Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to the Adoption of Listing Standards for Managed Trust Securities and the Listing and Trading of Shares of the iShares® Diversified Alternatives Trust

I. Introduction

On April 9, 2009, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (“NYSE Arca Equities” or “Corporation”), filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b\4 thereunder, a proposed rule change to: (1) Adopt listing standards for Managed Trust Securities; (2) amend NYSE Arca Equities Rule 7.34 and its Listing Fees to add references to proposed NYSE Arca Equities Rule 8.700 relating to Managed Trust Securities; and (3) list and trade shares (“Shares”) of the iShares® Diversified Alternatives Trust (“Trust”). On April 24, 2009, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change, as amended, was published for comment in the Federal Register on May 6, 2009. The Commission received no comments on the proposal. This order approves the proposed rule change, as amended.

II. Description of the Proposal

A. Listing Standards for Managed Trust Securities

The Exchange proposes to adopt new NYSE Arca Equities Rule 8.700 to list and trade, or trade pursuant to unlisted trading privileges, Managed Trust Securities. A Managed Trust Security as a security that is registered under the Securities Act of 1933, as amended, and (a) is issued by a trust that (i) is a commodity pool, as defined in the Commodity Exchange Act (“CEA”) and regulations thereunder, and is managed by a commodity pool operator registered with the Commodity Futures Trading Commission (“CFTC”), and (ii) holds long and/or short positions in exchange-traded futures contracts and/or currency forward contracts selected by the trust's advisor consistent with the trust's investment objectives, which would only include exchange-traded futures contracts involving commodities, currencies, stock indices, fixed income indices, interest rates and sovereign, private, and mortgage or asset backed debt instruments and/or forward contracts on specified currencies, as disclosed in the trust's prospectus, as such may be amended from time to time, and (b) is issued and redeemed continuously in specified aggregate amounts at the next applicable net asset value (“NAV”).

Additional details of proposed NYSE Arca Equities Rule 8.700 and the proposed conforming changes to NYSE Arca Equities Rule 7.34 and the NYSE Arca Equities Listing Fee Schedule can be found in the Notice.

B. Description of the Trust and the Shares

The Exchange also proposes to list and trade the Shares. The Shares represent ownership of a fractional undivided beneficial interest in the net assets of the Trust. The Trust will be a commodity pool, as defined in the CEA and the applicable rules of the CFTC, and will be formed as a Delaware statutory trust.

The investment objective of the Trust will be to maximize absolute returns from its portfolio of (i) exchange-traded futures contracts involving commodities, currencies, certain eligible stock and/or bond indices, interest rates and sovereign, private and mortgage- or asset-backed debt instruments and/or (ii) certain currency forward contracts in the top 25 most liquid or actively traded currencies measured by turnover in the most recent BIS Central Bank Survey, each as disclosed in the Trust's prospectus as such may be amended from time to time, while seeking to reduce the risks and volatility inherent in those investments by taking long and short positions in historically correlated assets. The Trust will also earn interest on the assets used to collateralize its trading positions. The return on assets in the portfolio, if any, is not intended to track the performance of any index or benchmark.

Additional details regarding creations and redemptions of the Shares, the organization and structure of the Trust, the commodity trading advisor of the Trust, the dissemination and availability of information about the underlying assets, trading halts, applicable trading rules, surveillance, and the Information Bulletin can be found in the Notice and/or the Registration Statement.

III. Discussion and Commission's Findings

After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. In particular, the Commission finds that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act, which requires, among other things, that the Exchange's rules be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.

With respect to the Exchange's proposal to adopt new NYSE Arca Equities Rule 8.700 relating to the listing and trading of Managed Trust Securities, the Commission notes that the standards proposed therein are based on listing standards of other derivative securities products that have previously been approved by the Commission. Except for the definition of “Managed Trust Securities,” each of the defined terms under new NYSE Arca Equities Rule 8.700(c) are substantively identical to those applicable to Managed Fund Shares under NYSE Arca Equities Rule 8.600. In addition, almost all of the proposed initial and continued listing criteria and Commentaries under new NYSE Arca Equities Rule 8.700 are substantively identical to those applicable to Managed Fund Shares set forth in NYSE Arca Equities Rule 8.600. Specifically with respect to the proposed continued listing criteria for Managed Trust Securities, the Commission notes that new NYSE Arca Equities Rule 8.700(e)(2)(C)(i) is substantively identical to the continued listing criteria applicable to other types of commodity- and currency-based derivative securities products. The Commission also notes that proposed NYSE Arca Equities Rules 8.700(e)(2)(E), 8.700(e)(3)-(5), and 8.700(f)-(g), relating to the trust, trustee, voting rights, Market Maker accounts, and limitation of liability of the Corporation, are substantively identical to those respective provisions applicable to other types of commodity- and currency-based derivative securities products. Further, the Commission notes that the Exchange is required to file a proposed rule change pursuant to Section 19(b)(1) of the Act to list and trade each issue of Managed Trust Securities. The Commission believes that the proposed new listing rule, NYSE Arca Equities Rule 8.700, is reasonably designed to protect investors and the public interest.

In addition, the Commission finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act, which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers and investors of information with respect to quotations for and transactions in securities. Quotation and last-sale information for the Shares will be available via the Consolidated Tape Association CQ High-Speed Lines, and one or more major market data vendors will disseminate the Intraday Indicative Value (“IIV”) at least every 15 seconds during the time the Shares trade on the Exchange. In addition, the Trust will make available daily on its Web site the Disclosed Portfolio, which will include, as applicable, the name identifier and number of each futures contract, the amount and currency type of each forward contract, and the amount of cash held. The Web site for the Trust will also contain the following information: (1) The prior business day's NAV per Share and the reported closing price; (2) the mid-point of the bid-ask price in relation to the NAV per Share as of the time the NAV is calculated (“Bid-Ask Price”); (3) calculation of the premium or discount of such price against such NAV per Share; (4) data in chart form displaying the frequency distribution of discounts and premiums of the Bid-Ask Price against the NAV per Share, within appropriate ranges for each of the four previous calendar quarters; (5) the prospectus and the most recent periodic reports filed with the Commission or required by the CFTC; and (6) other applicable quantitative information. The Exchange will disseminate for the Trust on a daily basis by means of Consolidated Tape Association CQ High Speed Lines information with respect to the recent Trust NAV, number of Shares outstanding, and the basket amount. The Exchange will also make available on its Web site daily trading volume, closing prices, and the Trust's NAV per Share. The Exchange states that pricing for futures contracts is available from the relevant exchange on which such futures contracts trade, and pricing for forward contracts is available from major market data vendors. Lastly, information regarding the 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, and the previous day's closing price and trading volume information for the Shares will be published daily in the financial sections of newspapers.

The Commission further believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Commission notes that the Exchange will obtain a representation from the Trust 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. Additionally, if the Exchange becomes aware that the NAV or the Disclosed Portfolio is not disseminated daily to all market participants at the same time, the Exchange will halt trading in the Shares until such information is available to all market participants. Further, if the IIV is not being disseminated as required, the Exchange may halt trading during the day in which the disruption occurs; if the interruption persists past the day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. The Exchange represents that Barclays Global Fund Advisors, the commodity trading advisor of the Trust, is affiliated with a broker-dealer. As a result, Barclays Global Fund Advisors and its applicable affiliated broker-dealers that are authorized to conduct trading have in place (or will erect before launch) policies and procedures designed to prevent the disclosure of material non-public information, including changes and adjustments to the Disclosed Portfolio. Finally, the Commission notes that the Reporting Authority that provides the Disclosed Portfolio must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the actual components of the portfolio.

The Exchange has represented that the Shares are deemed equity securities subject to the Exchange's rules governing the trading of equity securities. In support of this proposal, the Exchange has made representations, including:

(1) The Shares will conform to the initial and continued listing criteria under proposed NYSE Arca Equities Rule 8.700.

(2) The Exchange's surveillance 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. In addition, the Exchange has an Information Sharing Agreement in place with the New York Mercantile Exchange, the Kansas City Board of Trade, ICE Futures, and the London Metal Exchange for the purpose of providing information in connection with trading in or related to futures contracts traded on such exchanges. Further, for components traded on exchanges, not more than 10% of the weight of the Trust's portfolio in the aggregate shall consist of components whose principal trading market is not a member of the Intermarket Surveillance Group or is a market with which the Exchange does not have a comprehensive surveillance sharing agreement.

(3) Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Information Bulletin will discuss the following: (a) The procedures for purchases and redemptions of Shares and that Shares are not individually redeemable; (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (c) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; (d) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated IIV will not be calculated or publicly disseminated; and (e) trading information.

(4) The Fund will be in compliance with Rule 10A-3 under the Act.

(5) A minimum of 100,000 Shares will be required to be outstanding at the start of trading.

This approval order is based on the Exchange's representations.

For the foregoing reasons, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act and the rules and regulations thereunder applicable to a national securities exchange.

IV. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-NYSEArca-2009-30), as modified by Amendment No. 1 thereto, be, and it hereby is, approved.