updated Intraday 
Indicative Value will not be calculated or publicly disseminated; (5) 
the requirement that members deliver a prospectus to investors 
purchasing newly issued Shares prior to or concurrently with the 
confirmation of a transaction; and (6) trading information.
    In addition, the Information Circular will advise members, prior to 
the commencement of trading, of the prospectus delivery requirements 
applicable to the Fund. Members purchasing Shares from the Fund for 
resale to investors will deliver a prospectus to such investors. The 
Information Circular will also discuss any exemptive, no-action and 
interpretive relief granted by the Commission from any rules under the 
Act.
    Additionally, the Information Circular will reference that the Fund 
is subject to various fees and expenses. The Information Circular will 
also disclose the trading hours of the Shares of the Fund and the 
applicable NAV calculation time for the Shares. The Information 
Circular will disclose that information about the Shares of the Fund 
will be publicly available on the Fund's Web site.
Continued Listing Representations
    All statements and representations made in this filing regarding 
(a) the description of the portfolio, (b) limitations on portfolio 
holdings or reference assets, or (c) the applicability of Exchange 
rules and surveillance procedures shall constitute continued listing 
requirements for listing the Shares on the Exchange. In addition, the 
issuer has represented to the Exchange that it will advise the Exchange 
of any failure by the Fund to comply with the continued listing 
requirements, and, pursuant to its obligations under Section 19(g)(1) 
of the Act, the Exchange will monitor for compliance with the continued 
listing requirements. If the Fund is not in compliance with the 
applicable listing requirements, the Exchange will commence delisting 
procedures under the Nasdaq 5800 Series.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b) 
of the Act in general and Section 6(b)(5) of the Act in particular in 
that it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and in general, to protect 
investors and the public interest.
    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in Nasdaq Rule 5735. The 
Exchange represents that trading in the Shares will be subject to the 
existing trading surveillances, administered by both Nasdaq and also 
FINRA on behalf of the Exchange, which are designed to detect 
violations of Exchange rules and applicable federal securities laws. 
The Adviser is affiliated with a broker-dealer and has implemented a 
fire wall with respect to its broker-dealer affiliate regarding access 
to information concerning the composition and/or changes to the Fund's 
portfolio. In addition, paragraph (g) of Nasdaq Rule 5735 further 
requires that personnel who make decisions on the open-end fund's 
portfolio composition must be subject to procedures designed to prevent 
the use and dissemination of material, non-public information regarding 
the open-end fund's portfolio.
    The Fund's and the Subsidiary's investments will be consistent with 
the Fund's investment objective and although certain investments will 
have a leveraging effect on the Fund, the Fund will not seek leveraged 
returns. FINRA may obtain information via ISG from other exchanges that 
are members of ISG.
    In addition, the Exchange may obtain information regarding trading 
in the Shares, other exchange-traded securities and other assets held 
by the Fund and the Subsidiary from markets and other entities that are 
members of ISG, which includes securities and futures exchanges, or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement.
    Moreover, FINRA, on behalf of the Exchange, will be able to access, 
as needed, trade information for certain fixed income securities held 
by the Fund reported to FINRA's TRACE. With respect to the futures 
contracts held, not more than 10% of the weight \31\ of such futures 
contracts and options on futures contracts in the aggregate shall 
consist of instruments whose principal trading market is not a member 
of the ISG or is a market with which the Exchange does not have a 
comprehensive surveillance sharing agreement. Not more than 10% of the 
equity securities (including shares of ETFs and closed-end funds, and 
commodity-related foreign and domestic equity securities) and ETNs in 
which the Fund may invest will be invested in securities that trade in 
markets that not members of the ISG or are not parties to a 
comprehensive surveillance sharing agreement with the Exchange.
---------------------------------------------------------------------------

    \31\ To be calculated as the value of the contract divided by 
the total absolute notional value of the Fund's futures contracts.
---------------------------------------------------------------------------

    The Fund will invest up to 25% of its total assets in the 
Subsidiary as measured at each quarter-end of the Fund's fiscal year 
end. The Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid securities (calculated at the time of investment). 
The Fund will use the fixed-income securities as investments and to 
collateralize the Fund's or the Subsidiary's commodity exposure on a 
day-to-day basis. The Fund may also invest directly in ETFs and 
exchange-traded closed-end funds, that provide exposure to commodities, 
equity securities and fixed income securities to the extent permitted 
under the 1940 Act.
    The proposed rule change is designed to promote just and equitable 
principles

[[Page 42776]]

of trade and to protect investors and the public interest in that the 
Exchange will obtain a representation from the issuer of the Shares 
that the NAV per Share will be calculated daily and that the NAV and 
the Disclosed Portfolio will be made available to all market 
participants at the same time.
    In addition, a large amount of information will be publicly 
available regarding the Fund and the Shares, thereby promoting market 
transparency. Moreover, the Intraday Indicative Value, available on the 
NASDAQ OMX Information LLC proprietary index data service will be 
widely disseminated by one or more major market data vendors at least 
every 15 seconds during the Regular Market Session. On each business 
day, before commencement of trading in Shares in the Regular Market 
Session on the Exchange, the Fund will disclose on its Web site the 
Disclosed Portfolio of the Fund and the Subsidiary that will form the 
basis for the Fund's calculation of NAV at the end of the business day.
    Information regarding market price and trading volume of the Shares 
will be continually available on a real-time basis throughout the day 
on brokers' computer screens and other electronic services, and 
quotation and last sale information for the Shares will be available 
via Nasdaq proprietary quote and trade services, as well as in 
accordance with the Unlisted Trading Privileges and the Consolidated 
Tape Association plans for the Shares. Intra-day price information will 
be available through subscription services, such as Bloomberg and 
Reuters.
    The Fund's Web site will include a form of the prospectus for the 
Fund and additional data relating to NAV and other applicable 
quantitative information. Trading in Shares of the Fund will be halted 
under the conditions specified in Nasdaq Rules 4120 and 4121 or because 
of market conditions or for reasons that, in the view of the Exchange, 
make trading in the Shares inadvisable, and trading in the Shares will 
be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances 
under which Shares of the Fund may be halted. In addition, as noted 
above, investors will have ready access to information regarding the 
Fund's holdings, the Intraday Indicative Value, the Disclosed 
Portfolio, and quotation and last sale information for the Shares.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of actively-managed exchange-traded product that 
will enhance competition among market participants, to the benefit of 
investors and the marketplace.
    As noted above, FINRA, on behalf of the Exchange, will communicate 
as needed regarding trading information it can obtain relating to the 
Shares, other exchange-traded securities and other assets held by the 
Fund and the Subsidiary with other markets and other entities that are 
members of the ISG and FINRA may obtain trading information regarding 
trading in the Shares, other exchange-traded securities and other 
assets held by the Fund and the Subsidiary from such markets and other 
entities.
    In addition, the Exchange may obtain information regarding trading 
in the Shares, other exchange-traded securities and other assets held 
by the Fund and the Subsidiary from markets and other entities that are 
members of ISG, which includes securities and futures exchanges, or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement.
    Additionally, FINRA's TRACE will be a source of price information 
for certain fixed income securities held by the Fund. Furthermore, as 
noted above, investors will have ready access to information regarding 
the Fund's holdings, the Intraday Indicative Value, the Disclosed 
Portfolio, and quotation and last sale information for the Shares. For 
the above reasons, Nasdaq believes the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed rule change will facilitate the listing and trading of an 
additional type of actively-managed exchange-traded fund that will 
enhance competition among market participants, to the benefit of 
investors and the marketplace.

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

    No written comments were either solicited or received.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2016-086 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2016-086. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site http://www.sec.gov/rules/sro.shtml. 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of Nasdaq. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only

[[Page 42777]]

information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2016-086 and should be submitted 
on or before July 21, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-15454 Filed 6-29-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Notices 42769

administrator to the Fund. Van Eck In the event (a) the Adviser becomes invest in exchange-traded commodity
Securities Corporation (‘‘Distributor’’) newly affiliated with a broker-dealer or futures contracts that are components of
will be the distributor of the Fund’s registers as a broker-dealer, or (b) any the Morningstar® Long/Flat Commodity
Shares. The Bank of New York Mellon new adviser or sub-adviser to the Fund IndexSM (‘‘Benchmark’’), an index
(‘‘Custodian’’) will act as the custodian is a registered broker-dealer or becomes composed of futures contracts on 20
of the Fund’s assets and provide transfer affiliated with a broker-dealer, it will heavily traded commodities across the
agency and fund accounting services to implement a fire wall with respect to its energy, agriculture, industrial metals,
the Fund. relevant personnel and/or such broker- precious metals, and livestock sectors.
Paragraph (g) of Rule 5735 provides dealer affiliate, if applicable, regarding The Adviser will employ a rules-based
that if the investment adviser to the access to information concerning the investment approach when selecting
investment company issuing Managed composition and/or changes to the Commodities Instruments based upon
Fund Shares is affiliated with a broker- portfolio and will be subject to momentum characteristics of the
dealer, such investment adviser shall procedures designed to prevent the use Commodities Instruments. Commodities
erect a ‘‘fire wall’’ between the and dissemination of material non- Instruments are assessed on a monthly
investment adviser and the broker- public information regarding such basis by comparing current prices to 12-
dealer with respect to access to portfolio. The Fund does not currently month moving averages. The Fund’s
information concerning the composition intend to use a sub-adviser. positions will be either long 10 or flat.11
and/or changes to such investment The Fund intends to take long positions
company portfolio.7 In addition, VanEck Vectors Long/Flat Commodity
in those Commodities Instruments
paragraph (g) further requires that ETF
whose prices are above their 12-month
personnel who make decisions on the The Fund’s investment objective will moving average. Conversely, the Fund
open-end fund’s portfolio composition be to seek long-term capital appreciation intends to take flat positions to manage
must be subject to procedures designed while seeking to manage volatility and volatility and reduce downside risk for
to prevent the use and dissemination of reduce downside risk during sustained those Commodities Instruments whose
material, non-public information market declines. prices are below their 12-month moving
regarding the open-end fund’s portfolio. Principal Investment Strategies average. The Fund will not be an ‘‘index
Rule 5735(g) is similar to Nasdaq Rule tracking’’ ETF and may not always
5705(b)(5)(A)(i); however, paragraph (g) The Fund will be an actively managed invest in all of the Benchmark’s
operates in connection with the ETF that seeks to achieve its investment components, or in the same proportion,
establishment of a ‘‘fire wall’’ between objective by investing, under normal and it may invest in Commodities
the investment adviser and the broker- circumstances, in exchange-traded Instruments outside the Benchmark.
dealer reflects the applicable open-end commodity futures contracts and, under The Subsidiary will be an exempted
fund’s portfolio, not an underlying certain limited circumstances, other company operating under Cayman
benchmark index, as is the case with commodity-linked instruments (‘‘Other Islands law. It will be wholly-owned
index-based funds. Commodity Instruments’’ 8 and, and controlled by the Fund and will be
The Adviser is not a broker-dealer, collectively with exchange-traded advised by the Adviser. The Fund’s
although it is affiliated with the commodity futures contracts, investment in the Subsidiary may not
Distributor, a broker-dealer. The Adviser ‘‘Commodities Instruments’’). exceed 25% of the value of the Fund’s
has implemented a fire wall with The Fund will invest in Commodities total assets at each quarter-end of the
respect to its broker-dealer affiliate Instruments primarily through a wholly- Fund’s fiscal year. The Fund’s
regarding access to information owned subsidiary of the Fund organized investment in the Subsidiary is
concerning the composition and/or under the laws of the Cayman Islands expected to provide the Fund with
changes to the Fund’s (including the (‘‘Subsidiary’’). The Subsidiary will be exposure to Commodities Instruments
Subsidiary’s) portfolio. advised by the Adviser. within the limits of the federal tax laws,
With respect to the exchange-traded which limit the ability of investment
7 An investment adviser to an open-end fund is commodity futures contracts and companies like the Fund to invest
required to be registered under the Investment options on futures contracts (if
Advisers Act of 1940 (the ‘‘Advisers Act’’). As a
directly in such instruments. The
result, the Adviser and its related personnel are
applicable) held, not more than 10% of Subsidiary will have the same
subject to the provisions of Rule 204A–1 under the the weight 9 of such futures contracts investment objective as the Fund and
Advisers Act relating to codes of ethics. This Rule and options on futures contracts in the will follow the same general investment
requires investment advisers to adopt a code of aggregate shall consist of instruments
ethics that reflects the fiduciary nature of the
policies and restrictions, except that
relationship to clients as well as compliance with
whose principal trading market is not a unlike the Fund, it may invest without
other applicable securities laws. Accordingly, member of the Intermarket Surveillance limit in Commodities Instruments.
procedures designed to prevent the communication Group (‘‘ISG’’) or is a market with which The Fund (and the Subsidiary, as
and misuse of non-public information by an the Exchange does not have a applicable) expects to invest its
investment adviser must be consistent with Rule
204A–1 under the Advisers Act. In addition, Rule comprehensive surveillance sharing remaining assets in any one or more of
206(4)–7 under the Advisers Act makes it unlawful agreement. the following: U.S. government
for an investment adviser to provide investment The Fund (directly or indirectly securities,12 money market funds, cash
advice to clients unless such investment adviser has through the Subsidiary) will normally
(i) adopted and implemented written policies and 10 A ‘‘long’’ position is a position that will
procedures reasonably designed to prevent
violation, by the investment adviser and its
8 Other Commodity Instruments will include increase in market price if the price of the
supervised persons, of the Advisers Act and the commodity-based swap agreements cleared through commodity futures contract is rising during the
mstockstill on DSK3G9T082PROD with NOTICES

Commission rules adopted thereunder; (ii) a central clearing house or the clearing house’s period when the position is open.
implemented, at a minimum, an annual review affiliate (‘‘Cleared Swaps’’), forward contracts on 11 A ‘‘flat’’ position is a position that will not

regarding the adequacy of the policies and commodities, exchange-traded options on futures increase or decrease in market price whether the
procedures established pursuant to subparagraph (i) contracts, and commodity-based swaps other than price of the commodity futures contract to which
above and the effectiveness of their Cleared Swaps. it relates is rising or falling.
implementation; and (iii) designated an individual 9 To be calculated as the value of the contract 12 Such securities will include securities that are

(who is a supervised person) responsible for divided by the total absolute notional value of the issued or guaranteed by the U.S. Treasury, by
administering the policies and procedures adopted Fund’s futures contracts and options on futures various agencies of the U.S. government, or by
under subparagraph (i) above. contracts. Continued

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42770 Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Notices

and other cash equivalents,13 treasury The Fund also may invest directly in Subsidiary will typically consider
inflation-protected securities, sovereign ETFs, exchange-traded closed end funds investing in futures contracts of the
debt obligations of non-U.S. countries (to the extent permitted by the 1940 Act, Benchmark (‘‘Index Commodity
and repurchase agreements that provide and certain exemptive relief therefrom), Contracts’’) set forth in the following
liquidity, serve as margin or and exchange-traded notes (‘‘ETNs’’) table. The table also provides each
collateralize the Fund’s or the that provide exposure to commodities.14 instrument’s trading hours, exchange
Subsidiary’s investments in exchange- As previously noted, the Subsidiary (‘‘Futures Exchange’’) and ticker
traded commodity futures contracts. will be advised by the Adviser.15 The symbol. The table is subject to change.

Contract Exchange
ticker Exchange name 17 Trading hours
code Commodity contract
(Bloomberg (ET)
(Bloomberg) 16
generic)

BO1 ................ CBT ................ Chicago Board of Trade ................................. Soybean Oil/Crude ......................................... 20:00–14:20
C 1 ................. CBT ................ Chicago Board of Trade ................................. Corn/No. 2 Yellow .......................................... 20:00–14:20
CO1 ................ ICE ................. ICE Futures Europe Commodities ................. Crude Oil Brent/Global Spot .......................... 20:00–18:00
CL1 ................ NYM ............... New York Mercantile Exchange ..................... Crude Oil WTI/Global Spot ............................ 18:00–17:15
CT1 ................ NYB ............... ICE Futures US Softs .................................... Cotton/11⁄16″ ................................................... 21:00–14:20
GC1 ................ CMX ............... Commodity Exchange, Inc ............................. Gold ................................................................ 18:00–17:15
HG1 ................ CMX ............... Commodity Exchange, Inc ............................. Copper High Grade/Scrap No. 2 Wire ........... 18:00–17:15
HO1 ................ NYM ............... New York Mercantile Exchange ..................... Heating Oil #2/Fuel Oil ................................... 18:00–17:15
KC1 ................ NYB ............... ICE Futures US Softs .................................... Coffee ‘C’/Colombian ..................................... 04:15–13:30
LC1 ................ CME ............... Chicago Mercantile Exchange ....................... Cattle Live/Choice Average ........................... 09:00–17:00
QS1 ................ ICE ................. ICE Futures Europe Commodities ................. Gas-Oil-Petroleum .......................................... 20:00–18:00
LH1 ................ CME ............... Chicago Mercantile Exchange ....................... Hogs Lean/Average Iowa/S Minn .................. 09:00–17:00
NG1 ................ NYM ............... New York Mercantile Exchange ..................... Natural Gas Henry Hub ................................. 18:00–17:15
XB1 ................ NYM ............... New York Mercantile Exchange ..................... Gasoline Blendstock ...................................... 18:00–17:15
S 1 ................. CBT ................ Chicago Board of Trade ................................. Soybeans/No. 2 Yellow .................................. 20:00–14:20
SB1 ................ NYB ............... ICE Futures US Softs .................................... Sugar #11/World Raw .................................... 03:30–13:00
SI1 .................. CMX ............... Commodity Exchange, Inc ............................. Silver .............................................................. 18:00–17:15
SM1 ................ CBT ................ Chicago Board of Trade ................................. Soybean Meal/48% Protein ........................... 20:00–14:20
W 1 ................ CBT ................ Chicago Board of Trade ................................. Wheat/No. 2 Soft Red .................................... 20:00–14:20
CC1 ................ NYB ............... ICE Futures US Softs .................................... Cocoa/Ivory Coast .......................................... 04:45–13:30

As U.S. and London exchanges list Other Investments contract during the last 30 minutes of its
additional contracts, as currently listed regular trading session, the Fund’s
contracts on those exchanges gain The Fund currently intends to invest intention is to invest first in Cleared
first in exchange-traded commodity
sufficient liquidity or as other Swaps to the extent permitted under the
futures contracts. Thereafter, if the Fund
exchanges list sufficiently liquid position limits applicable to Cleared
reaches the position limits applicable to
contracts, the Adviser may include Swaps and appropriate in light of the
one or more Index Commodity Contracts
those contracts in the list of possible or a Futures Exchange imposes liquidity in the Cleared Swaps market,
investments of the Subsidiary. The list limitations on the Fund’s ability to and then, using its commercially
of commodities futures and maintain or increase its positions in an reasonable judgment, in Other
commodities markets considered for exchange-traded commodity futures Commodity Instruments.
investment may change over time. contract after reaching accountability
levels or a price limit is in effect on an
exchange-traded commodity futures

various instrumentalities, which have been includes all U.S. national securities exchanges, or investor protections, except as noted in the
established or sponsored by the U.S. government. exchanges that are parties to a comprehensive Registration Statement. However, the Subsidiary
U.S. Treasury obligations are backed by the ‘‘full surveillance sharing agreement with the Exchange. will be wholly-owned and controlled by the Fund
faith and credit’’ of the U.S. government. Securities An ETN is a senior, unsecured, unsubordinated and will be advised by the Adviser. The Trust’s
issued or guaranteed by federal agencies and U.S. debt security issued by an underwriting bank that, board (‘‘Board’’) will have oversight responsibility
government-sponsored instrumentalities may or similar to other debt securities, has a maturity date
for the investment activities of the Fund, including
may not be backed by the full faith and credit of and is backed only by the credit of the issuer. ETNs
the U.S. government. in which the Fund invests will be listed and traded its investment in the Subsidiary, and the Fund’s
13 Cash equivalents will include banker’s in the U.S. on registered exchanges. The ETNs in role as the sole shareholder of the Subsidiary. The
acceptances, commercial paper, and certificates of which the Fund will invest include Securities Adviser will receive certain fees for managing the
deposit. Linked to the Performance of Indexes and Subsidiary’s assets and the Adviser will waive or
14 An ETF is an investment company registered Commodities, Including Currencies (as described in credit such amounts against the fees payable to the
under the 1940 Act that holds a portfolio of Nasdaq Rule 5710), and Index-Linked Exchangeable Adviser by the Fund. It is expected that the
securities. Many ETFs are designed to track the Notes (as described in Nasdaq Rule 5711). The Subsidiary will become party to the existing
performance of a securities index, including Fund will not hold inverse, leveraged, and inverse custody agreement, transfer agency agreement and
industry, sector, country and region indexes. ETFs leveraged ETFs or ETNs. Leveraged instruments are accounting agreement of the Trust and Fund.
mstockstill on DSK3G9T082PROD with NOTICES

in which the Fund invests will be listed and traded operated in a manner designed to seek a multiple 16 The exchange codes listed are Bloomberg
in the U.S. on registered exchanges. The ETFs in of the performance of an underlying reference
shorthand codes for the corresponding exchanges.
which the Fund will invest include Index Fund index, and inverse instruments are designed to seek
investment results that correspond to the inverse The New York Board of Trade is currently owned
Shares (as described in Nasdaq Rule 5705), Portfolio
Depositary Receipts (as described in Nasdaq Rule (opposite) of the performance of a specified by the ICE Futures Exchange; Bloomberg continues
5705), and Managed Fund Shares (as described in domestic equity, international or global equity, or to use NYB as its shorthand code for certain
Nasdaq Rule 5735). The shares of ETFs in which the fixed income index or a combination thereof. contracts formerly traded on the New York Board
Fund may invest will be limited to securities that 15 The Subsidiary will not be registered under the of Trade.
trade in markets that are members of the ISG, which 1940 Act and will not be directly subject to its 17 All of the exchanges are ISG members.

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Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Notices 42777

information that you wish to make Paper Statements (‘‘Act’’),1 and Rule 19b–4 thereunder,2
available publicly. All submissions notice is hereby given that on June 17,
• Send paper statements to Brent J.
should refer to File Number SR– 2016, The Options Clearing Corporation
Fields, Federal Advisory Committee
NASDAQ–2016–086 and should be (‘‘OCC’’) filed with the Securities and
Management Officer, Securities and
submitted on or before July 21, 2016. Exchange Commission (‘‘Commission’’)
Exchange Commission, 100 F Street NE.,
For the Commission, by the Division of the proposed rule change as described
Washington, DC 20549–1090.
Trading and Markets, pursuant to delegated in Items I, II and III below, which Items
authority.32 All submissions should refer to File No. have been prepared by OCC. OCC filed
Brent J. Fields, 265–27. This file number should be the proposed rule change pursuant to
Secretary.
included on the subject line if email is Section 19(b)(3)(A)(iii) of the Act 3 and
used. To help us process and review Rule 19b–4(f)(4)(ii) thereunder 4 so that
[FR Doc. 2016–15454 Filed 6–29–16; 8:45 am]
your statement more efficiently, please the proposal was effective upon filing
BILLING CODE 8011–01–P
use only one method. The Commission with the Commission. The Commission
will post all statements on the Advisory is publishing this notice to solicit
Committee’s Web site (http:// comments on the proposed rule change
SECURITIES AND EXCHANGE
www.sec.gov/spotlight/acsec- from interested persons.
COMMISSION
spotlight.shtml).
I. Clearing Agency’s Statement of the
Statements also will be available for
[Release Nos. 33–10105; 34–78158; File No. Terms of Substance of the Proposed
Web site viewing and printing in the
265–27] Rule Change
Commission’s Public Reference Room,
SEC Advisory Committee on Small and 100 F Street NE., Washington, DC The proposed rule change by OCC
Emerging Companies 20549, on official business days would amend OCC Rule 604 to permit
between the hours of 10:00 a.m. and pass-through letters of credit (‘‘Pass-
AGENCY: Securities and Exchange 3:00 p.m. All statements received will Through Letters of Credit’’) as a form of
Commission. be posted without change; we do not margin asset to satisfy margin
ACTION: Notice of meeting. edit personal identifying information obligations for futures, futures options,
from submissions. You should submit and commodity options positions
SUMMARY: The Securities and Exchange only information that you wish to make (collectively referred to as ‘‘futures
Commission Advisory Committee on available publicly. positions’’) held in segregated futures
Small and Emerging Companies is accounts and segregated futures
FOR FURTHER INFORMATION CONTACT: Julie
providing notice that it will hold a professional accounts (collectively
public meeting on Tuesday, July 19, Z. Davis, Senior Special Counsel, at
referred to as ‘‘segregated futures
2016, in Multi-Purpose Room LL–006 at (202) 551–3460, Office of Small
accounts’’) that are not eligible to hold
the Commission’s headquarters, 100 F Business Policy, Division of Corporation
positions in security futures.5
Street NE., Washington, DC. The Finance, Securities and Exchange
Capitalized terms not defined herein
meeting will begin at 9:30 a.m. (EDT) Commission, 100 F Street NE.,
have the same meaning as set forth in
and will be open to the public. The Washington, DC 20549–3628.
the OCC By-Laws and Rules.
meeting will be webcast on the SUPPLEMENTARY INFORMATION: In
Commission’s Web site at www.sec.gov. accordance with Section 10(a) of the II. Clearing Agency’s Statement of the
Persons needing special Federal Advisory Committee Act, 5 Purpose of, and Statutory Basis for, the
accommodations to take part because of U.S.C.-App. 1, and the regulations Proposed Rule Change
a disability should notify the contact thereunder, Keith Higgins, Designated In its filing with the Commission,
person listed below. The public is Federal Officer of the Committee, has OCC included statements concerning
invited to submit written statements to ordered publication of this notice. the purpose of and basis for the
the Committee. The agenda for the Dated: June 27, 2016. proposed rule change and discussed any
meeting includes matters relating to Brent J. Fields,
comments it received on the proposed
rules and regulations affecting small and rule change. The text of these statements
Committee Management Officer.
emerging companies under the federal may be examined at the places specified
[FR Doc. 2016–15509 Filed 6–29–16; 8:45 am]
securities laws. in Item IV below. OCC has prepared
BILLING CODE 8011–01–P summaries, set forth in sections (A), (B),
DATES: The public meeting will be held
on Tuesday, July 19, 2016. Written and (C) below, of the most significant
statements should be received on or aspects of these statements.
SECURITIES AND EXCHANGE
before July 15, 2016. COMMISSION (A) Clearing Agency’s Statement of the
ADDRESSES: The meeting will be held at Purpose of, and Statutory Basis for, the
the Commission’s headquarters, 100 F [Release No. 34–78151; File No. SR–OCC– Proposed Rule Change
Street NE., Washington, DC. Written 2016–003] (1) Purpose
statements may be submitted by any of
the following methods: Self-Regulatory Organizations; The The purpose of the proposed rule
Options Clearing Corporation; Notice change is to amend OCC Rule 604 to
Electronic Statements permit Pass-Through Letters of Credit as
of Filing and Immediate Effectiveness
• Use the Commission’s Internet of Proposed Rule Change Related to a form of margin asset to satisfy margin
mstockstill on DSK3G9T082PROD with NOTICES

submission form (http://www.sec.gov/ the Acceptance of Pass-Through
info/smallbus/acsec.shtml); or Letters of Credit as a Form of Margin 1 15 U.S.C. 78s(b)(1).
• Send an email message to rule- Asset
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
comments@sec.gov. Please include File 4 17 CFR 240.19b–4(f)(4)(ii).
Number 265–27 on the subject line; or June 24, 2016.
5 See OCC By-Laws Article I, Section 1.S.(5) and
Pursuant to Section 19(b)(1) of the (6) defining segregated futures accounts and
32 17 CFR 200.30–3(a)(12). Securities Exchange Act of 1934 segregated futures professional accounts.

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Document Created: 2018-02-08 07:45:07
Document Modified: 2018-02-08 07:45:07
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 42768