[Federal Register: July 21, 2008 (Volume 73, Number 140)]
[Notices]
[Page 42391-42396]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jy08-102]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58162; File No. SR-NYSEArca-2008-73]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to Trade
14 Funds of the Commodities and Currency Trust Pursuant to Unlisted
Trading Privileges
July 15, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 11, 2008, NYSE Arca, Inc. (``NYSE Arca'' or
[[Page 42392]]
the ``Exchange''), through its wholly owned subsidiary NYSE Arca
Equities, Inc. (``NYSE Arca Equities'' or the ``Corporation''), filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been substantially prepared by the Exchange. The Exchange filed
the proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\
and Rule 19b-4(f)(6) \4\ thereunder, which renders it effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to trade pursuant to unlisted trading
privileges (``UTP'') shares (``Shares'') of fourteen (14) funds
(``Funds'') of the Commodities and Currency Trust (``Trust'') based on
several currencies, commodities and commodities indexes.
The text of the proposed rule change is available at the Exchange's
principal office, the Commission's Public Reference Room, and http://
www.nyse.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
Exchange has prepared summaries set forth in Sections A, B, and C below
of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to revise Commentary .02 to NYSE Arca
Equities Rule 8.200 to permit the listing and trading, including
trading pursuant to UTP, of trust issued receipts (``TIRs'') that hold
investments in any combination of cash, securities, options on
securities and indices, futures contracts, options on futures
contracts, forward contracts, equity caps, collars and floors, and swap
agreements (the ``Financial Instruments'').\5\ This proposal would
permit the Exchange to trade the Shares pursuant to UTP under revised
Commentary .02 to Rule 8.200. The American Stock Exchange LLC
(``Amex'') has filed a proposed rule change to list the Shares.\6\
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\5\ Permissible securities in connection with Financial
Instruments would not include foreign equity securities.
\6\ See Securities Exchange Act Release No. 57932 (June 5,
2008), 73 FR 33467 (June 12, 2008) (SR-Amex-2008-39) (``Amex
Proposal''). The Commission notes that, in a separate action today,
it is approving the Amex Proposal. See Securities Exchange Act
Release No. 58161 (July 15, 2008).
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The Shares represent common units of fractional undivided
beneficial interest in, and ownership of, each Fund. Each Fund will
invest the proceeds of its offering of Shares in various Financial
Instruments that will provide exposure to the Fund's underlying
currency, commodity or commodity index. In addition, the Funds will
also maintain cash positions in cash or money market instruments for
the purpose of collateralizing such positions taken in the Financial
Instruments.
Shares of seven (7) of the Funds of the Trust will be designated as
Ultra ProShares while the other seven (7) shares of the Trust will be
designated as UltraShort ProShares. Each of the Funds will have a
distinct investment objective.\7\ The Funds will attempt, on a daily
basis, to achieve their investment objective by corresponding to a
specified multiple or an inverse multiple of the performance of a
particular benchmark commodities index, commodity or currency (each an
``Underlying Benchmark'' and collectively, the ``Underlying
Benchmarks'') as described in the Amex Proposal.
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\7\ The Funds are the Ultra DJ-AIG Commodity ProShares,
UltraShort DJ-AIG Commodity ProShares, Ultra DJ-AIG Agriculture
ProShares, UltraShort DJ-AIG Agriculture ProShares, Ultra DJ-AIG
Crude Oil ProShares, UltraShort DJAIG Crude Oil ProShares, Ultra
Gold ProShares, UltraShort Gold ProShares, Ultra Silver ProShares,
UltraShort Silver ProShares, Ultra Euro ProShares, UltraShort Euro
ProShares, Ultra Yen ProShares and UltraShort Yen ProShares.
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Six (6) Funds will be based on the following benchmark commodities
indexes: (i) The Dow Jones-AIG Commodity IndexSM; (ii) the Dow Jones-
AIG Crude Oil Sub-IndexSM; and (iii) the Dow Jones-AIG Agriculture Sub-
IndexSM (each, an ``Underlying Index'' and collectively, the
``Underlying Indexes''). Four (4) Funds will be based on the following
commodities: (i) Gold; and (ii) silver (each, an ``Underlying
Commodity'' and collectively, the ``Underlying Commodities''). Four (4)
Funds will be based on the following benchmark currencies versus the
U.S. dollar: (1) The Euro; and (2) the Japanese Yen (each, an
``Underlying Currency'' and collectively, the ``Underlying
Currencies''). The Exchange proposes to trade pursuant to UTP shares of
the Funds that seek daily investment results, before fees and expenses,
that correspond to twice (200%) the daily performance of the Underlying
Benchmark (the ``Ultra Funds''). If a Fund is successful in meeting its
investment objective, the net asset value (``NAV'') \8\ of the shares
of each Fund is expected to gain on a percentage basis, approximately
twice as much as each Fund's respective Underlying Benchmark when the
price of the Underlying Benchmark increases on a given day, and should
lose approximately twice as much when such price declines on a given
day, before fees and expenses.
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\8\ ``Net asset value'' means the total assets of a Fund
including, but not limited to, all cash and cash equivalents or
other debt securities less total liabilities of such Fund, each
determined on the basis of generally accepted accounting principles
in the United States, consistently applied under the accrual method
of accounting. In particular, net asset value includes any
unrealized profit or loss on open swaps and futures contracts, and
any other credit or debit accruing to a Fund but unpaid or not
received by a Fund.
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The Exchange also proposes to trade pursuant to UTP shares of the
Funds that seek daily investment results, before fees and expenses that
correspond to twice the inverse (-200%) of the daily performance of the
Underlying Benchmark (the ``UltraShort Funds''). If each Fund is
successful in meeting its objective, the NAV of the shares of each Fund
is expected to increase approximately twice as much, on a percentage
basis, as the respective Underlying Benchmark loses on a given day, or
should decrease approximately twice as much as the respective
Underlying Benchmark gains when the Underlying Benchmark rises on a
given day, before fees and expenses.
The Exchange notes that the Commission has permitted the listing
and trading on the Exchange and other national securities exchanges of
securities linked to the performance of underlying currencies and
commodities.\9\ The Commission also has
[[Page 42393]]
approved for trading on the Exchange on a UTP basis under NYSE Arca
Equities Rule 5.2(j)(3) UltraFunds, Short Funds and UltraShort Funds of
the ProShares Trust.\10\
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\9\ The Commission has previously approved issues of Commodity-
Based Trust Shares, Currency Trust Shares and Commodity Index Trust
Shares, which have certain characteristics similar to the proposed
TIRs, for exchange listing and trading. See, e.g., Securities
Exchange Act Release No. 50603 (October 28, 2004), 69 FR 64614
(November 5, 2004) (SR-NYSE-2004-22) (order approving listing on the
New York Stock Exchange (``NYSE'') of streetTRACKS Gold Trust);
Securities Exchange Act Release No. 51058 (January 19, 2005), 70 FR
3749 (January 26, 2005) (SR-Amex-2004-38) (order approving listing
on the American Stock Exchange (``Amex'') of the iShares COMEX Gold
Trust); Securities Exchange Act Release No. 53521 (March 20, 2006),
71 FR 14967 (March 24, 2006) (SR-Amex-2005-72) (order approving
listing on Amex of the iShares Silver Trust); Securities Exchange
Act Release No. 56041 (July 11, 2007), 72 FR 39114 (July 17, 2007)
(SR-NYSEArca-2007-43) (order granting accelerated approval to list
on NYSE Arca the iShares COMEX Gold Trust); Securities Exchange Act
Release No. 52843 (November 28, 2005), 70 FR 72486 (December 5,
2005) (SR-NYSE 2005-65) (order granting accelerated approval for
NYSE to list and trade shares of the CurrencyShares Euro Trust);
Securities Exchange Act Release No. 54020 (June 20, 2006), 71 FR
36579 (June 27, 2006) (SR-NYSE-2006-35) (order granting accelerated
approval for NYSE to list and trade shares of the CurrencyShares
Australian Dollar Trust, CurrencyShares British Pound Sterling
Trust, CurrencyShares Canadian Dollar Trust, CurrencyShares Mexican
Peso Trust, CurrencyShares Swedish Krona Trust and CurrencyShares
Swiss Franc Trust); Securities Exchange Act Release No. 55268
(February 9, 2007), 72 FR 7793 (February 20, 2007) (SR-NYSE-2007-03)
(order granting accelerated approval for NYSE to list and trade
shares of the CurrencyShares Japanese Yen Trust); Securities
Exchange Act Release No. 56131 (July 25, 2007), 72 FR 42212 (August
1, 2007) (SR-NYSEArca-2007-57) (order granting accelerated approval
for listing on NYSE Arca of CurrencyShares Trusts); Securities
Exchange Act Release No. 54013 (June 16, 2006), 71 FR 36372 (June
26, 2006) (SR-NYSE-2006-17) (approving listing on the NYSE of the
iShares GSCI Trust); Securities Exchange Act Release No. 55585
(April 5, 2007), 72 FR 18500 (April 12, 2007) (SR-NYSE-2006-75)
(approving for NYSE listing the iShares GS Commodity Light Energy
Indexed Trust; iShares GS Commodity Industrial Metals Indexed Trust;
iShares GS Commodity Livestock Indexed Trust and iShares GS
Commodity Non-Energy Indexed Trust); Securities Exchange Act Release
No. 56932 (December 7, 2007), 72 FR 71178 (December 14, 2007) (SR-
NYSEArca-2007-112) (order granting accelerated approval to list
iShares S&P GSCI Commodity-Indexed Trust); Securities Exchange Act
Release No. 57456 (March 7, 2008), 73 FR 13599 (March 13, 2008) (SR-
NYSEArca-2007-91) (order granting accelerated approval for NYSE Arca
listing the iShares S&P GSCI Energy Commodity-Indexed Trust; iShares
S&P GSCI Natural Gas Commodity-Indexed Trust; iShares S&P GSCI
Industrial Metals Commodity-Indexed Trust; iShares S&P GSCI Light
Energy Commodity-Indexed Trust; iShares S&P GSCI Livestock
Commodity-Indexed Trust; and iShares S&P GSCI Non-Energy Commodity-
Indexed Trust).
\10\ See Securities Exchange Act Release No. 55125 (January 18,
2007), 72 FR 3462 (January 25, 2007) (SR-NYSEArca-2006-87);
Securities Exchange Act Release No. 57017 (December 20, 2007), 72 FR
73955 (December 28, 2007) (SR-NYSEArca-2007-108).
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Proposed Revision to Commentary .02 to Rule 8.200
Shares of each Fund will be generally subject to the rules that
apply to TIRs. The Exchange also proposes to revise Commentary .02 to
Rule 8.200 in order to permit the listing and trading of TIRs directly
holding Financial Instruments. Current Commentary .02 to Rule 8.200
permits the Exchange to list and trade TIRs, including trading on a UTP
basis, where the underlying trust, partnership, commodity pool or other
similar entity holds ``Investment Shares.'' \11\ The term ``Investment
Shares'' is defined in Commentary .02(b)(1) as a security (a) that is
issued by a trust, partnership, commodity pool or other similar entity
that invests in any combination of futures contracts, options on
futures contracts, forward contracts, commodities, swaps or high credit
quality short-term fixed income securities or other securities; and (b)
issued and redeemed daily at net asset value in amounts correlating to
the number of receipts created and redeemed in a specified aggregate
minimum number. As a result, a TIR that is listed or UTP-traded
pursuant to current Commentary .02 to Rule 8.200 is required to be in
the form of a ``master-feeder'' structure, whereby the listed or UTP-
traded security holds or invests in the security of the fund that is
investing in the Financial Instruments. This proposal would provide an
alternative for issuers so that a security may be listed and traded,
including UTP-traded, on the Exchange that directly invests in or holds
Financial Instruments rather than through an additional security of a
fund.
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\11\ See Securities Exchange Act Release No. 53736 (April 27,
2006), 71 FR 26582 (May 5, 2006 (SR-PCX-2006-22).
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The proposal will expand the application of Commentary .02 to Rule
8.200 to both Investment Shares and Financial Instruments. Accordingly,
new Commentary .02(b)(4) to Rule 8.200 would be added to define
``Financial Instrument'' as any combination of cash, securities,
options on securities and indices, futures contracts, options on
futures contracts, forward contracts, equity caps, collars and floors
and swap agreements. Throughout Commentary .02 to Rule 8.200, the term
``Financial Instrument'' will be added to ``Investment Shares''
indicating that TIRs directly holding Financial Instruments may be
listed and traded, including UTP-traded, on the Exchange.
Additional information regarding the Underlying Indexes, the
Commodities Benchmarks, the Currencies Benchmarks, the structure and
investment objective of the Funds, the portfolio investment
methodology, investment techniques, creation and redemption of Shares
is provided in the Amex Proposal.
Availability of Information Regarding the Shares
According to the Amex Proposal, the Web sites for the Funds and/or
the Amex, which are publicly accessible at no charge, will contain the
following information: (a) The current NAV per Share daily and the
prior business day's NAV per Share and the reported closing price; (b)
the mid-point of the bid-ask price in relation to the NAV per Share as
of the time it is calculated (the ``Bid-Asked Price''); (c) calculation
of the premium or discount of such price against the NAV per Share; (d)
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 (4) previous calendar quarters;
(e) the Prospectus; and (f) other applicable quantitative information.
The NAV per Share will be calculated and disseminated daily. The
Amex will disseminate for the Funds on a daily basis by means of CTA/CQ
High Speed Lines information with respect to the corresponding
``Indicative Value'' (as discussed below), recent NAV per Share and
Shares outstanding. The Amex will also make available on its Web site
(http://www.amex.com) daily trading volume of the Shares, closing
prices of the Shares, and the NAV per Share. The closing price and
settlement prices of the futures contracts held by the Funds are also
readily available from the Chicago Mercantile Exchange (``CME''), New
York Mercantile Exchange (``NYMEX''), Chicago Board of Trade
(``CBOT''), Intercontinental Exchange/New York Board of Trade (``ICE/
NYBOT''), London Metal Exchange (``LME''), automated quotation systems,
published or other public sources, or on-line information services such
as Bloomberg or Reuters. Real-time dissemination of spot pricing for
gold, silver, euro and Japanese yen is available on a 24-hour basis
worldwide from various major market data vendors.
Portfolio Disclosure
Each Fund's total portfolio composition will be disclosed on the
Web site of the Trust (http://www.proshares.com) or another relevant
Web site as determined by the Trust and/or the Amex. The Trust will
provide Web site disclosure of portfolio holdings daily and will
include, as applicable, the names and number of Financial Instruments
and characteristics of such instruments, cash equivalents and amount of
cash held in the portfolio of each Fund. This public Web site
disclosure of the portfolio composition of each Fund will occur at the
same time as the disclosure by the Managing Owner of the portfolio
composition to Authorized Participants, so that all market participants
are provided portfolio composition
[[Page 42394]]
information at the same time. Therefore, the same portfolio information
will be provided on the public Web site as well as in electronic files
provided to Authorized Participants. Accordingly, each investor will
have access to the current portfolio composition of each Fund through
the Trust's Web site, at http://www.proshares.com, and/or at the Amex's
Web site.
Availability of Information About the Underlying Benchmarks
The daily closing index value and the percentage change in the
daily closing index value for each Underlying Index will be publicly
available on various Web sites, e.g., http://www.ino.com and http://
www.finance.yahoo.com. Data regarding each Underlying Index is also
available from the respective index provider to subscribers. In
addition, data is also available regarding the underlying component
commodities of each Underlying Index from those futures exchanges that
list and trade futures contracts on those commodities. Several
independent data vendors also package and disseminate index data in
various value-added formats (including vendors displaying both index
constituents and index levels and vendors displaying index levels
only).
Data regarding spot pricing of the Underlying Commodities (gold and
silver) is publicly available on a 24-hour basis from various financial
information service providers, such as Reuters and Bloomberg. In
addition, the daily London fix for gold and silver is also disseminated
by various market data vendors and is available from the London Bullion
Market Association (``LBMA'') Web site at http://www.lbma.org.uk.
Data regarding futures contracts and options on futures contracts
in connection with the Underlying Commodities is also available from
the NYMEX at http://nymex.com. There is considerable public price and
data information regarding the Underlying Currencies (euro and Japanese
yen). Spot pricing related to foreign exchange is available to
investors and market professionals on a 24-hour basis. A variety of
public Web sites and professional and subscription services provide
market and price information regarding the euro and the yen. Current
spot prices are also generally available from foreign exchange dealers.
The value of each Underlying Benchmark will be updated intra-day on
a real time basis as its components change in price.
Dissemination of Net Asset Value and Indicative Value
The Administrator calculates and disseminates, once each trading
day, the NAV per Share to market participants. The Amex Proposal
represents that the Amex will obtain a representation (prior to listing
of the Funds) from the Trust that the NAV per Share will be calculated
daily and made available to all market participants at the same time.
In addition, the Administrator causes to be made available on a daily
basis the corresponding Cash Deposit Amounts to be deposited in
connection with the issuance of the respective Shares.
In order to provide updated information relating to the Fund for
use by investors, professionals and persons wishing to create or redeem
the Shares, the Amex will disseminate an updated Indicative Value. The
Indicative Value will be disseminated on a per Share basis at least
every 15 seconds during regular Amex trading hours of 9:30 a.m. to 4
p.m. ET. The Indicative Value will be calculated based on the cash
required for creations and redemptions for a Fund adjusted to reflect
the price changes of the Financial Instruments.
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Trading in the Shares
on the Exchange will occur in accordance with NYSE Arca Equities Rule
7.34(a). The Exchange has appropriate rules to facilitate transactions
in the Shares during this time. The minimum trading increment for
Shares on the Exchange will be $0.01.
Further, NYSE Arca Equities Rule 8.200, Commentary .02 sets forth
certain restrictions on equity trading permit holders (``ETP Holders'')
acting as registered Market Makers in Trust Issued Receipts to
facilitate surveillance. Rule 8.200, Commentary .02(e)(3) requires that
the ETP Holder acting as a registered Market Maker in the Shares
provide the Exchange with information relating to its trading in the
applicable physical asset or commodity, related futures or options on
futures, or any other related derivatives as may be requested. NYSE
Arca Equities Rule 8.200, Commentary .02(e)(4) prohibits the ETP Holder
acting as a registered Market Maker in the Shares from using any
material nonpublic information received from any person associated with
an ETP Holder or employee of such person regarding trading by such
person or employee in the applicable underlying physical asset or
commodity, related futures or options on futures, or any other related
derivative (including the TIRs). In addition, NYSE Arca Equities Rule
8.200, Commentary .02(e)(1) prohibits the ETP Holder acting as a
registered Market Maker in the Shares from being affiliated with a
market maker in the applicable physical asset or commodity, related
futures or any other related derivatives unless adequate information
barriers are in place, as provided in NYSE Arca Equities Rule 7.26.
As a general matter, the Exchange has regulatory jurisdiction over
its ETP Holders and any person or entity controlling an ETP Holder. The
Exchange also has regulatory jurisdiction over a subsidiary or
affiliate of an ETP Holder that is in the securities business. A
subsidiary or affiliate of an ETP Holder that does business only in
commodities or futures contracts would not be subject to Exchange
jurisdiction, but the Exchange could obtain certain information
regarding the activities of such subsidiary or affiliate through
surveillance sharing agreements with regulatory organizations of which
such subsidiary or affiliate is a member.
Surveillance
The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products, including TIRs, to
monitor trading in the Shares. The Exchange represents that these
procedures are adequate to properly monitor Exchange trading of the
Shares in all trading sessions and to deter and detect violations of
Exchange rules and applicable federal securities laws.
The Exchange's current trading surveillances focus on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations. The Exchange is able to
obtain information regarding trading in the Shares, and certain of the
Financial Instruments held by TIRs including securities, options on
securities and indices, commodities, futures contracts, and options on
futures contracts, through ETP Holders, in connection with such ETP
Holders' proprietary or customer trades which they effect on any
relevant market. The Exchange currently has in place comprehensive
surveillance sharing agreements with ICE, LME and NYMEX for the purpose
of providing information in connection with trading in or related to
futures contracts traded on their
[[Page 42395]]
respective exchanges comprising the Underlying Benchmarks. The Exchange
also notes that CBOT, CME and NYBOT are members of the Intermarket
Surveillance Group (``ISG'').
Information Bulletin
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, including risks inherent
with trading the Shares during the Opening and Late Trading Sessions
when the updated Indicative Value is not calculated and disseminated
and suitability recommendation requirements.
Specifically, the Information Bulletin will discuss the following:
(1) The procedures for purchases and redemptions of Shares in Baskets;
(2) NYSE Arca Equities Rule 9.2(a),\12\ 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; (3) how information
regarding the Indicative Value is disseminated; (4) the requirement
that ETP Holders deliver a prospectus to investors purchasing newly
issued Shares prior to or concurrently with the confirmation of a
transaction; and (5) trading information. For example, the Information
Bulletin will advise ETP Holders, prior to the commencement of trading,
of the prospectus delivery requirements applicable to the Trust. The
Exchange notes that investors purchasing Shares directly from the Funds
(by delivery of the Basket Amount) will receive a prospectus. ETP
Holders purchasing Shares from the Trust for resale to investors will
deliver a prospectus to such investors.
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\12\ NYSE Arca Equities Rule 9.2(a) (``Diligence as to
Accounts'') provides that ETP Holders, before recommending a
transaction, must have reasonable grounds to believe that the
recommendation is suitable for the customer based on any facts
disclosed by the customer as to his other security holdings and as
to his financial situation and needs. Further, the proposed rule
amendment provides, with a limited exception, that prior to the
execution of a transaction recommended to a non-institutional
customer, the ETP Holders shall make reasonable efforts to obtain
information concerning the customer's financial status, tax status,
investment objectives, and any other information that they believe
would be useful to make a recommendation. See Securities Exchange
Act Release No. 54045 (June 26, 2006), 71 FR 37971 (July 3, 2006)
(SR-PCX-2005-115).
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In addition, the Information Bulletin will reference that the Trust
is subject to various fees and expenses described in each Fund's
Registration Statement. The Information Bulletin will also reference
the fact that there is no regulated source of last sale information
regarding physical commodities, that the Commission has no jurisdiction
over the trading of physical commodities or the futures contracts on
which the value of the Shares is based.
Trading Halts
The Exchange represents that it will cease trading the Shares of
the Funds if the listing market stops trading the Shares because of a
regulatory halt similar to a halt based on NYSE Arca Equities Rule
7.12. UTP trading in the Shares will also be governed by the trading
halt provisions of NYSE Arca Equities Rule 7.34, relating to temporary
interruptions in the calculation or wide dissemination of the
Indicative Value or the value of the underlying index, as applicable.
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares. Trading may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. These may include: (1) The extent to
which trading is not occurring in the underlying securities; or (2)
whether other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present.
If the Exchange becomes aware that the NAV for a Fund is not
disseminated to all market participants at the same time, it will halt
trading until such time as the NAV is available to all market
participants.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Exchange Act \13\ in general and furthers the objectives of Section
6(b)(5) \14\ in particular in that it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transaction in
securities, and, in general to protect investors and the public
interest. The Exchange believes that the proposal will facilitate the
listing and trading of additional types of commodity and currency-based
investments that will enhance competition among market participants, to
the benefit of investors and the marketplace.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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In addition, the proposed rule change is consistent with Rule 12f-5
under the Exchange Act \15\ because it deems the Shares to be equity
securities, thus rendering the Shares subject to the Exchange's rules
governing the trading of equity securities.
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\15\ 17 CFR 240.12f-5.
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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 purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \16\ and Rule 19b-4(f)(6) thereunder.\17\
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.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
\18\ Rule 19b-4(f)(6) also requires the Exchange to give the
Commission written notice of its intent to file the proposed rule
change along with a brief description and text of the proposed rule
change, at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied the pre-filing requirement.
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The Exchange has asked the Commission to waive the 30-day operative
delay, provided that the proposed rule change will not be operative
prior to the Commission approval of the Amex Proposal. The Exchange
believes the waiver of this period is necessary to permit the Exchange
to begin trading the Shares at the time trading in the Shares begins on
the Amex. The Commission believes such waiver is consistent with the
protection of investors and the public interest because the Exchange's
proposal is nearly identical to the Amex Proposal, which has been
subject to a full notice-and-comment period and
[[Page 42396]]
approved by the Commission.\19\ The Exchange's proposal raises no novel
or substantial issues and should benefit investors by creating, without
undue delay, additional competition in the market for the Shares. For
these reasons, the Commission designates the proposal to be operative
simultaneous with the Amex Proposal.\20\
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\19\ See supra note 6.
\20\ For purposes only of waiving this designation, 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 may summarily abrogate 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 e-mail to rule-comments@sec.gov. Please include File
Number SR-NYSEArca-2008-73 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-2008-73. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 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-2008-73 and should
be submitted on or before August 11, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16592 Filed 7-18-08; 8:45 am]
BILLING CODE 8010-01-P