SEC Division of Trading and Markets no-action letter: WisdomTree Trust Dreyfus Commodity Currency Fund an Actively Managed ETF

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
DIVISION OF
TRADING AND MARKETS
September 2, 20 10
Jack P.. Drogin

Schiff Hardin

1666 K Street NW, Suite 300

Washington, DC 20006

Re: WisdomTree Dreyfus Commodity Currency Fund, an Actively-Managed ETF File No. TP 10-28 Dear Mr. Drogin:
In your letter dated September 2, 20 10, as supplemented by conversations with the staff ofthe Division ofTrading and Markets ("Division"), WisdomTree Trust (the "Trust") on behalf of itself, the Fund, any national securities exchange or national securities association on or through which the exchange traded shares of the Fund ("Shares") are listed and/or may subsequently trade, the Distributor, and persons or entities engaging in transactions in Shares, requests exemptive relief from Rule IOb-17 under the Securities Exchange Act of 1.934, as amended ("Exchange Act") and interpretive relief regarding Rules to I and 102 of Regulation M in conn~ction with secondary market transactions in Shares and the creation or redemption of Creation Units, as discussed in your letter. We have enclosed a photocopy of your letter. Each defined term in this letter has the same meaning as defined in your letter, unless we note otherwise. The Trust was organized on December 15, 2005 as a Delaware statutory trust. The Trust is registered with the Commission under the Investment Company Act of 1940, as amended ("IC Act"), as an open-end management investment company. The Trust is authorized to have multiple series or portfolios, including the Fund that is the subject ofthis request. The Fund seeks to achieve totalretutDs reflective of money m~et rates in selected commodity-producing cOuntries arid changes to value ofsueh countries' currencies relative to the U.S. dollar. In addition to seeking broad exposure across countries and currencies, the Fund intends to seek exposure across currencies correlated to each ofthe key commodity groups identified in your letter. The· Fund intends to achieve exposure to selected commodity-:producing countries available to U.S. investors by investing primarily in short-term U.S. money market securities and forward currency contracts and swaps. The combination ofmoney market securities With forward currency contracts and currency swaps is designed to .create a position economically similar to a money market instrument denominated in a non-U.S. currency. The Fund will operate in a manner substantially identical to other ETFs to which the Staff has granted relief in the past. In your letter, you also represent the following: .

• Shares ofthe FWld will be issued by an open-end management investment company that
  is registered with the Commission;

Jack P. Drogin
Schiff Hardin
September 2, 20 10
Page 20f5

• The Fund will continuously redeem, at net asset value ("NAV"), Creation Unit
  Aggregations of50,000 Shares or such other amount where the value ofa Creation Unit is at least $1,000,000 at the time of issuance, and the secondary market price ofthe Shares should not vary substantially from the NAV ofsuch Shares;
• Shares ofthe Fund will be listed and traded on a Listing Exchange;
• No security (other than Government Securities or Foreign Government Securities) held
  by the Fund will represent more than 30% ofthe assets of the Fund, and the five highest weighte<i component securities held by the Fund's portfolio (other than Government Securities or Foreign Government Securities) will not in the aggregate account for more than 65% of the assets of the Fund;
• The Fund intends to diversifY that portion of its portfolio not invested in Government
  Securities and/or Foreign Government Securities by investing in multiple non-affiliated Issuers;
• On each Business Day before commencement of trading in Shares on the Listing
  Exchange, the Fund will make available on their Website the identities and quantities of the Portfolio Securities which will fonn the basis for their calculation ofNAV at the end -of the Business Day;
• The Listing Exchange will disseminate: (i) continuously throughout the trading day,
  through the facilities ofthe Consolidated Tape Association, the market value ofa Share, and (ii) every 15 seconds throughout the trading day, separately from the consolidated tape, a calculation of the estimated NAV of a Share;
• The arbitrage mechanism will be facilitated by the transparency ofthe Fund's portfolio
  and the availabilityofthe nv, the liquidity ofits Portfolio Securities, and the ability to access such securities, as well as the arbitrageurS' -ability to create workable hedges;
• The Fund will invest solely in liquid Portfolio Securities;
• The Fund will invest in Portfolio Securities with liquidity levels that will facilitate an

effective and efficient arbitrage mechanism and the ability to create workable hedges;

• Arbitrageurs are expected-to take advantage ofprice variations between the Fund's

market price and its NAV; and '

• A close alignment between the market price of Fund shares and the Fund's NAV is

expected.

Jack P. Drogin

Schiff Hardin

September 2, 20 10

Response:
Regulation M
Redeemable securities issued by an open-end management investment company·are excepted from the provisions of Rules 101 and 102 of Regulation M. The Commission granted the Trust an exemption from certain provisions of the IC Act in order to permit the Trust to maintain its registration as an open-end management investment company and to issue shares that are redeemable only in Creation Unit size aggregations ofShares. I Rule 101 ofRegulation M Generally, Rule 101 ofReg·ulation M is an anti-manipulation regulation that, subject to certain exceptions, prohibits any "distribution participant" and its "affiliated purchasers" from bidding for, purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of a distribution until after the applicable restricted period, except as specifically permitted in the Regulation. The provisions ofRule 101 of Regulation M apply to underwriters, prospective underwriters, brokers, dealers, or other persons who have agreed to participate or are participating in a distribution ofsecurities. On the basis ofyour representations and the facl$ presented, and without necessarily concurring in your analysis, particularly that the Trust is a registered open-end management investment company that will continuouSlyredeem at NAV, Creation Unit size aggregations of the Shares ofthe Fund, and the secondary market price of the Shares of th~ Fund should not vary substantially from the NAV ofsuch Shares, which is based on the value ofthe Portfolio Securities, the Division hereby confirms that the Trust is excepted under paragraph (c)(4) of Rule 101 of Regulation M with r:especito the Fund. Thus, persons who may be deemed to be . participating in a distribution ofShares ofthe Fund may bid for Or purchase such Shares during their participation in such distribution.2 The Division also confinns the interpretationofRtiklOl ofRegulation M thata redemption ofCreation Unit size aggregations ofShares ofthe Fund and the receiptofPortfolio Securities in exchange therefor by a participant in a distribution ofShares ofthe Fund would not I See Ie Act Release Nos. 28174 (Feb. 27, 2008) and 28471 (0et.27, 2(08). 2 We note that Regulation M does not prohibit a distribution participant and its affiliated purchasers frooi bidding . for and purchasing Portfolio Securities in accor~ce with the exceptions contained in paragraphs (bX6) and (cXt) ofRule IOL Rule 101(bX6Xi) excepts baskettriuisactions in which bids or purchases are made in the ordinary course ofbusiness'in connection with a basket of20 or more securities in which a covered security does not comprise more that 5% oCthe value. ofthe basket purchased. Rule 101(bX6Xii) excepts adjustments to such a basket made in the ordinary course of business as a result ofa change in the composition ofa standardized index. Also, Rule 10 I(cX I) exceptS transactions in actively-traded securities, that is, securities that have an average daily trading volume value ofat
least $1 million and are issued by an issuer whose common equity securities have a public float value ofat least $150 million; provided however, that such securities are not issued by the distribution participant or an affiliate ofthe distribution participant.

Jack P. Drogin

Schiff Hardin

September 2, 20 I0

constitute an «attempt to induce any person to bid for or purchase a covered security, during the applicable restricted period" within the meaning of Regulation M,.and therefore would not violate Regulation M. Rule 102 ofRegulation M Rule 102 of Regulation M prohibits issuers, selling security holders, or any affiliated purchaser ofsuch person from bidding for, purchasing, or attempting to induce any person to bid for or purchase a covered security during the applicable. restricted period in connection with a distribution ofsecurities effected by or on behalfofan issuer or selling security holder. Rule 100 of Regulation M defines "distribution" to mean any offering of securities that is distinguished from ordinary trading transactions by the magnitude ofthe offenng and the presence ofspecial selling efforts and selling methods. On the basis of your representations and the facts presented, particularly that the Trust is a registered open-end management investment company that will redeem at NAV Creation Units ofShares ofthe Fund, the Division hereby confirms that the Trust is excepted under paragraph (d)(4) of Rule 102 of Regulation M with respect to the Fund, thus permitting the Fund to redeem Shares ofthe Fund during the continuous offering ofsuch Shares. Rule 10b-1 7 Rule IOb-17, with certain exceptions, requires an issuer of a class ofpublicly traded securities to give notice ofcertain specified actions (for example, a dividend distribution, stock split, or rights offering) relating to such class ofsecurities in accordance with Rule 1Ob-17(b). On the basis ofyour representations and the facts presented, and without ne.cessarily concurring in your analysis, particularly that the Commission has determined to grant an exemption from the IC Act to register the Trust as an open-end management investment company notwithstanding the fact that it isSues ShareS With lumtedredeemamlity, the Commission hereby grants an exemption from the requirements ofRule 1Ob-17 t~ the Trust with respect to transactions in the Shares.3 .. . The foregoing exemption from Rule 10b-17 under the Exchange Act and the interpretive advice regarding Rules 10 I and 102 ofRegulation M are baSed solely on your representations . and the facts presented to the Division, and are strictly limited to the application ofthose rules to transactions involving the Shares ofthe Fund under the circumstances described above and in .. 'your letter: Such transactions should be discontinued, pending presentation ofthe facts for our consideration, in the event that-any material,change occurs with respect to any ofthose facts or We also note that compliance with Rule IOb-17 would be impractical in light ofthe natUre ofthe Fund: This is because it is not.possible for the Trust to accurately project ten days in advance what dividend, ifany, would be paid on a particular recor~ date. . . 3

Jack P. Drogin

Schiff Hardin

September 2, 20 I 0

Page 50f5

representations. Moreover, the foregoing exemption from Rule IOb-17 under the Exchange Act and the interpretive advice regarding Rules 101 and 102 of Regulation M are subject to the condition that such transactions in Shares ofthe Fund, or any related securities, are not made for the purpose of creating actual, or apparent, active trading in or raising or otherwise affecting the price ofsuch securities. The exemption and interpretations are subject to modification or revocation if at any time the Commission or Division detennines that such action is necessary or appropriate in furtherance ofthe purposes ofthe Exchange Act. In addition, personsrelying on the exemption and interpretations are directed to the anti-fraud and anti-manipulation provisions of the Exchange Act, particularly Sections 9(a), lO(b), and Rule IOb-5 thereunder. Responsibility for compliance with these and other provisions ofthe federal or state securities laws must rest with . . persons relying on the exemption and interpretations. . The Division expresses no view with respect to other questions that the proposed transactions may raise, including, but not limited to, the adequacy ofdisclosure concerning, and the applicability ofother federal and state laws to, the proposed transactions. For the Commission, by the Division ofTrading

and Markets,

pursuant to delegated authority,

Victoria L. Crane

Assistant Director

Attachment

41. 1666 K Street N.W. SCHIFFHARDINW' Suite 300
    Washington, OC 20006
    T 202.778.6400 Jack P. Oragin F 202.778.6460 202-778-6422 jdrogln@schlffhardln.com www.schlffhardln.com Josephine·Tao

Assistant Director

Division of Trading and MarketS

Securities and Exchange Commission·

100 F Street, N.E.

Washington, DC 20549

Re: .Request of WisdomTree Trust, et aI., for Exemptive Relief from Rule 10b-17 and Interpretive Relief Regarding Rules 101 and 102 ofRegulation M under the Securities Exchange Act of 1934 for the WisdoniTree Dreyfus Commodity Currency Fund an Actively Managed ETF Dear Ms. Tao:
SUMMARY OF REQUEST FOR RELIEF
We are writing on behaIfofWisdomTree Trust ("Trust") and the WisdomTree Dreyfus Commodity Currency Fund (the "Fund"), a series ofthe Trust described herein. The Trust, on behalfofitself, any national securities exchange or national securities association on or through which shares of the Fund {"Sbares"i are listed (each, a "Listing Exchange") and/or may subsequently trade (with each such market referred to herein as a "Market"i, ALPS Distributors, I The Trust intends to list the Shares of the Fund descnbed· herein. The· Commission has approved a proposed rule change by NYSEArca, Inc. to pennit it to list the Shares pursuant to Section 19(b) of the Exchange Act. See Securities Exchange Act Release No. 62623 (AugUst 2, 2010). In addition, the Commission granted the requested reliefto the Trust from the application ofcertain sections ofthe Investment Company Act of 1940 ("1940 Act") and the rules promulgated thereunder (see Ret Nos. IC -28174 (February 27,2008); IC-28471 (October 27, 2008». . 2 In the future, the Trust may detennine to list Shares on a Market other than the Listing Exchange. If the Trust lists Shares on a Market other than the Listing Exchange, Shares will be listed in accordance with exchange listing standards that are, or will becOme, effective pursuant to Section 19(b) ofthe Exchange Act. Ifthe Shares also . trade on a Market pursuant to unlisted trading privileges, such trading will be conducted pursuant to self-regUlatory organization rules that have become effective pursuant W Exchange Acr Section 19(b). Chicago I Washington I New York /. lake Forest / Atlanta / San francisco I Boston·

~t SCHIFFHARDINup
Josephine Tao

Assistant Direct~r

September 2, 20I0

Inc. ("Distributor") and persons or entities engaging in transactions in Shares, including Authorized Participants (as defined below), hereby requests, as appropriate, from the staffofthe Division ofTrading and Markets ("Staff") ofthe Securities and Exchange Commission ("Conunission"), or from the Commission, an exemption from, Rule 1Ob-17 and interpretive reliefregarding Rules 101 and 102 ofRegulation M under the Securities Exchange Act of 1934 ("Exchange Act"). The Fund is intended to operate as an exchange traded fund organized as an open-end investment company (an "ETF").· The Fund is actively managed. The investment adviser to the Fund will select securities consistent with the Fund's investment objective and policies without reference to the composition ofan index.3 The Staff has issued relief substantially identical to that requested herein to index-based ETFsthat are listed and traded on a national securities exchange and that meet certain other conditions ("Prior Index ETFs,,).4 The Staff also has issued reliefsubstap.tially identical to that requested herein to non-index based or "actively managed" ETFs, inCluding actively managed ETFs issued by the Trust, that are listed and traded on a national securities exchange, and that meet certain other conditions (the "Prior Actively Managed ETFs").s Prior Index ETFs and Prior .3 The Fund intends to invest primanly in U.S. government securities and forward currency contracts. The Fund is not leveraged and will. not use leveraged instruments to enhance leverage. Additionally, the Fund may invest cash and cash equivalents or other money market instruments, including shares ofmoney market mutual funds and repurchase agreements, and equity or ftxed income SCf?"ties traded in international markets. 4 See Letterfrom~Josephine Tao to Paul, H~gs, Janofsky and Walker.LLP regarding Class Relief for Combination Exchange Traded Funds, dated June 27, 2007; Letter from James A. Brigagliano to Wilkie Faa & Gallagher, LLP. regarding Class Relief for Fixed Income Exchange Traded index Funds, dated April 9, 2007 (the "Fixed Income Class Relief Lettern); Letter from James A.Brigagliano to PowerSbares ExcbangeTraded Fund .. Trust regarding Class Relief for Exchange Traded Index Funds, dated October 24, 2006; Letter from Catherine McGuire to the Securities IndustIy Association Derivative Products Committee, dated November 21, 2005 (the "SIN' Letter); Letter from James A. Brigagliano to Ira Himmerman, Senior Vice-President and General Counsel, Securities IndustIy Association regarding nO action relief from rule 200(g) of Regulation SHO, dated January 3, 2005; Letter from James A. Brigagliaoo to Claire P. McGrath, Vice President and Special Counsel, American Stock Exchange LLC, dated August 17, 2001. . S See Letter from Josephine Tao to Schiff Hardin LLP regarding WisdomTree Emerging Markets Local Debt Fund an Actively Managed ETF, dated August 6, 2010; Letter from Josephine Tao to Morgan, Lewis & . Bockius LLP,
regarding AdvisorSl1ares Trust Actively-Managed ETFI WCMlBNY Mellon Focused Growth ADR, dated June 18,2010; Letter from Josephine Tao to WisdomTree Trust Real Return Actively Managed ETF, dated May 27, 2010; Letter from James A. Brigagliano to Morgan, Lewis & Bockius LLP, regarding U.S. One Trust Actively-Managed ETFof ETFs, dated May 4, 2010; Letter from Josephine Tao to Grail Advisors ETF Trust

~t SCHIFFHARDfNup
Josephine Tao

Assistant Director

Page 30f21

Actively Managed ETFs may be referred to collectively as the "Prior ETFs." The Fund will operate in a manner substantially identical to the Prior ETFs. For example, the Fund will disclose its portfolio holdings on a daily basis. In addition, infonnation about the prices of the securities and other instruments held by the FUnd is readily available from a variety of sources. The Authorized Participants (as defined below) and other institutional investors expected to invest in the Fund have access to this infonnation and will be able to make their own assessment of the value of the Fund's portfolio. Moreover, infonnation respecting fluctuations in currency exchange rates, one of the principal factors expected to effect daily fluctuations in.the NAV of the Fund, is readily available to the marketplace throughout each Business Day (as defined below). The staff letters to Prior Actively Managed ETFs provided relief specific to the &mds described therein and, therefore, the Trust and the Fund are not entitled to rely on those letters for relief. Because the Fund is not an index-based ETF, it also is not entitled to rely on the relief previously provided to Prior fudex ETFs. The Trust and the Fund note, however, that their proposal- the creation and issuance by an·actively-managed investment company of shares that individually trade on a national securities exchange, but that can only be purchased from and redeemed with the issuing investm~nt company in large aggregations - is no longer novel. For these reasons, we do not believe that the Fund raises any significant ~ew regulatory issues. In connection with this request, the Trust represents as follows:

• Shares of the Fund will be issued by an open-end management investment company
  that is registered with the COmmission under the Investment Company Act of 1940;
• The Fund will issue and redeem, at net asset value (sometimes hereinafter referred to
  as ''NAV''), Creafion Units of aUe.ast 50,000 Shares or such other amount where the Actively Managed Fixed Income Exchange Traded Funds, dated January 27, 2010; Letter from JosePhine Tao to PIMCO ETF Trust Actively Managed Fixed Income Exchange Traded Fund, dated November 10,2009; Letter from Josephine Tao to Grail AdviSors ETF Trost, dated April 30, 2009, as revised May 6, 2009; Letter from Josephine Tao to WisdomTree Asset Management, me. regarding the WisdomTree Dreyfus Eoierging Currency Fund, dated January 7,2009; Letter from Josephine Tao to WisdomTree Asset Management, Inc.·regarding WisdomTree Trust actively managed ETFs, dated May 9, 2008; Letter from James A. Brigagliano to Clifford Chance USLLP regarding PowerShares Actively Managed Exchange Traded Fund Trost, dated April 4, 2008; and Letter from Josephine 1. Tao to Foley & Lardner LLP regarding Bear Stearns Active ETF Trust, dated March 24, 2008.

~t SCHIFFHARDINuP
Josephine Tao

Assistant Director

value of a Creation Unit is at least $1,000,000 at the time of issuance, and the secondary market price of the Shares should not vary substantially from the NAV of such Shares;

• Shares ofthe Fund will be listed and traded on a Listing Exchange;
• On each Business Day before commencement of trading in Shares on the Listing
  Exchange, the Fund will make available on its website the identities and quantities of the securities and other assets held by the Fund which will fonn the basis for its calculation ofNAV at the end ofthe Business Day; and
• The Listing Exchange or other market infonnation provider will disseminate every 15
  seconds throughout the trading day the intra-day proxy value ofthe Fund per Share. This Letter is divided into six parts. Part I is a description of the Trust and the Fund, Part II is a description of the Trust's disclosure documents with respect to its Shares, Part III is a comparison ofthe Trust against Prior ETFs, Part IV contains a discussion ofthe dissemination of infonnation regarding Shares, Part V contains the requests for relief and Part VI is the conclusion.
  PART I
  A. The Trust and· the Fund
  The Trust was organized as a Delaware statutory trust on December 15, i005 and is auth9rized to have multiple series or portfolios, one ofwhich is the subject ofthis request. The .'Trust is registered with the Commission under the Investment Company Act of 1940,.as amended ("1940 Act"), as an open-end management investment company and currently offers over forty (40) separate investment portfolios. . The Trust intends to list the Shares on NYSE Area ("Area"). The Trust will offer'and sell such shares pursuant to an amendment to its Registration Statement (Registration Nos. 811 21864 and 333-132380) on Fonn N-IA under the 1940 Act and the Securities Act of 1933 ("1933 Act"). A Registration Statement describing the Fund becaffie effective on March 19,2010 and was revised on June 29, 2010. . The Fund seeks to achieve total returqs. reflective ofmoney market rates in selected commodity-producing countries and changes:to value ofsuchco..mtries' currencies relative to the U.S. dollar. The tenn "commodity currency" generally is used to describe the currency of a

country whose economic success is commonly identified with the production and export of

~t SCHIFFHARDINup
Josephine Tao

i\ssist2UltI>irector

I>ivision ofTrading and Markets

commodities (such as preciouS metals, oil, agricultural products or other raw materials) and . whose value is closely linked to the value ofsuch commodities. i\s the demand for, or price of, such commodities increases money tends to flow into the country. This generally lifts the country's economic prospects and supports the value ofits currency. F(}r example, Canada is commoruy recognized as a leading producer and exporter ofoil and natural gas. Increases in the price ofoil and gas historically have had a positive influence on the value ofthe Canadian dollar relative to other currencies. Similarly, a significant portion ofthe economies ofi\ustralia and

• South i\frica are tied to mining and production ofindustrial and precious metals,.such as iron ore
  and gold. Increases in the prices such metals historically have provided support to the value of the i\ustralian dollar and South i\frican rand relative to other currencies. Conversely, declines in the demand for, or value of, such comniodities historically have contributed to declines in the relative value ofthese countries' currencies. The Fund is designed to provide exposure to both the currencies and money market rates available to foreign investors in selected commodity-producing countries. The Fund intends to invest incommodity-producing countries such.as i\ustralia, Brazil, Canada, Chile, Indonesia, Mexico, New Zealand, Norway, Russia·and South i\frica. In addition to seeking broad exposure across countries and currencies, the Fund intends to seek exposure across currencies correlated to each ofthe key commodity groups: industrial metals, precious metals, energy, agriculture and livestock. The Fund generally will invest only,in currencies that "float" relative to other currencies and that have active trading marketS. The value of a floating currency is largely :,:determined by supply and demand and prevailing market rates. In contrast, the value ofa ·"fixed" . currency generally is set by a government or central bankat an official exchange rate. The Fund generally does not intend to invest in the currencies ofnotable commodity produ~,such.as j China, Saudi i\rabia and the United t\rab Emirates, since they are fixed or otherwise closely

linked to the U.S. dollar. The Fund will only invest in currencies that the i\dviser and Sub . i\dviser (defined below) deem to be sufficiently liquid and accessible. The Fund intends to achieve exposure to selected commodity-producing countries .available to U.S. investors by investing primarily in short-tenn U.S. money market securities and forward currency contracts and swaps. The combination ofmoney market secutities with forward currency contracts and currency swaps is designed to create a position economically similar to a money market instrument denominated in a non-U.S. currency. i\ forward currency contract·is an agreement to buy or sell a specific currency at a future date at a price set at the time ofthe contract. i\ currency swap is an agreement between two parties to exchange one currencyfor another at a future rate. The Fund is not leveraged. In order to reduce interest rate

~t SCHIFFHARDINup
Josephine Tao
Assistant Director
. Securities and Exchange Commission risk, the Fund generally expects to maintain an average portfolio maturity of 90 days or less. The

• "average portfolio maturity" ofthe Fund is the average ofall the current maturities ofthe
  individual securities in the Fund's portfolio. Average portfolio maturity is important to investors as an indication ofthe Fund's sensitivity to changes in interest rates. Funds with longer portfolio maturities generally are subject to greater interest rate risk. All money market securities acquired by the .Fund will be rated in the upper two short-term ratings by at least two nationaHy recognized statistical rating organizations.. . No portfolio security held by the Fund (other than government securities as defined in
  section 3(a)(42) ofthe E~chan:ge Act ("Government Securities") and similar obligations of
  foreign governments or agencies offoreign govemments("Foreign Government Securities"» will represent more than 30% ofthe weight ofthe Fund and the five highest weighted portfolio securities ofthe Fund (other than Government Securities and/or Foreign Government Securities) will not in the aggregate account for more than 65% ofthe weight ofthe Fund. The Fund intends to diversify that portion ofits portfolio not invested in Government Securities and/or Foreign Government Securities by investing in multiple non-affiliated issuers. As a matter of general policy, the Fund will invest, undernormal circumstances, at least 80% ofits net assets, plus the amount of any borrowings for investment purposes, in investments . that are tied economically to selected commodity-producing countries available to U.S. investors that make a significant contribution to the global export ofcommodities. The remainder ofthe Fund's portfolio may be invested mGovernment Securities, Foreign Government Securities, and
• :U.S. money market instruments in a manner 4esigned to achieve its investment objective.
• B. Other Parties
  l. Adviser and Sub-Adviser
  The Fund will be advised by WisdomTree AssetManagement, Inc. ("Adviser").pursuant ::to ail Investment Advisory A~mentbetween the Trust and the Adviser. WisdomTree Asset Management is a Delaware corporation registered 'as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). The Adviser has offices located at 380 Madison Avenue, 21st Floor, New York NY 10017. The Adviser may designate one or more sub￾advisers (each, a "Sub-Adviser") for the Fund. The DreyfuS Corporation currently acts as Sub- . Adviser to the Fund.

ttSCHIFFHARDINup
Josephine Tao

Assistant Director

Page 70f21

The Adviser or the Sub-Adviser chooses the Fund's portfolio investments and places orders to buy and sell the Fund's portfolio investments. Any Sub-Adviser will not be affiliated (within the meaning ofSection 2(a)(3) ofthe 1940 Act) with the Adviser, the Distributor, Arca . or any other Market.
2. Distributor and AuthoriZed Participants
ALPS Distributors, Inc" a broker-dealer registered under the Exchange Act and a member ofthe Financial Industry Regulatory Authority, Inc. ("FINRA"), will act as the distributor and principal underwriter ofthe Creation Units ofShares ("Distributor"). The Distributor will distribute Shares on an agency basis. The Distributor is not affiliated (Within the meaning ofSection 2(a)(3) ofthe 1940 Act)with the Adviser, Sub-Adviser, Area or any other· Market. .Entities that have entered into an agreement with the Distributor to become "Authorized Participants" may place orders with the Distributor to purchase or redeem Creation Units, as described in Part II D. below. The Authorized Participants are not affiliated (within the-meaning ofSection 2(a)(3) ofthe 1940 Act) with the Adviser, Sub-Adviser, Arca or any other Market.
3. Administrator/Custodianffransfer Agent/Securities Lending AgentlFund

Accounting Agent

The Trust may appoint the Adviser or other service providers to aetas administrator ("Administrator"), custodian ("Ctistodian")~ transfer agent("Transfer Agent"), Fund Accounting Agent ("Fund Accounting Agent") and securities lending agent ("Securities Lending Agent") for the Trust. The identity ofthe Adviser, Sub-Adviser, Administrator, Custodian, Transfer Agent and Fund Accounting Agent will be disclosed in the Prospectus. Ifany·such persons are "affiliated" perSons within the me8ning ofSection 2(a)(3) ofthe 1940 Act with the Trust, the Adviser or the Distributor, such affiliation will also be disclosed and the performance oftheir duties and obligations Will be conducted within the provisions ofthe 1940 Act and the rules thereunder. . .
C. Shares
As described in subparts lD. through I.F. below, the Fund will issue and redeem its

Shares only in aggregations of50,000 Sbare~ or multiples thereof("Creation Units"). Shares

will not be individually redeemable; only·SIniies Combined into Creation Units will be

redeemable. The Trust intends that the initial'net asset value (''NAV") ofShares will be . . ' .

__SCHIFFHARDINup
Josephine Tao

Assistant Director

established at a level convenient for trading purposes.6 Purchasers ofCreation Units will be able to unbundle the Creation Units into the individual Shares comprising such Creation Unit. It is not expected that the Fund's Distributor will maintain a secondary market in individualShares. The Listing Exchange will designate one or more member firms to act as a "Lead Market Maker" responsible for maintaining depth and quality oftrading in the Shares. The "Lead 'Market Maker" has quote and execution obligations and the responsibility for keeping tight spreads in the Shares. The Shares will trade on the Listing Exchange in a manner similar to the shares ofthe PriorETFs that are listed on Area or another Market.7 Shares will be registered in book-entry fonn only; the Fund will not issue individual certificates for Shares. The Depository Trust Company ("DTC") will serve as securities depository for Shares and DTC or its nominee will be the record or registered owner of all outstanding Shares. Beneficial ownership ofShares will be shown on the records ofDTC or a broker-dealer that is a participant in DTC (a "DTC Participant"). Beneficial owners ofShares ("Beneficial Owners") will receive, at the Fund's expense, all ofthe statements, notices, and reports required under the 1940 Act and other applicable laws ("Required Materials"). The Trust understands that under existing industry practice, in the event the Trust requests any action ofBeneficial Owners ofShares, or a Beneficial Owner desires to take any action that DTC, as the record owner ofaU outStanding Shares, is entitled to take, DTC would authorize the DTC Participants to take such action and 'that the DTC Participants would authorize the indirect participants and Beneficial Owners acting through such DTC Participants to take such action and would otherwise act upon the instructions ofBeneficial Owners owning Shares through them. As describe4 above, (he Trust will recOgnize DTC or its nominee as the record owner ofShares.for all purposes. AccOrdingly, to exercise any rights ofa holder ofShares, each Beneficial Owner must rely upon the procedures of(I) DTC, (2) DTC partiCipants and (3) brokers, dealers, banks and trust companies that clear through or maintain a custodial relationship with a DTC Participant, 6 The Trust believes that a convenient trading~ge will be between $25 - $100 per Share and the Trust reserves the right to declare a share split, or a reverse share sPlit, ifthe trading price over time deviates signifiCantly from such price range. Each shareholder win have one vote per Share. 7 The Trust expectS that the trading of Shares on any other Market would be conducted in a similar manner. :.',. :

_t5CHIFFHARDINup
Josephine Tao

Assistant Director

Division ofTrading and Markets .

.Securities and Exchange Commission

September 2, 20 I0

either directly or indirectly, through which such Beneficial Owner holds its interest. Moreover, .·becauSe the Trust's records will reflect ownership ofShares by DTC only, the Trust will furnish .the Required Materials to the DTC Participants who, in tum, will be responsible for distributing them to the Beneficial Owners. This arrangement is identical to that ofall Prior ETFs. D. Purchasing Shares The Trust will offer, issue and sell Shares ofthe Fund in Creation Units through the Distributor on a continuous basis at the NAV per share next determ.iried afterreceiptofan order in proper form. The NAV of each Fund is expected to be determined as ofthe close ofthe regular trading session on the New York Stock Exchange (''NYSE'') (ordinarily 4:00 p.m. Eastern Time ("ET"», on each day that the NYSE is open for business (each such day a "Business Day"). The Trust will sell and redeem Creation Uirits ofeach Fund on every Business .Day and will not suspend the right ofredemption or postpone the date ofpayment or satisfaction upon redemption for more than seven days, other than (a) any period during which the NYSE is closed other than customary weekend and holiday closings, (b) any period during which trading on the NYSE is restricted, (c) any period·during which an emergency exists as a result ofwhich disposal by the Trust ofsecurities owned by it is not reasonably practicable or it is not reasonably practicable for the Trust to determine the value ofits net assets, and (d) for such other periods as the Commission has by order pennitted in connection with certain international funds and may by order permit for the protection ofholders ofShares. The Food will always have a fixed number ofShares in a Creation Unit as specified in the Prospectus for the Fund.8 As discussed above, individual Shares will be listed on the Listing Exchange (or another ;'Market) and traded in the secondary market in the same manner as other equity securities and the ~ts or shares (as the case may be) ofPrior ETFs currently listed and trading thereon. The price , :. ofShares trading in the secondary market wllLbe based on a current bid/offer market. No seCondary sales will be made to brokers ordea:lers at a concession by the Distributor or by the . Fund. Transactions involving the sale ofShares in the secondary market - which will be .,betWeen purchaSers and sellers and will not involve the Fund - will be SlJbject to customary .'brokerage commissions and charges~ This also is the method employed by the Prior ETFs. Like the Prior ETFs, the price.at which Shares trade will be disciplined by arbitrage opportunities

• Assuming a Creation Unit of 50,000 Shares and $25 per Share price for a Fund as of the first day of
  trading on the Listing Exchange, the Creation Unit value on such day would be $1,250,000.

-t SCHIFFHARDINup
Josephine Tao

Assistant Director

September 2, 20I0

Page lOof21

created by the ability to purchase or redeem Creation Units at NAV, which should ensure that Shares do not trade at a material premiwn or discount in relation to NAV. Redemptions ofShares ofthe Fund in Creation Units will be made by the Trustin a

• similar manner, but the process is reversed. Shares may only be directly purchased, or
  redeemed, by or through an entity which is an "Authorized Participant" ~., (i) a broker-dealer or other participant iIi the clearing process through the Continuous NetSettlement System ofthe National Securities Clearing Corporation ("NSCC"), a clearing agency that is registered with the SEC; or a DTC Participant, and (ii) which has executed an agreement with the Distributor with respect to creations and redemptions ofCreation Unit Aggregations). Authorized Participants may be, but are not required to be, members ofthe Primary Listing Market. Authorized. Participants are generally broker-dealers andare not compensated by the Trust or any Fund in connection with the issuance orredemption dfShares. . . E. Procedures Applicable To Purchases ofthe Fund

1. Deposits ofCash and/or Securities.
   To purchase Shares directly from the Fund, an AuthorizCd Participant must deposit with the Fund the required cash amount and/or designated securities ("Deposit Securities"; together with the required cash amount, the "Portfolio Deposit"). The Portfolio Deposit may consist entirely ofcash. Each Business Day, priQr to the opening oftrading on the Listing Exchange, the Adviser or Sub-Adviser will make the required Portfolio Deposit available through the NSCC.
2. Placement of Purchase Orders.
   .'. As mentioned above, all purchase orders for Shares in Creation Units ofthe Fund must be 'placed by or through an Authorized Participant A purchase order must be received by the . Distributor prior to the Fund's purchase cut-offtime, in order to receive that day's NAV per Share. All other procedures set forth in the Participant Agreement must be followed in order for an Authorized Participant to receive the NAVdetennined on that day. The Custodian shall cause any sulrcustodi~(s)·ofthe Fund to maintain an account into which the Authorized Participant :shall deliver, on behalfofitselfor the party on whose behalfit is acting, the Portfolio Deposit, with any appropriate adjustments as advised by the Trust.

-t SCHIFFHARDINlLP
Josephine Tao

Assistant Director

Page II of21

Purchases ofCreation Units ofShares ofthe Fund by an Authorized Participant generally will settle no later thail the third (3rd) Business Day following the transmittal date (generally expressed as "T+3,,).9 .
3. Transaction Fee on Purchases ofCreation Units.
The Trust may impose transaction fees ("Transaction Fees") in connection with the purchase ofCreation Units. The exact amount ofany such Transaction Fees for the Fund will be determined by the Trust. The purpose ofthis fee is to protect the continuing shareholders ofthe Trust against the possible dilutive transactional expenses including operational processing and brokerage.costS associated with establishing and liquidating portfolio positions in connection with the purchase ofCreation Units. ' The maximumTransaction Fee, and any variations or waivers thereof, will be fully disclosed in the current Prospectus. From time to time and for such periods as the Trust in its sole discretion may determine, the Transaction Fees for purchase or redemption ofCreation Units ofthe Fund may be increased, decreased or otherwise modified. Such changes and variations wilt be effected by an amendment or supplement to the then current Registration Statement for the Fund. Such Transaction Fees will be limited to amounts that will have been determined by the Adviser to be appropriate and will take into account transaction and operational processing costs associated with the recent purchases and sales ofthe securities held by the Trust. In all cases such Transaction Fees will be limited in accordance with requirements ofthe Coinmission applicable. to management investment companies offering redeemable securities. F. Procedures Applicable To Redemptions ofthe Fund
I. Redemption Proceeds.
The payment upon redemption for t4e Food will generally consist of cash and/or designated securities in an amount equal to the NAV ofa Creation Unit ("Redemption Securities"; together with the cash amount the "Redemption Payment"). The Redemption . Payment also may consist entirely ofa specified amount ofcash at the discretion ofthe Fund. 9 To the extent that the standard for the delivery and settlement of Deposit Securities is shortened from T+3 to T+2, T+I or even T, the time for the delivery and settlement of purchases or redemptions ofCreation Units ofShares ofthe Fund by an Authorized Participant may be similarly shortened.

~t SCHIFFHARDINup
Josephine Tao

Assistant Director

September 2, 20 I0

The Adviser or SulrAdviser will make the composition ofthe Redemption Payment available through the NSCC, DTC or the Distributor.

• 2. Placement ofRedemption Orders.
  Orders to redeem Shares in Creation iJnits ofthe Fund must be delivered by an Authorized Participant; investors other than Authorized Participants are responsible for making arrangements for a redemption request to be made through an Authorized Participant. An order to redeem Shares in Creation Unit(s) ofthe Fund is deemed received by the Trust on the transmittal date if: (i) such order is received by the Transfer Agent not later than the Fund's redemption cut-offtime on the transmittal date; (ii) such order is accompanied or followed by the requisite' number ofShares ofthe Fund specified in such order; and (iii) all other procedures set forth in the Participant Agreement are properly followed. Deliveries ofportfolio securities to redeeming Authorized Participants generally will be made within three Business Days.

3. Transaction Fee on Redemption ofCreation Units.
   The Trust may impose Transaction Fees in connection with the redemption ofCreation Units ofthe Fund. The exact amount ofany Transaction Fee will be determined by the Trust for the Fund. The purpose ofthis fee is to protect the continuing shareholders ofthe Trust against the possible dilutive transactional expenses including operational processing and brokerage costs associated with establishing and liquidating portfolio positions in connection with the redemption ofCreation Units.
   PART II •.
   j " . -. :
   . A. Disclosure Documents
   The primary disclosure documents with respect to the Shares will be the Prospectus for the Fund. As with all inv~entcompany securities, the purchase ofShares in Creation Units .-from any Fund will be accompanied or preceded by a Prospectus. With respect to disclosure in the Prospectus concerning the non-redeemability ofShares, .'the Trust arid the Fund will observe the following policies: (l) the term "mutual fund" will not be used except to compare and contrast the Trust or the Fund with conventional mutual funds; (2) the term "open-end management investment Company" will be used in the Prospectus only to the extent required by Form N-IA or other securities law requirements and this phrase will not be included on the prospectus cover page or summary; (3) the front cover page ofthe Prospectus

4_SCHIFFHAROINup

Josephine Tao

Assistant Director

and the prospectus summary will include a distinct paragraph or paragraphs setting forth the fact that Shares will be listed on a MaCket and will be individually non-redeemable; (4) the Prospectus will disclose that the owners ofShares may acquire those Shares from the Fund, and tender those Shares for redemption to the Fund, only in Creation Units; and (5) the Prospectus will clearly disclose that individual Shares prices may be below, above, or at the most recently calculated NAv. . The Prospectus will also indicate that the proposed method by which Shares will be purchased and traded may raise certain issues under applicable securities laws. Similar disclosure is made in the prospectuses forthe Prior ETFs currently trading on a Market As described above, Shares in Creation Units will be offered continuously to the public. Because new Shares may be created and issued on an 'ongoing basis, at any point during the life ofthe Fund, a "distribution," as such term is Used iIi the 1933 Act, may be occJIITing. Broker-dealers and other persons will be cautioned in the Prospectus that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distributionin a manner which could render them statUtory underwriters and subject them to the prospectus delivery and liability provisions ofthe 1933 Act. The Prospectus will also state that a determination ofwhether one is an underwriter must take into account all the facts and circumstances pertaining·to the activities ofthe broker-dealer or its client in the particular cases, and may provide examples ofactivities that could lead to categorization as an underwriter. The Prospectus will also state that dealers who are not "underwriters," but are participating in a distribution (as contrasted to ordinary secondary trading transactions), and thus dealing with Shares that are part of an ''unsold allotment" within the meaning ofSeetion 4(3Xc) ofthe 1933 Act, would be unable to take advantage ofthe prospectus-delivery exemption provided by
Section 4(3) ofthe 1933 Act 10 . . .
10 The Trust notes that prospectus delivery is not required in certain instances, Including purchases of . Shares by an investor who has previously been deUvered a prospectus (until such prospectus is supplemented or otherwise updated) andimsoUcited brokers' transacti9ns in Shares (pUrsuant to Section 4(4) ofthe 1933 Act). Also, firms that do incur aprospectus-delivery obligation wIth respect to Shares win be reminded th8t under SecUrities Act Rule 153, a prospectus-dClivery obligation under SeCtion 5(bX2) of the Securities Act owe(Ho a member of the Market in connection with a sale on such Market, is satisfied by the fact that the Prospectus are available at such Market upon request The Prospectus alsO will note that the prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on the Market .

4tSCHIFFHARDINup

Josephine Tao
Assistant Director
Division ofTra<ling and Markets
The Distributor will coordinate the production and distribution ofthe Prospectus to

broker-dealers. It will be the responsibility of the broker-dealers to ensure that a Prospectus is

provided to each secondary market purchaser ofShares.

B. Website
As discussed more fully in Part lV.B. below, the portfolio holdings of the Fund will be disclosed on the public website of the Primary Listing Market and/or the Trust. 1I The Trust's agent will calculate the Intta-Daymdicative Value or "IIV" (discussed below) for the Fund. The IlV will be provided by the Trust's agent to the Listing Exchange and disseminated by the Listing Exchange through the facilities oBhe Consolidated Tape Association.
PART III
Comparison ofthe Funds To The Prior ETFs That Have Sought Similar Commission

Action And Received Similar Relief.

The Funds will operate in a manner substantially identical to the operation ofthe Prior

ETFs. The Relief requested in this Letter is s~bstantially identical to the relief granted by the

Commission to the Prior ETFs. .

PARTlY
A. . Availabilityof Information Regardirig the Fund and Shares
I. General.
The daily NAV for the Fund will be calculated by the Fund's accounting agent and disseminated each Business Day by the Fund The NAV ofthe Fund generally will be calculated each Business Day as ofthe close ofthe NYSE and posted on the Fund's website shortly thereafter. It is the policy ofthe Trust to make the NAVofeach ETFavailable to all market participants at the same time. II· The Trust will comply with its obligations, imposed by recent amendments to Form N-IA, to disclose in its policies and procedures with respect to the disclosure ofits portfolio securities and to state in its Prospectus that a deScription ofeach Fund's pOlicies and procedures is amiable in the SAl. See Release No. IC-26418.

-tSCHIFFHARDINup
Josephine Tao

Assistant Director

.Division ofTrading and Markets

September 2, 20 to

2. Information Provided to Authorized Participants.
   All Authorized Participants may access the information described below. Applicants note that Authorized Participants that are I!0t also NSCC members may have to either join NSCC . or obtain the portfolio composition file ("PCF") from a third-party data vendor.
3. Dissemination ofInfonnation about Creation and Redemption Baskets.
   As discussed above, the Adviser or Sub-Adviser will make available through NSCC, DTC or the Distributor on each Business Day, prior to the opening oftrading on Area, the Portfolio Deposit per outstanding Share ofthe Fund. A list ofthe names and amount of each security constituting the Redemption Securities will also be made available each Business Day. . B. Dissemination ofInformation About the Fund's Portfolio Securities The prices ofthe Fund's portfolio securities and other investments ("Portfolio Securities") and the exchange rates ofthe currencies in which the Fund invests are readily available from, as applicable, automated quotation systems, public sources, such as newspapers and other publications, and from a variety ofon-line information services, such as Bloomberg or Reuters, other pricing services and major broker-dealer firms that make markets in such securities. .In addition, prior to the opening ofthe NYSE each Business Day, the Fund will disclose on the Fund's website ("Website") the identities arid quantities ofthe money market securities and other assetS held by the Fund (Le., the Portfolio Securities) that will fonn the basis for the

• calculation ofNAVat the end Qf such Bl,lSiness Day. The Website will be publicly accessible at
  no charge. This information will form the ~is for such Fund's NAV calculation as of4:00pm :ET on that Business Day. ,. . C. Dissemination ofInformation about Funds and Their Shares
• In order to provide current Share pricing information for each Fund for use by investors,
  'lJrofeSsionals and persons wishing to create or redeem Shares, the Listing Exchange. will disseminate: (i) continuously throughout. the trading day, through the facilities of the Consolidated tape, the market value of a·Share, and (ii) every 15 seconds throughout the trading . "day, separately from the consolidated tape, a calculation of the flY of a Share. 12 Comparing 12 The IN ofthe Fund's Shares is calculated by.dividing the value ofthe Deposit Securities by the number ofShares in a Creation Unit lbroughout the U:S. trading day at IS-second intervals, the vendor will recalculate the .. nv ofthe Fund's Shares to reflect changes in market values.

_tSCHIFFHARDINup
Josephine Tao

Assistant Director

Securities and Exchange Conunission

September 2,2010

these two figures allows an investor to determine whether, and to what extent, Shares are selling at a premium or a discount to IIV. The IIV is calculated and provided to the Listing Exchange on a daily basis by a third party calculation agent not affiliated with the Fund. As with other Market listed stocks, Shares' closing prices, and certain other daily trading information, such as market prices and volume ofShares, will be broadly available on a real time basis throughout the trading day. The Trust expects that the previous day's closing price and volume information will be published daily in the financial.sections ofmany newspapers. In addition, the Trust expects, given the past history of Prior ETFs, that Shares will be followed by stock market and mutual fund professionals well as investment advisers who will offer their analysis ofwhy investors should'purchase, hbld, sell or avoid Shares. Market listing ofShares should help ensure that there is a substantial amount ofraw data available, and that such data is packaged, analyzed and widely disseminated to the investing public. Also, the Listing Exchange intends to disseminate a variety ofdata with respect to Shares on a daily basis by means ofCTA and CQ High·Speed Lines including: information as ofthe previous day's close with respect to NAY and the number ofShares outstanding. The Trust has been advised that similar information will be provided in connection with Shares of each Fund primarily listed on a Market other than the Listing Exchange. The Website will also contain the following information on a per Share basis, for each Fund: (i) the prior business day's closing NAV and closing market price (based on the mid-point ofthe bid-asked spread at the time the Fund's NAY is calculated or the close ofETF trading on the Listing Exchange ("Bid-Asked Price"», and a calculation ofthe premium or discount ofthe .' Bid-Asked Price in relation to the c10sfug NAV; and (2) data for a period covering at least the four previous calendar quarters (or life ofa Fund, ifshorter) indicating how frequently each . Fund's Shares traded at a premiUm or discount to NAV based on.the daily Bid-Asked Price and. closing NAV, and the magnitude ofsuch premiums and discoUnts.. The Website will also display the ProspectuS, .and additional quantitative information that is update<;l on a daily basis. PARTY !:i:· A.' Requests for Relief- Introduction The Trust, on behalfofitself: the Listing Exchange, other Markets, the Distributor,

Authorized Participants and persons or entities engaging in transactions in the Shares, requests

that the Commission grant exemptive relief from Exchange Act Rule IOb-I7 and and pro~ide

-tSCtilFFHARDINup
Josephine Tao

Assistant Director

interpretive reliefunder Rules 101 and 102 ofRegulation M. As noted above, this requested relief is substantially similar to relief gnmted to the Prior ETFs currently trading on a Market and to the other series ofthe Trust. The Trust represents that the Fund's arbitrage mechanism will be facilitated by the

transparency ofthe Fund's portfolio and the availability ofthe IN, the liquidity ofPortfolio

.Securities, and the ability to access such Portfolio Securities, as well as arbitrageurs ability to create workable hedges. Further, the Fund will invest solely in liquid Portfolio Securities. As discussed above, there will be disclosure on each business day ofthe Fund's Portfolio Securitie$ and the lIV will be disseminated every 15 seconds throughout the trading session each business day. The Fund will invest in Portfolio Securities with. liquidity levels that will facilitate an effective and effiCient arbitrage mechanism and the ability to create workable hedges. For these reasons, we expect arbitrageurs to be able to take advantage ofprice variations between the Fund's market price and NAV. Thus, the Trust expects a close alignment between the market price of Fund shares and the NAV ofthe Fund.

1. Rule IOb-l7.
   Rule 1Ob-17 requires an issuer ofa class of publicly traded securities to give notice of certain specified actions (e.g., dividends, stock splits, rights offerings) relating to such class of securities in accordance with Rule 1Ob-17(b). Paragraph (c) ofthe Rule, however, states that the Rule shall not apply to redeemable securities issued by open-end investment companies and unit investment trusts registered under the 1940 Act. Except for the fact that redemption is subject to the minimum condition oftendering 50,000 Shares, the Trust is intended to function like any other open-endJund continuously offering its shares. It is. in recognition ofthe foregoing that the ' Division ofInvestment Managementissued an order permitting the Trust to issue shares with limited redeemabilitY while still treating the Trust like any other open-end investment company. In addition, compliance with Rule IOb-I7 would be impractical in light ofthe nature ofthe Fund. This is because it is not possible for the Trust to accuratelyproject ten days madvance what dividend, ifany, would be paid on a particular record <late. Therefore,the exemption under paragraph (c) ofRule.IOb-I7, which covers· open-end investment companies with fully redeemable shares, should be applicable to the Trust. .
2. RUle 101 ofRegulation M.
   The Trust respectfiiIly requests that the Conlntission grant interpretiverelieffrom Rule . 101, as discussed below, to permit Persons participating in a distribution ofShares ofthe ·Fund to bid for or purchase, redeem or engage in other secondary market transactions in such Shares. ;.

~tSCHIFFHARDINup
Josephirie Tao

Assistant Director

Securities and Exchange Conunission

Generally, Rule 101 ofRegulation M is an anti-manipulation regulation that, subject to . certain exemptions, prohibits any "distribution participant" and "its affiliated purchasers" from bidding for, purchasing from, or attempting to induce any person to bid for or purchase, any security which is the subject ofa distribution until after the applicable restricted period, except as specifically permitted in Regulation M. The provisions ofRule 101 apply to underwriters and prospective underwriters, brokers, dealers, and other persons who have agreed to participate or are participating in such distribution. The Trust understands that while broker-dealers that: (i) tender Portfolio Deposits to the . Trust through th~ Distributor in return for Shares ofthe Fund in Creation Units; or (ii) redeem Shares ofthe Fund in Creation Units for receipt ofRedemption Securities and cash (or cash only) held by the Fund generally will not be part ofa syndicate or selling group, and while no broker￾dealer will receive fees, commissions or·.otherremuneration from the Trust or the Distributor for the sale ofShares ofthe Fund in Creation Units, under certain circumstances such broker-dealers could be deemed to be "underwriters" or "distribution participants" as such tenns are defined in Rule IOO(b). Paragraph (c)(4) ofRule 101 exempts from its application, inter alia, redeemable securities issued by an. open-end management investment company (as such terms are used in the 1940 Act). The Trust is registered as.an open-end management investment company under the 1940 Act. However, as discussed above, individual Shares are not redeemable except in Creation Units. Due to the redeemability ofthe Shares in Creation Units, there should be little disparity between the Shares' market price and their net asset value per Shares. Accordingly, the .rationale for exempting redeemable Securiti.~ ~f open-end management investment companies from the application ofRule 101 is equally ~licable to the Shares. AlthQugh redemption is . subject to the Condition oftendering the appropriate number ofShares ofCreation Units, the Trust otherwise will continue to function as an open-end fund continuously offering its Shares. It is in recognition ofthe special nature ofsuch offerings that open-end management investment

• company and unit investment trust seCurities are exempted under.paragraph (cX4). Without such
  an exemption, they could not operate as intended. In view ~f the foregoing, the Trust requests that the Commission confirm that as a result ofregistration ofthe TruSt as an open-end management investment company and the redeemable nature ofthe Shares in Creation Units, transactions in the Shares would be exempted from Rule 101 on the basis ofthe exception contained in (c)(4) ofsuch Rule. The purpose ofRule 101 is to prevent persons from conditioning the market to facilitate a distribution. Creation Units ofShares may be created and redeemed, in kind (or in cash in

Josephine Tao

Assistant Director

September2, 20 I0

certain cases) at net asset value, on any Business Day. Holders ofShares also have the benefit of intra-<iay secondary market liquidity by virtue oftheir Market listing. Thus, the secondary market price ofShares should not vary substantially from the net asset value ofsuch Shares. Because ofthe redeemability ofShares in Creation Units, coupled with the open-end nature of the Trust, any significant disparity between the market price ofthe Shares and their net asset value should be eliminated by arbitrage activity. Because the net asset value ofShares is largely based on the market value ofthe relevantFund holdings, transactions involving Shares (creations from and redemptions with the Trust, as well as purchases and sales in the secondary market) will not affect net asset value. Similarly, such transactions should not have a significant effect on the market price ofShares. The Trust requests that the Commission clarify that the tender ofthe Shares to the Fund

for redemption and the receipt ofRedemption Securities upon redemption does not constitute a

bid for or purchase of any ofsuch securities, or an "attempt to induce any person to bid for or

purchase a covered security, during the applicable restricted period" for the purposes ofRule

101. Redemption entails no separate bid for any ofthe Redemption Securities. As described
     above, following notice ofredemption, a Fund will deliver the specified Redemption Securities after the redemption request is received in proper form, except in those cases where redemption proceeds are paid entirely in cash. Absent unusual circumstances, the Trust will not purchase Redemption Securities in the secondary market to fulfill a redemption request. Therefore, redemptions ofShares cannot be expeCted to affect the market price ofthe Redemption Securities. As indicated above, the Distributor will not engage in any secondary market transactions in Shares, either for its own accountor for investors. In view ofthe lack of1lllY speci~ fin8ncial ince~tive to create Creation Units ofShareS, combined with a predictable lack ofany meaningful potential for the issuance and. the secondary market trading ofShares to affect significantly Shares pricing, application ofRule 101.to a broker-dealer or other person who may be participating in a distribution ofShares or securities . held by the Fund is unnecessary and inappropriate, and could unnecessarily hinder broker￾dealers or other persons in their creatiQn and·Ndemption activities, in their day-to-dily ordinary business ofbuying and selling Shares and th~~;underminethe potential beneficial market effects ofShares trading discussed throughout this Letter. Rule 102 ofRegulation M. . The Trust respectfully requests that the Commission confirm that, as a result of registration ofthe Tnist as an open-end management investment company and the redeemable 3

-tSCHIFFHARDINup
Josephine Tao

Assistant Director

September 2, 20 I0 .

nature ofthe Shares in Creation Units, for the reasons previously stated under the request for relief under Rule 10I(c)(4), transactions in Shares would be exempted from Rule 102 on .the basis ofthe exception contained in paragraph (d)(4) ofsuch Rule. Application ofRule 102 in this context would not further the anti-manipulative purposes ofthe Rule. Alternatively, the Trust requests that the Commission grant an exemption under paragraph (e) ofRule 102 to such effect. Application ofRule 102 in this context would not further the anti-manipulative purpose of this rule. The purpose ofRule 102 is to prevent persons from manipulating the price ofa security during a distribution and to protect the integrity ofthe offering process by prohibiting activities that could artificially influence the market for that particular security. For the reasons described in connection with the requested Rule 101 relief, redemption transactions and secondary market transactions in the Shares are not viable means to manipulate the price ofa portfolio security held by the Fund during a distribution ofsuch security. The Trust will redeem the Creation Units ofShares at the NAV ofthe Shares. Although Shares are traded on the secondary market, Shares may only be redeemed in Creation Units. Thus, the Trust believes that the redemption by the Trust ofthe Shares ofthe Funds at NAVin consideration principally for Portfolio Securities held by a Fund does not involve the abuses that Rule 102 was intended to prevent.
PART VI
A.Conclusion
Based on the foregoing, the Trust respectfully requestS that the Commission and'the Division ofTrading and Markets grant the reliefrequested herein. The forms ofreliefrequested ' are virtually identical to those actions which,the Commission and the Division ofTrading and Markets have taken in similar circumstances.

~tSCHIFFHARDINup

Josephine Tao

Assistant Director

Thank you for your consideration ofthis request. Should you have any questions or require additional information, please do not hesitate to call the undersigned at (202) 778-6422. Very truly yours, ~~Jack P. Drogin cc: Bradley Gude Richard F. Morris DCIlI0120816.2