[Federal Register Volume 80, Number 203 (Wednesday, October 21, 2015)]
[Notices]
[Pages 63852-63855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26676]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76161; File No. SR-NYSEArca-2015-88]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending
Representations Regarding the Names and Principal Investments of
Certain WBI SMID Funds Currently Listed and Traded on the Exchange
Under NYSE Arca Equities Rule 8.600
October 15, 2015.
Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on September 30, 2015, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 change representations regarding the names
and principal investments of each of the following: WBI SMID Tactical
Growth Shares; WBI SMID Tactical Value Shares; WBI SMID Tactical Yield
Shares; WBI SMID Tactical Select Shares; WBI Large Cap Tactical Growth
Shares; WBI Large Cap Tactical Value Shares; WBI Large Cap Tactical
Yield Shares; and WBI Large Cap Tactical Select Share (each a ``Fund''
and, collectively, the ``Funds''). Shares of the Funds have been
approved for listing and trading on the Exchange under NYSE Arca
Equities Rule 8.600. The text of the proposed rule change is available
on the Exchange's Web site at www.nyse.com, at the principal office of
the Exchange, 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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission has approved a proposed rule change relating to
listing and trading on the Exchange of shares (``Shares'') of the Funds
under NYSE Arca Equities Rule 8.600,\4\ which governs the listing and
trading of Managed Fund Shares.\5\ The Funds' Shares are currently
listed and traded on the Exchange under NYSE Arca Equities Rule 8.600.
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\4\ See Securities Exchange Act Release No. 72895 (August 21,
2014), 79 FR 51210 (August 27, 2014) (SR-NYSEArca-2014-67) (the
``Prior Order''). The notice with respect to the Prior Order was
published in Securities Exchange Act Release No. 72526 (July 2,
2014), 79 FR 39035 (July 9, 2014) (``Prior Notice'' and, together
with the Prior Order, the ``Prior Release'').
\5\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
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The Shares are offered by Absolute Shares Trust (the ``Trust''), a
statutory trust organized under the laws of the State of Delaware and
registered with the Commission as an open-end management investment
company.\6\ The investment adviser to the Fund is Millington
Securities, Inc. (the ``Adviser'') and WBI Investments, Inc. is each
Fund's sub-adviser (``Sub-Adviser'').
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\6\ The Trust is registered under the 1940 Act. On December 9,
2013, the Trust filed with the Commission its registration statement
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a)
(``Securities Act''), and under the 1940 Act relating to the Funds
(File Nos. 333-192733 and 811-22917) (as amended, the ``Registration
Statement''). The Trust filed supplements to amend the prospectus
contained in the Registration Statement on July 17, 2015 and filed
post-effective amendments to the Registration Statement on August
21, 2015, which amendment will become effective as of October 31,
2015, reflecting the changes to the Funds described herein. For the
avoidance of doubt, the names and principal investment strategies of
the WBI Tactical Income Shares and the WBI Tactical High Income
Shares, which also are series in the Trust approved in the Prior
Release, are not being changed. The description of the operation of
the Trust and the Funds herein is based, in part, on the
Registration Statement. In addition, the Commission has issued an
order granting certain exemptive relief to the Trust under the 1940
Act. See Investment Company Act Release No. 30543 (May 29, 2013)
(File No. 812-13886) (``Exemptive Order'').
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Common Fund Strategy and Characteristics
The principal investment objective of each Fund is to seek long-
term capital appreciation and the potential for current income, while
also seeking to protect principal during unfavorable market conditions.
As described in the Prior Release, the Sub-Adviser manages each Fund's
portfolio based on a proprietary selection process as described in the
Prior Release (the ``Selection Process''). The Selection Process
attempts to provide consistent, attractive returns net of expenses with
potentially less volatility and risk to capital than traditional
approaches,
[[Page 63853]]
whatever market conditions may be. Each Fund defines an absolute return
approach to investment management in this way. The Selection Process
includes a buy discipline and a sell discipline as described in the
Prior Release. In this proposed rule change, the Exchange proposes (1)
to reflect changes to the names of Funds from the names included in the
Prior Release; and (2) to change representations relating to
``Principal Investments'' of each Fund in the Prior Release that each
Fund will invest at least 80% of net assets in specified equity
securities to representations that each Fund will seek to invest
principally in such specified equity securities, cash and ``Cash
Equivalents'' (as described below) when it believes this is consistent
with each Fund's investment objective of protecting principal.\7\ For
clarity, each Fund will invest at least 80% of its net assets in its
principal investment strategy.
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\7\ Under the Prior Release, the Funds could temporarily depart
from their respective 80% principal investment strategies and make
``short term investments in cash, cash equivalents, high-quality
short-term debt securities and money market instruments for
temporary defensive purposes in response to adverse market, economic
or political conditions. . . . [E]ach Fund could acquire the
following short-term investments: (1) Certificates of deposit issued
by commercial banks as well as savings banks or savings and loan
associations; (2) bankers' acceptances; (3) time deposits; and (4)
commercial paper and short-term notes rated at the time of purchase
``A-2'' or higher by Standard & Poor's[supreg], ``Prime-1'' by
Moody's[supreg] Investors Services Inc., or similarly rated by
another nationally recognized statistical rating organization, or,
if unrated, will be determined by the Sub-Adviser to be of
comparable quality, as well as U.S. Government obligations.'' Such
high-quality short-term debt securities, money market instruments
and the investments enumerated above are hereinafter collectively
referred to as ``Cash Equivalents''. In this proposed rule change,
Cash Equivalents will be included in each Fund's principal
investment strategy and no longer only for temporary defensive
purposes. Intra-day price information for Cash Equivalents will be
available from major market data vendors.
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WBI SMID Tactical Growth Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies selected on the basis of the Selection
Process.\8\ Going forward, the Fund will seek to invest principally in
the exchange-listed equity securities of small-capitalization and mid-
capitalization domestic and foreign companies, cash and Cash
Equivalents, selected on the basis of the Selection Process.
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\8\ The Adviser represents that the Adviser and the Sub-Adviser
have managed and will continue to manage the Funds in the manner
described in the Prior Release, and will not implement the changes
described herein until the instant proposed rule change is
operative. The change to the name of the Funds and to the Funds'
investments as described herein will be effective upon the filing an
additional amendment to the Registration Statement.
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In addition, going forward, the Fund's name will change to WBI
Tactical SMG Shares.
WBI SMID Tactical Value Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies selected by the Sub-Adviser utilizing
the Selection Process. Going forward, the Fund will seek to invest
principally in the exchange-listed equity securities of small-
capitalization and mid-capitalization domestic and foreign companies,
cash and Cash Equivalents, selected by the Sub-Adviser utilizing the
Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical SMV Shares.
WBI SMID Tactical Yield Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
dividend-paying equity securities of small-capitalization and mid-
capitalization domestic and foreign companies selected by the Sub-
Adviser utilizing the Selection Process. Going forward, the Fund will
seek to invest principally in the exchange-listed dividend-paying
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies, cash and Cash Equivalents, selected by
the Sub-Adviser utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical SMY Shares.
WBI SMID Tactical Select Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of small-capitalization and mid-capitalization
domestic and foreign companies selected by the Sub-Adviser utilizing
the Selection Process. Going forward, the Fund will seek to invest
principally in the exchange-listed equity securities of small-
capitalization and mid-capitalization domestic and foreign companies,
cash and Cash Equivalents, selected by the Sub-Adviser utilizing the
Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical SMS Shares.
WBI Large Cap Tactical Growth Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of large capitalization domestic and foreign
companies selected by the Sub-Adviser utilizing the Selection Process.
Going forward, the Fund will seek to invest principally in the
exchange-listed equity securities of large capitalization domestic and
foreign companies, cash and Cash Equivalents, selected by the Sub-
Adviser utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCG Shares.
WBI Large Cap Tactical Value Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of large capitalization domestic and foreign
companies selected by the Sub-Adviser utilizing the Selection Process.
Going forward, the Fund will seek to invest principally in the
exchange-listed equity securities of large capitalization domestic and
foreign companies, cash and Cash Equivalents, selected by the Sub-
Adviser utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCV Shares.
WBI Large Cap Tactical Yield Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
dividend-paying equity securities of large capitalization domestic and
foreign companies selected by the Sub-Adviser utilizing the Selection
Process. Going forward, the Fund will seek to invest principally in the
exchange-listed dividend-paying equity securities of large
capitalization domestic and foreign companies, cash and Cash
Equivalents, selected by the Sub-Adviser utilizing the Selection
Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCY Shares.
WBI Large Cap Tactical Select Shares
As described in the Prior Release, under normal market conditions,
the Fund invests at least 80% of its net assets in the exchange-listed
equity securities of large capitalization domestic and foreign
companies
[[Page 63854]]
selected by the Sub-Adviser utilizing the Selection Process. Going
forward, the Fund will seek to invest principally in the exchange-
listed equity securities of large capitalization domestic and foreign
companies, cash and Cash Equivalents, selected by the Sub-Adviser
utilizing the Selection Process.
In addition, going forward, the Fund's name will change to WBI
Tactical LCS Shares.
Except for the changes described above, all other representations
made in the Prior Release remain unchanged.\9\ The Funds will comply
with all initial and continued listing requirements under NYSE Arca
Equities Rule 8.600.
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\9\ See note 4, supra. All terms referenced but not defined
herein are defined in the Prior Release.
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under section 6(b)(5) \10\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
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\10\ 15 U.S.C. 78f(b)(5).
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As noted above, the Selection Process attempts to provide
consistent, attractive returns net of expenses with potentially less
volatility and risk to capital than traditional approaches, whatever
market conditions may be. While the Funds would continue to invest in
the types of securities described in the Prior Release, the proposed
change to represent that each Fund will seek to invest principally in
specified exchange-listed equity securities, cash and Cash Equivalents,
rather than at least 80% of its net assets in specified exchange-listed
equity securities, would provide additional flexibility to seek each
Funds' investment objective of protecting principal. The inclusion of
cash and Cash Equivalents in each Fund's principal investments, rather
than the use of such instruments solely for temporary defensive
purposes, would facilitate each Fund's ability to protect principal,
which could serve as a significant benefit for investors.
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Shares are listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. Except for the changes described above, all other
representations made in the Prior Release remain unchanged.\11\
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\11\ See note 4, supra. All terms referenced but not defined
herein are defined in the Prior Release.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange believes the
proposed rule change is designed to allow the Fund to invest in
securities that would permit a Fund to better implement the Selection
Process as described in the Prior Release, and will enhance competition
among issues of Managed Fund Shares that invest in equity securities.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Commission believes that waiver of the 30-day operative
delay period is consistent with the protection of investors and the
public interest. The Commission notes that the proposal would allow the
Funds greater flexibility in seeking their investment objective of
protecting principal during unfavorable market conditions, which could
benefit investors and the public interest. Therefore, the Commission
designates the proposed rule change to be operative upon filing.\12\
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\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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-NYSEArca-2015-88 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2015-88. 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 such filing will also 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-2015-88 and should
be
[[Page 63855]]
submitted on or before November 12, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26676 Filed 10-20-15; 8:45 am]
BILLING CODE 8011-01-P