81 FR 57981 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To List and Trade Shares of the AdvisorShares KIM Korea Equity ETF
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 164 (August 24, 2016)
Federal Register Volume 81, Issue 164 (August 24, 2016)
| Page Range | 57981-57983 | |
| FR Document | 2016-20208 |
[Federal Register Volume 81, Number 164 (Wednesday, August 24, 2016)] [Notices] [Pages 57981-57983] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-20208] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78614; File No. SR-NYSEArca-2016-64] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To List and Trade Shares of the AdvisorShares KIM Korea Equity ETF August 18, 2016. On May 2, 2016, NYSE Arca, Inc. (``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to list and trade shares (``Shares'') of the AdvisorShares KIM Korea Equity ETF (``Fund'') under NYSE Arca Equities Rule 8.600. On May 13, 2016, the Exchange submitted Amendment No. 1 to the proposed rule change.\3\ The Commission published notice of the proposed rule change, as modified by Amendment No. 1, in the Federal Register on May 23, 2016.\4\ On May 23, 2016, the Exchange submitted Amendment No. 2 to the proposed rule change.\5\ On July 7, 2016, pursuant to Section 19(b)(2) of the Act,\6\ the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.\7\ The Commission received no comments on the proposed rule change. This order institutes proceedings under Section 19(b)(2)(B) of the Act \8\ to determine whether to approve or disapprove the proposed rule change, as modified by Amendment Nos. 1 and 2. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Amendment No. 1 replaced and superseded the original filing in its entirety. Amendment No. 1 is available at https://www.sec.gov/comments/sr-nysearca-2016-64/nysearca201664-1.pdf. \4\ See Securities Exchange Act Release No. 34-77847 (May 17, 2016), 81 FR 32364 (NYSEArca-2016-64) (``Notice''). \5\ In Amendment No. 2, which replaced and superseded the original filing in its entirety, the Exchange clarified certain statements relating to the Fund's investments in Depositary Receipts and certain representations by the Exchange relating to surveillance. Amendment No. 2 is available at https://www.sec.gov/comments/sr-nysearca-2016-64/nysearca201664-2.pdf. Because Amendment No. 2 does not materially alter the substance of the proposed rule change or raise unique or novel regulatory issues, Amendment No. 2 is not subject to notice and comment. \6\ 15 U.S.C. 78s(b)(2). \7\ See Securities Exchange Act Release No. 78240, 81 FR 45332 (July 13, 2016). The Commission designated August 21, 2016, as the date by which the Commission would either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. \8\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- I. The Exchange's Description of the Proposal \9\ --------------------------------------------------------------------------- \9\ Additional information regarding the Fund, the Shares, and the Trust (as defined herein), including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings, disclosure policies, calculation of net asset value, distributions, and taxes, among other things, can be found in the Notice and the Registration Statement, as applicable. See Notice, supra note 4, and Registration Statement, infra note 10. --------------------------------------------------------------------------- The Exchange proposes to list and trade the Shares under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange. The Shares will be offered by AdvisorShares Trust (``Trust''), an open-end management investment company.\10\ The investment adviser to the Fund will be AdvisorShares Investments LLC (``Adviser'') and Korea Investment Management Co., Ltd. will be the Fund's sub-adviser (``Sub-Adviser''). Foreside Fund Services, LLC will be the principal underwriter and distributor of the Fund's Shares, and the Bank of New York Mellon will serve as the administrator, custodian, and transfer agent for the Fund. --------------------------------------------------------------------------- \10\ The Exchange states that the Trust is registered under the Investment Company Act of 1940 (``1940 Act'') and that on March 25, 2016, the Trust filed with the Commission amendments to its registration statement on Form N-1A under the Securities Act of 1933 (``Securities Act'') and under the 1940 Act relating to the Fund (File Nos. 333-157876 and 811-22110) (``Registration Statement''). In addition, the Exchange states that the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 29291(May 28, 2010) (File No. 812-13677). --------------------------------------------------------------------------- The Fund's Principal Investments The Exchange states that the investment objective of the Fund will be to seek to provide long-term capital appreciation above the capital appreciation of its primary benchmark, the MSCI Korea Index, and other Korea-focused indexes. The Fund will seek to achieve its investment objective by investing primarily in growth-oriented stocks of any capitalization range listed on the Korea Exchange. Under normal circumstances,\11\ the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities listed on the Korea Exchange.\12\ --------------------------------------------------------------------------- \11\ The Exchange states that the term ``under normal circumstances'' means, without limitation, the absence of extreme volatility or trading halts in the equity markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or man-made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. \12\ The Korea Exchange is a member of the Intermarket Surveillance Group (``ISG''). --------------------------------------------------------------------------- The Exchange states that the Sub-Adviser will manage the Fund's portfolio by buying and holding stocks of companies at attractive valuation that it believes have growth potential. The Sub-Adviser will focus on corporate fundamental research in its stock selection, often called ``bottom up'' analysis. The Sub-Adviser will invest the Fund's assets with a mid- to- long-term view, typically seeking to avoid short-term trading. In selecting investments for the Fund's portfolio, the Sub-Adviser will place emphasis on fundamentals rather than on short-term momentum and continuously monitor market risks. In deciding whether to sell [[Page 57982]] investments in the Fund's portfolio, the Sub-Adviser will consider the following factors: A company's stock price reaches its target price; a company in the portfolio experiences negative fundamental changes; errors are found in the previous assumptions or forecasts of a company; and more profitable alternatives are found. In addition to individual stock selection, the Exchange states that the Sub-Adviser will engage in sector allocation based on analysis of the macro economy and its effect on corporate competitiveness and industry cycles. This is often called ``top down'' analysis. The Sub- Adviser will strive to invest with large economic cycles as compared to short-term market trends and short-term supply and demand. The Fund's Non-Principal Investments The Exchange represents that while the Fund, under normal circumstances, will invest at least 80% of its assets in the securities described above in the ``Principal Investments of the Fund,'' the Fund may invest its remaining assets in the securities and financial instruments as described below. The Fund may invest in the following equity securities traded on a U.S. or foreign exchange or over-the-counter, including equity securities of foreign issuers in emerging countries: Common stocks, preferred stocks, warrants, rights, securities convertible into common stock, and investments in master limited partnerships. The Fund may invest in issuers located outside the United States directly and may invest in exchange-traded funds (``ETFs''),\13\ exchange-traded notes (``ETNs''),\14\ and exchange-traded products (``ETPs'') \15\ that are indirectly linked to the performance of foreign issuers. The Fund may invest in ``Depositary Receipts,'' consisting of American Depositary Receipts (``ADRs''), Global Depositary Receipts, European Depositary Receipts, International Depositary Receipts, ``ordinary shares,'' and ``New York shares'' issued and traded in the U.S.\16\ --------------------------------------------------------------------------- \13\ For purposes of the proposed rule change, ETFs are Investment Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio Depositary Receipts (as described in NYSE Arca Equities Rule 8.100); and Managed Fund Shares (as described in NYSE Arca Equities Rule 8.600). The ETFs that the Fund invests in all will be listed and traded in the U.S. on registered exchanges. The Fund will invest in the securities of ETFs registered under the 1940 Act consistent with the requirements of Section 12(d)(1) of the 1940 Act, or any rule, regulation or order of the Commission or interpretation thereof. The Fund will only make ETF investments in conformity with the requirements of Regulation M of the Internal Revenue Code of 1986, as amended. While the Fund may invest in inverse ETFs, the Fund will not invest in leveraged or inverse leveraged ETFs (e.g., 2X or 3X). \14\ For purposes of the proposed rule change, ETNs include Index-Linked Securities (as described in NYSE Arca Equities Rule5.2(j)(6)). While the Fund may invest in inverse ETNs, the Fund will not invest in leveraged or inverse leveraged ETNs (e.g., 2X or 3X). \15\ For purposes of the proposed rule change, ETPs include Trust Issued Receipts (as described in NYSE Arca Equities Rule 8.200) and Currency Trust Shares (as described in NYSE Arca Equities Rule 8.202). While the Fund may invest in inverse ETPs, the Fund will not invest in leveraged or inverse leveraged ETPs (e.g., 2X or 3X). \16\ The Exchange represents that not more than 10% of the Fund's assets will be invested in non-exchange-traded ADRs. In addition, the Exchange represents that other Depositary Receipts in which the Fund invests will be exchange-traded. --------------------------------------------------------------------------- The Fund may invest in non-exchange-traded investment company securities to the extent that such investments would be consistent with the requirements of Section 12(d)(1) of the 1940 Act or any rule, regulation, or order of the Commission or interpretation thereof. Consistent with the restrictions discussed above, the Fund may invest in U.S. and non-U.S. exchange-listed closed-end funds and business development companies. Except with respect to inverse ETFs as described above,\17\ the Fund will not invest in inverse, leveraged, or inverse leveraged investment company securities. --------------------------------------------------------------------------- \17\ See note 13, supra. --------------------------------------------------------------------------- The Fund may invest in U.S. government securities and may invest in certain U.S. government securities that are issued or guaranteed by agencies or instrumentalities of the U.S. government.\18\ The Fund also may invest in non-exchange-traded convertible securities that are bonds, debentures, notes, or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio. Finally, the Fund may invest in shares of U.S. or non-U.S. exchange-traded real estate investment trusts and repurchase agreements and reverse repurchase agreements.\19\ --------------------------------------------------------------------------- \18\ According to the Exchange, securities issued or guaranteed by the U.S. government or its agencies or instrumentalities include the following: U.S. Treasury securities, which are backed by the full faith and credit of the U.S. Treasury and which differ only in their interest rates, maturities, and times of issuance; U.S. Treasury bills, which have initial maturities of one year or less; U.S. Treasury notes, which have initial maturities of one to ten years; U.S. Treasury bonds, which generally have initial maturities of greater than ten years; and U.S. Treasury zero-coupon bonds. \19\ The Fund may purchase securities on a when-issued, delayed- delivery or forward commitment basis (i.e., delivery and payment can take place between a month and 120 days after the date of the transaction). --------------------------------------------------------------------------- The Fund's Investment Restrictions The Exchange represents that the Fund may hold up to an aggregate amount of 15% of its net assets in assets deemed illiquid by the Adviser.\20\ 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.\21\ --------------------------------------------------------------------------- \20\ The Exchange states that, under the supervision of the Fund's Board of Trustees, the Adviser determines the liquidity of the Fund's investments. In determining the liquidity of the Fund's investments, the Adviser may consider various factors, including (1) the frequency and volume of trades and quotations; (2) the number of dealers and prospective purchasers in the marketplace; (3) dealer undertakings to make a market; and (4) the nature of the security and the market in which it trades (including any demand, put or tender features, the mechanics and other requirements for transfer, any letters of credit or other credit enhancement features, any ratings, the number of holders, the method of soliciting offers, the time required to dispose of the security, and the ability to assign or offset the rights and obligations of the security). \21\ 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. --------------------------------------------------------------------------- The Exchange also represents that the Fund will not invest in options, futures, swaps, or forward contracts. Further, the Fund's investments will be consistent with its investment objective and will not be used to provide multiple returns of a benchmark or to produce leveraged returns. Finally, the Exchange represents that not more than 10% of the net assets of the Fund in the aggregate invested in equity securities (other than non-exchange-traded investment company securities) shall consist of equity securities whose principal market is not a member of the ISG or is a market with which the Exchange does not have a comprehensive surveillance sharing agreement. II. Proceedings To Determine Whether To Approve or Disapprove SR- NYSEArca-2016-64 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act \22\ to determine whether the proposed rule change, as modified by Amendment Nos. 1 and 2, should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the [[Page 57983]] legal and policy issues raised by the proposed rule change, as modified by Amendment Nos. 1 and 2. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change, as modified by Amendment Nos. 1 and 2. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Act,\23\ the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for the submission of additional analysis regarding the proposed rule change's consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ``designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,'' and ``to protect investors and the public interest.'' \24\ --------------------------------------------------------------------------- \23\ Id. \24\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange provides that the Fund will invest at least 80% of its net assets in equity securities listed on the Korea Exchange. The Exchange, however, proposes no other quantitative standards with respect to the types of equity securities listed on the Korea Exchange in which the Fund, at the Sub-Adviser's discretion, may invest. The Commission has recently noted that appropriate quantitative standards, such as minimum market value and trading volume requirements, ``should reduce the extent to which Managed Fund Shares holding Non-U.S. Component Stocks may be susceptible to manipulation.'' \25\ Accordingly, the Commission seeks comment on whether the Exchange's representations relating to the Korean equity securities held by the Fund are sufficient to prevent the susceptibility of the Fund's portfolio to manipulation and are thereby consistent with the requirements of Section 6(b)(5) of the Act, which, among other things, requires that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest. --------------------------------------------------------------------------- \25\ See Securities Exchange Act Release No. 78397 (July 22, 2016), 81 FR 49320, at 49325 (July 27, 2016). The term ``Non-U.S. Component Stocks'' is defined in NYSE Arca Equities Rule 5.2(j)(3) as an equity security that is not registered under Sections 12(b) or 12(g) of the Act and that is issued by an entity that (a) is not organized, domiciled, or incorporated in the United States, and (b) is an operating company (including Real Estate Investment Trusts and income trusts, but excluding investment trusts, unit trusts, mutual funds, and derivatives). See NYSE Arca Equities Rule 5.2(j)(3). --------------------------------------------------------------------------- III. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\26\ --------------------------------------------------------------------------- \26\ Section 19(b)(2) of the Act, as amended by the Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by September 14, 2016. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by September 28, 2016. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice \27\ and in Amendment No. 2 to the proposed rule change,\28\ in addition to any other comments they may wish to submit about the proposed rule change, as modified by Amendment Nos. 1 and 2. --------------------------------------------------------------------------- \27\ Supra note 4. \28\ Supra note 5. --------------------------------------------------------------------------- Comments may be submitted by any of the following methods: Electronic CommentsUse 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-NYSEArca-2016-64 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 Numbers SR-NYSEArca-2016-64. 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 these filings also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2016-64 and should be submitted on or before September 14, 2016. Rebuttal comments should be submitted by September 28, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\29\ --------------------------------------------------------------------------- \29\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-20208 Filed 8-23-16; 8:45 am] BILLING CODE 8011-01-P
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comments more efficiently, please use list and trade shares (‘‘Shares’’) of the investment company.10 The investment
only one method. The Commission will AdvisorShares KIM Korea Equity ETF adviser to the Fund will be
post all comments on the Commission’s (‘‘Fund’’) under NYSE Arca Equities AdvisorShares Investments LLC
Internet Web site (http://www.sec.gov/ Rule 8.600. On May 13, 2016, the (‘‘Adviser’’) and Korea Investment
rules/sro.shtml). Copies of the Exchange submitted Amendment No. 1 Management Co., Ltd. will be the Fund’s
submission, all subsequent to the proposed rule change.3 The sub-adviser (‘‘Sub-Adviser’’). Foreside
amendments, all written statements Commission published notice of the Fund Services, LLC will be the principal
with respect to the proposed rule proposed rule change, as modified by underwriter and distributor of the
change that are filed with the Amendment No. 1, in the Federal Fund’s Shares, and the Bank of New
Commission, and all written Register on May 23, 2016.4 On May 23, York Mellon will serve as the
communications relating to the 2016, the Exchange submitted administrator, custodian, and transfer
proposed rule change between the Amendment No. 2 to the proposed rule agent for the Fund.
Commission and any person, other than change.5 On July 7, 2016, pursuant to
those that may be withheld from the The Fund’s Principal Investments
Section 19(b)(2) of the Act,6 the
public in accordance with the Commission designated a longer period The Exchange states that the
provisions of 5 U.S.C. 552, will be within which to approve the proposed investment objective of the Fund will be
available for Web site viewing and rule change, disapprove the proposed to seek to provide long-term capital
printing in the Commission’s Public rule change, or institute proceedings to appreciation above the capital
Reference Room, 100 F Street NE., determine whether to disapprove the appreciation of its primary benchmark,
Washington, DC 20549 on official proposed rule change.7 The Commission the MSCI Korea Index, and other Korea-
business days between the hours of received no comments on the proposed focused indexes. The Fund will seek to
10:00 a.m. and 3:00 p.m. Copies of such rule change. This order institutes achieve its investment objective by
filing also will be available for proceedings under Section 19(b)(2)(B) of investing primarily in growth-oriented
inspection and copying at the principal the Act 8 to determine whether to stocks of any capitalization range listed
office of the Exchange. All comments approve or disapprove the proposed on the Korea Exchange. Under normal
received will be posted without change; rule change, as modified by Amendment circumstances,11 the Fund will invest at
the Commission does not edit personal least 80% of its net assets (plus any
Nos. 1 and 2.
identifying information from borrowings for investment purposes) in
submissions. You should submit only I. The Exchange’s Description of the equity securities listed on the Korea
information that you wish to make Proposal 9 Exchange.12
available publicly. All submissions The Exchange states that the Sub-
should refer to File Number SR–BOX– The Exchange proposes to list and Adviser will manage the Fund’s
2016–41, and should be submitted on or trade the Shares under NYSE Arca portfolio by buying and holding stocks
before September 14, 2016. Equities Rule 8.600, which governs the of companies at attractive valuation that
listing and trading of Managed Fund it believes have growth potential. The
For the Commission, by the Division of
Trading and Markets, pursuant to delegated Shares on the Exchange. The Shares will Sub-Adviser will focus on corporate
authority.19 be offered by AdvisorShares Trust fundamental research in its stock
Robert W. Errett, (‘‘Trust’’), an open-end management selection, often called ‘‘bottom up’’
Deputy Secretary. analysis. The Sub-Adviser will invest
3 Amendment No. 1 replaced and superseded the
[FR Doc. 2016–20212 Filed 8–23–16; 8:45 am] the Fund’s assets with a mid- to- long-
original filing in its entirety. Amendment No. 1 is
BILLING CODE 8011–01–P available at https://www.sec.gov/comments/sr- term view, typically seeking to avoid
nysearca-2016-64/nysearca201664-1.pdf. short-term trading. In selecting
4 See Securities Exchange Act Release No. 34– investments for the Fund’s portfolio, the
SECURITIES AND EXCHANGE 77847 (May 17, 2016), 81 FR 32364 (NYSEArca– Sub-Adviser will place emphasis on
2016–64) (‘‘Notice’’).
COMMISSION 5 In Amendment No. 2, which replaced and
fundamentals rather than on short-term
[Release No. 34–78614; File No. SR– superseded the original filing in its entirety, the momentum and continuously monitor
NYSEArca–2016–64] Exchange clarified certain statements relating to the market risks. In deciding whether to sell
Fund’s investments in Depositary Receipts and
certain representations by the Exchange relating to 10 The Exchange states that the Trust is registered
Self-Regulatory Organizations; NYSE surveillance. Amendment No. 2 is available at
Arca, Inc.; Order Instituting under the Investment Company Act of 1940 (‘‘1940
https://www.sec.gov/comments/sr-nysearca-2016- Act’’) and that on March 25, 2016, the Trust filed
Proceedings To Determine Whether To 64/nysearca201664-2.pdf. Because Amendment No. with the Commission amendments to its
Approve or Disapprove Proposed Rule 2 does not materially alter the substance of the registration statement on Form N–1A under the
Change, as Modified by Amendment proposed rule change or raise unique or novel Securities Act of 1933 (‘‘Securities Act’’) and under
regulatory issues, Amendment No. 2 is not subject the 1940 Act relating to the Fund (File Nos. 333–
Nos. 1 and 2, To List and Trade Shares to notice and comment. 157876 and 811–22110) (‘‘Registration Statement’’).
of the AdvisorShares KIM Korea Equity 6 15 U.S.C. 78s(b)(2).
In addition, the Exchange states that the
ETF 7 See Securities Exchange Act Release No. 78240, Commission has issued an order granting certain
81 FR 45332 (July 13, 2016). The Commission exemptive relief to the Trust under the 1940 Act.
August 18, 2016. designated August 21, 2016, as the date by which See Investment Company Act Release No.
On May 2, 2016, NYSE Arca, Inc. the Commission would either approve or 29291(May 28, 2010) (File No. 812–13677).
(‘‘Exchange’’) filed with the Securities disapprove, or institute proceedings to determine 11 The Exchange states that the term ‘‘under
whether to disapprove, the proposed rule change. normal circumstances’’ means, without limitation,
and Exchange Commission 8 15 U.S.C. 78s(b)(2)(B). the absence of extreme volatility or trading halts in
mstockstill on DSK3G9T082PROD with NOTICES
(‘‘Commission’’), pursuant to Section 9 Additional information regarding the Fund, the the equity markets or the financial markets
19(b)(1) of the Securities Exchange Act Shares, and the Trust (as defined herein), including generally; operational issues causing dissemination
of 1934 (‘‘Act’’) 1 and Rule 19b–4 investment strategies, risks, creation and of inaccurate market information; or force majeure
redemption procedures, fees, portfolio holdings, type events such as systems failure, natural or man-
thereunder,2 a proposed rule change to made disaster, act of God, armed conflict, act of
disclosure policies, calculation of net asset value,
distributions, and taxes, among other things, can be terrorism, riot or labor disruption or any similar
19 17 CFR 200.30–3(a)(12). found in the Notice and the Registration Statement, intervening circumstance.
1 15 U.S.C. 78s(b)(1). as applicable. See Notice, supra note 4, and 12 The Korea Exchange is a member of the
2 17 CFR 240.19b–4. Registration Statement, infra note 10. Intermarket Surveillance Group (‘‘ISG’’).
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legal and policy issues raised by the manipulative acts and practices and to Commission, 100 F Street NE.,
proposed rule change, as modified by protect investors and the public interest. Washington, DC 20549–1090.
Amendment Nos. 1 and 2. Institution of
III. Procedure: Request for Written All submissions should refer to File
proceedings does not indicate that the
Comments Numbers SR–NYSEArca–2016–64. This
Commission has reached any
conclusions with respect to any of the The Commission requests that file number should be included on the
issues involved. Rather, as described interested persons provide written subject line if email is used. To help the
below, the Commission seeks and submissions of their views, data, and Commission process and review your
encourages interested persons to arguments with respect to the issues comments more efficiently, please use
provide comments on the proposed rule identified above, as well as any other only one method. The Commission will
change, as modified by Amendment concerns they may have with the post all comments on the Commission’s
Nos. 1 and 2. proposal. In particular, the Commission Internet Web site (http://www.sec.gov/
Pursuant to Section 19(b)(2)(B) of the invites the written views of interested rules/sro.shtml). Copies of the
Act,23 the Commission is providing persons concerning whether the submission, all subsequent
notice of the grounds for disapproval proposal is consistent with Section amendments, all written statements
under consideration. The Commission is 6(b)(5) or any other provision of the Act, with respect to the proposed rule
instituting proceedings to allow for the or the rules and regulations thereunder. change that are filed with the
submission of additional analysis Although there do not appear to be any Commission, and all written
regarding the proposed rule change’s issues relevant to approval or communications relating to the
consistency with Section 6(b)(5) of the disapproval that would be facilitated by proposed rule change between the
Act, which requires, among other an oral presentation of views, data, and Commission and any person, other than
things, that the rules of a national arguments, the Commission will those that may be withheld from the
securities exchange be ‘‘designed to consider, pursuant to Rule 19b–4, any
public in accordance with the
prevent fraudulent and manipulative request for an opportunity to make an
provisions of 5 U.S.C. 552, will be
acts and practices, to promote just and oral presentation.26
Interested persons are invited to available for Web site viewing and
equitable principles of trade,’’ and ‘‘to printing in the Commission’s Public
protect investors and the public submit written data, views, and
arguments regarding whether the Reference Room, 100 F Street NE.,
interest.’’ 24 Washington, DC 20549, on official
proposal should be approved or
The Exchange provides that the Fund disapproved by September 14, 2016. business days between the hours of
will invest at least 80% of its net assets Any person who wishes to file a rebuttal 10:00 a.m. and 3:00 p.m. Copies of these
in equity securities listed on the Korea to any other person’s submission must filings also will be available for
Exchange. The Exchange, however, file that rebuttal by September 28, 2016. inspection and copying at the principal
proposes no other quantitative The Commission asks that commenters office of the Exchange. All comments
standards with respect to the types of address the sufficiency of the received will be posted without change;
equity securities listed on the Korea Exchange’s statements in support of the the Commission does not edit personal
Exchange in which the Fund, at the proposal, which are set forth in the identifying information from
Sub-Adviser’s discretion, may invest. Notice 27 and in Amendment No. 2 to submissions. You should submit only
The Commission has recently noted that the proposed rule change,28 in addition information that you wish to make
appropriate quantitative standards, such to any other comments they may wish available publicly. All submissions
as minimum market value and trading to submit about the proposed rule should refer to File Number SR–
volume requirements, ‘‘should reduce change, as modified by Amendment NYSEArca–2016–64 and should be
the extent to which Managed Fund Nos. 1 and 2.
Shares holding Non-U.S. Component submitted on or before September 14,
Comments may be submitted by any 2016. Rebuttal comments should be
Stocks may be susceptible to of the following methods:
manipulation.’’ 25 Accordingly, the submitted by September 28, 2016.
Commission seeks comment on whether Electronic Comments For the Commission, by the Division of
the Exchange’s representations relating • Use the Commission’s Internet Trading and Markets, pursuant to delegated
to the Korean equity securities held by comment form (http://www.sec.gov/ authority.29
the Fund are sufficient to prevent the rules/sro.shtml); or Robert W. Errett,
susceptibility of the Fund’s portfolio to • Send an email to rule-comments@ Deputy Secretary.
manipulation and are thereby consistent sec.gov. Please include File Number SR– [FR Doc. 2016–20208 Filed 8–23–16; 8:45 am]
with the requirements of Section 6(b)(5) NYSEArca–2016–64 on the subject line.
BILLING CODE 8011–01–P
of the Act, which, among other things,
requires that the rules of an exchange be Paper Comments
designed to prevent fraudulent and • Send paper comments in triplicate
to Secretary, Securities and Exchange
23 Id.
24 15 26 Section 19(b)(2) of the Act, as amended by the
U.S.C. 78f(b)(5).
25 See Securities Exchange Act Release No. 78397 Securities Act Amendments of 1975, Public Law
(July 22, 2016), 81 FR 49320, at 49325 (July 27, 94–29 (June 4, 1975), grants the Commission
2016). The term ‘‘Non-U.S. Component Stocks’’ is flexibility to determine what type of proceeding—
mstockstill on DSK3G9T082PROD with NOTICES
defined in NYSE Arca Equities Rule 5.2(j)(3) as an either oral or notice and opportunity for written
equity security that is not registered under Sections comments—is appropriate for consideration of a
12(b) or 12(g) of the Act and that is issued by an particular proposal by a self-regulatory
entity that (a) is not organized, domiciled, or organization. See Securities Act Amendments of
incorporated in the United States, and (b) is an 1975, Senate Comm. on Banking, Housing & Urban
operating company (including Real Estate Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30
Investment Trusts and income trusts, but excluding (1975).
27 Supra note 4.
investment trusts, unit trusts, mutual funds, and
derivatives). See NYSE Arca Equities Rule 5.2(j)(3). 28 Supra note 5. 29 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 20:16 Aug 23, 2016 Jkt 238001 PO 00000 Frm 00107 Fmt 4703 Sfmt 9990 E:\FR\FM\24AUN1.SGM 24AUN1](https://thefederalregister.org/doc/81_FR_58145/page/3.svg)
Document Created: 2016-08-24 03:03:00
Document Modified: 2016-08-24 03:03:00
| 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 57981 |
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