

[Federal Register: January 12, 2006 (Volume 71, Number 8)]
[Notices]               
[Page 2072-2078]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ja06-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53059; File No. SR-Amex-2005-128]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change and Amendment No. 1 Thereto Relating to the Trading 
Pursuant to Unlisted Trading Privileges of the Euro Currency Trust

January 5, 2006.
    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 December 14, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
On January 4, 2006, the Amex filed Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons and is 
approving the proposal, as amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 is incorporated in this notice.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes new Amex Rules 1200B et seq. in order to permit 
trading, either by listing or pursuant to unlisted trading privileges 
(``UTP''), shares issued by a trust that holds a specified non-U.S. 
currency or currencies (``Currency Trust Shares'') and trading, 
pursuant to UTP, Euro Shares (``Shares'') of the Euro Currency Trust 
(``Trust'').
    The text of the proposed rule change is available on the Exchange's 
Web site at (http://www.amex.com), at the principal office of the 

Exchange, and at the Commission's Public Reference Room. The text of 
the proposed rule change is set forth below. Proposed new language is 
italicized; deletions are in [brackets].
* * * * *

Rule 1200B. Currency Trust Shares

    (a) Applicability. The Rules in this Section (Trading of Currency 
Trust Shares) are applicable only to Currency Trust Shares. Except to 
the extent that specific Rules in this Section govern, or unless the 
context otherwise requires, the provisions of the Constitution and all 
other rules and policies of the Board of Governors shall be applicable 
to the trading on the Exchange of such securities. Pursuant to the 
provisions of Article I, Section 3(i) of the Constitution, Currency 
Trust Shares are included within the definitions of ``security'' or 
``securities'' as such terms are used in the Constitution and Rules of 
the Exchange.
    (b) The term ``Currency Trust Shares'' for purposes of this Rule 
means a security that (i) that is issued by a trust that holds a 
specified non-U.S. currency deposited with the trust; (ii) when 
aggregated in some specified minimum number may be surrendered to the 
trust by the beneficial owner to receive the specified non U.S. 
currency; and (iii) pays beneficial owners interest and other 
distributions on the deposited non-U.S. currency, if any, declared and 
paid by the trust.

* * * Commentary

    .01 A Currency Trust Share is a Trust Issued Receipt that holds a 
specified non-U.S. currency or currencies deposited with the trust.
    .02 The Exchange requires that members and member organizations 
provide to all purchasers of newly issued Currency Trust Shares a 
prospectus for the series of Currency Trust Shares.
    .03 Transactions in Currency Trust Shares will occur between 9:30 
a.m. and either 4:00 p.m. or 4:15 p.m. for each series, as specified by 
the Exchange.
    .04 (a) Limit Orders--Members and member organizations shall not 
enter orders into the Exchange's order routing system, as principal or 
agent, limit orders in the same trust, for the account or accounts of 
the same or related beneficial owner, in such a manner that the member 
or beneficial owner(s) effectively is operating as a market maker by 
holding itself out as willing to buy and sell such Currency Trust 
Shares on a regular or continuous basis. In determining whether a 
member or beneficial owner effectively is operating as a market maker, 
the Exchange will consider, among other things, the simultaneous or 
near-simultaneous entry of limit orders to buy and sell the same 
Currency Trust Shares; the multiple acquisition and liquidation of 
positions in the same Currency Trust Shares during the same day; and 
the entry of multiple limit orders at different prices in the same 
Currency Trust Shares. 
    (b) Members and member organizations may not enter, nor permit the 
entry of, orders into the Exchange's order routing system if those 
orders are (i) created and communicated electronically without manual 
input (i.e., order entry by public customers or associated persons of 
members must involve manual input such as entering the terms of an 
order into an order-entry screen or manually selecting a displayed 
order against which an off-setting order should be sent) and (ii) 
eligible for execution through the Exchange's automatic execution 
system for Currency Trust Shares. Nothing in this paragraph, however, 
prohibits members from electronically communicating to the Exchange 
orders manually entered by customers into

[[Page 2073]]

front-end communication systems (e.g., Internet gateways, on-line 
networks, etc.).
* * * * *

Rule 1201B. Designation of an Underlying Foreign Currency

    The Exchange may trade, either by listing or pursuant to unlisted 
trading privileges, Currency Trust Shares that hold a specified non-
U.S. currency or currencies. Each issue of a Currency Trust Share shall 
be designated as a separate series and shall be identified by a unique 
symbol.
* * * * *

Rule 1202B. Initial and Continued Listing

    Currency Trust Shares will be listed and traded on the Exchange 
subject to application of the following criteria:
    (a) Initial Listing--The Exchange will establish a minimum number 
of Currency Trust Shares required to be outstanding at the time of 
commencement of trading on the Exchange.
    (b) Continued Listing--Following the initial 12-month period 
following the commencement of trading of the Currency Trust Shares, the 
Exchange may remove from listing Currency Trust Shares under any of the 
following circumstances:
    (i) If the trust has more than 60 days remaining until termination 
and there are fewer than 50 record and/or beneficial holders of 
Currency Trust Shares for 30 or more consecutive trading days;
    (ii) If the trust has fewer than 50,000 Currency Trust Shares 
issued and outstanding;
    (iii) If the market value of all Currency Trust Shares issued and 
outstanding is less than $1,000,000;
    (iv) If the value of the applicable non-U.S. currency is no longer 
calculated or available on at least a 15-second delayed basis from a 
source unaffiliated with the sponsor, trust, custodian or Exchange or 
the Exchange stops providing a hyperlink on its website to any such 
unaffiliated applicable non-U.S. currency value;
    (v) If the intraday indicative value is no longer made available on 
at least a 15-second delayed basis; or
    (vi) If such other event shall occur or condition exists which in 
the opinion of the Exchange makes further dealings on the Exchange 
inadvisable.
    Upon termination of a trust, the Exchange requires that Currency 
Trust Shares issued in connection with such trust be removed from 
Exchange listing.
    (c) Term--The stated term of the trust shall be as stated in the 
prospectus. However, a trust may be terminated under such earlier 
circumstances as may be specified in the trust prospectus.
    (d) Trustee--The following requirements apply:
    (i) The trustee of a trust must be a trust company or banking 
institution having substantial capital and surplus and the experience 
and facilities for handling corporate trust business. In cases where, 
for any reason, an individual has been appointed as trustee, a 
qualified trust company or banking institution must be appointed as co-
trustee.
    (ii) No change is to be made in the trustee of a listed issue 
without prior notice to and approval of the Exchange.
    (e) Voting--Voting rights shall be as set forth in the applicable 
trust prospectus.

* * * Commentary

    .01 The Exchange will file separate proposals under Section 19(b) 
of the Securities Exchange Act of 1934 before the listing and/or 
trading of the Currency Trust Shares designated on different underlying 
non-specified U.S. currencies.
* * * * *

Rule 1203B. Specialist Prohibitions

    Rule 175(c) shall be deemed to prohibit an equity specialist, his 
member organization, or any other member, limited partner, officer, or 
approved person thereof from acting as a market maker or functioning in 
any capacity involving market-making responsibilities in the applicable 
non-U.S. currency, options, related futures or options on futures, or 
any other related derivatives. However, an approved person of an equity 
specialist that has established and obtained Exchange approval of 
procedures restricting the flow of material, non-public market 
information between itself and the specialist member organization 
pursuant to Rule 193, and any member, officer, or employee associated 
therewith, may act in a market making capacity, other than as a 
specialist in Currency Trust Shares on another market center, in the 
applicable non-U.S. currency, options, related futures or options on 
futures, or any other related derivatives.

* * * Commentary

    .01 In connection with Currency Trust Shares, Commentaries .01, .02 
and .07 of Rule 170 shall not apply to the trading of Currency Trust 
Shares for the purpose of bringing the price of Currency Trust Shares 
into parity with the value of the applicable non-U.S. currency on which 
the Currency Trust Shares are based, with the net asset value of the 
Currency Trust Shares or with a futures contract on the applicable non-
U.S. currency on which the Currency Trust Shares are based. Such 
transactions must be effected in a manner that is consistent with the 
maintenance of a fair and orderly market and with the other 
requirements of this rule and the supplementary material herein.
* * * * *

Rule 1204B. Securities Accounts and Orders of Specialists

    (a) The member organization acting as specialist in Currency Trust 
Shares is obligated to conduct all trading in Currency Trust Shares in 
its specialist account, subject only to the ability to have one or more 
investment accounts, all of which must be reported to the Exchange (See 
Rule 170). In addition, the member organization acting as specialist in 
the Currency Trust Shares must file, with the Exchange, in a manner 
prescribed by the Exchange, and keep current a list identifying all 
accounts for trading the applicable non-U.S. currency, options, related 
futures or options on futures, or any other related derivatives, which 
the member organization acting as specialist may have or over which it 
may exercise investment discretion. No member organization acting as 
specialist in the Currency Trust Shares shall trade in the applicable 
non-U.S. currency, options, related futures or options on futures, or 
any other related derivatives, in an account in which a member 
organization acting as specialist, directly or indirectly, controls 
trading activities, or has a direct interest in the profits or losses 
thereof, which has not been reported to the Exchange as required by 
this Rule.
    (b) In addition to the existing obligations under Exchange rules 
regarding the production of books and records (See, e.g. Rule 31), the 
member organization acting as a specialist in Currency Trust Shares 
shall make available to the Exchange such books, records or other 
information pertaining to transactions by such entity or any member, 
member organization, limited partner, officer or approved person 
thereof, registered or non-registered employee affiliated with such 
entity for its or their own accounts in the applicable non-U.S. 
currency, options, related futures or options on futures, or any other 
related derivatives, as may be requested by the Exchange.
    (c) In connection with trading the applicable non-U.S. currency, 
options, related futures or options on futures, or any other related 
derivatives (including

[[Page 2074]]

Currency Trust Shares), the specialist registered as such in Currency 
Trust Shares shall not use any material nonpublic information received 
from any person associated with a member, member organization or 
employee of such person regarding trading by such person or employee in 
the applicable non-U.S. currency, options, related futures or options 
on futures, or any other related derivatives.
* * * * *

Rule 1205B. Limitation on Exchange Liability

    Neither the Exchange nor any agent of the Exchange shall have any 
liability for damages, claims, losses or expenses caused by any errors, 
omissions, or delays in calculating or disseminating any applicable 
non-U.S. currency value, the current value of the applicable non-U.S. 
currency if required to be deposited to the trust in connection with 
issuance of Currency Trust Shares; net asset value; or other 
information relating to the purchase, redemption or trading of the 
Currency Trust Shares, resulting from any negligent act or omission by 
the Exchange or any agent of the Exchange, or any act, condition or 
cause beyond the reasonable control of the Exchange or its agent, 
including, but not limited to, an act of God; fire; flood; 
extraordinary weather conditions; war; insurrection; riot; strike; 
accident; action of government; communications or power failure; 
equipment or software malfunction; or any error, omission or delay in 
the reports of transactions in the applicable non-U.S. currency.
* * * * *
Original Listing Fees
    Section. 140. Stock Issues--No Change.
    Issues Listed Under Section 106 (Currency and Index Warrants) and 
Section 107 (Other Securities)--No Change.
    Warrants--No Change.
    Bonds--No Change.
    Index Fund Shares, Trust Issued Receipts, Commodity-Based Trust 
Shares, Currency Trust Shares and Closed-End Funds--The original 
listing fee for Index Fund Shares listed under Rule 1000A, Trust Issued 
Receipts listed under Rule 1200, Commodity-Based Trust Shares listed 
under Rule 1200A, Currency Trust Shares listed under Rule 1200B and 
Closed-End Funds listed under section 101 of the Company Guide is 
$5,000 for each series or Fund, with no application processing fee.
    Special Shareholder Rights Plans--No Change.
* * * * *
Annual Fees
    Section. 141. Stock Issues; Issues Listed Under Sections 106 and 
107; Rules 1200 (Trust Issued Receipts) and 1200A (Commodity-Based 
Trust Shares) and; Rule 1200B (Currency Trust Shares;) and Closed-End 
Funds.

------------------------------------------------------------------------
             Shares outstanding                    Fees  (dollars)
------------------------------------------------------------------------
5,000,000 shares or less...................  15,000
                                             (minimum)
5,000,001 to 10,000,000 shares.............  17,500
10,000,001 to 25,000,000 shares............  20,000
25,000,001 to 50,000,000 shares............  22,500
In excess of 50,000,000 shares.............  30,000
                                             (maximum)
30,000 (maximum)...........................  ...........................
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The Board of Governors or its designee may, in its discretion, defer, 
waive or rebate all or any part of the applicable annual listing fee 
specified above excluding the fees applicable to issues listed under 
sections 106 and 107 and rule 1200 (Trust Issued Receipts); and Closed-
End Funds.
    Issues Listed Under Rule 1000A (Index Fund Shares)--No Change.
    The annual fee is payable in January of each year and is based on 
the total number of all classes of shares (excluding treasury shares) 
and warrants according to information available on Exchange records as 
of December 31 of the preceding year. (The above fee schedule also 
applies to companies whose securities are admitted to unlisted trading 
privileges.)
    In the calendar year in which a company first lists, the annual fee 
will be prorated to reflect only that portion of the year during which 
the security has been admitted to dealings and will be payable within 
30 days of the date the company receives the invoice, based on the 
total number of outstanding shares of all classes of stock at the time 
of original listing.
    The annual fee for issues listed under Rule 1000A (Index Fund 
Shares), Rule 1200 (Trust Issued Receipts), [and] Rule 1200A 
(Commodity-Based Trust Shares) and Rule 1200B (Currency Trust Shares) 
is based upon the number of shares of a series of Index Fund Shares, 
Trust Issued Receipts, [or] Commodity-Based Trust Shares or Currency 
Trust Shares outstanding at the end of each calendar year. For multiple 
series of Index Fund Shares issued by an open-end management investment 
company, [or] for multiple series of Trust Issued Receipts and/or 
Commodity-Based Trust Shares, or for multiple series of Currency Trust 
Shares, the annual listing fee is based on the aggregate number of 
shares in all series outstanding at the end of each calendar year.
    The annual fee for a Closed-End Fund listed under Section 101 of 
the Company Guide is based upon the number of shares outstanding of 
such Fund at the end of each calendar year. For multiple Closed-End 
Funds of the same sponsor, the annual listing fee is based on the 
aggregate number of shares outstanding of all such Funds at the end of 
each calendar year.
    Bond Issues--No Change.
    Late Fee--No Change.
    NOTE: No Change.
* * * * *

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. The 
text of these statements may be examined at the places specified in 
Item III below, and is set forth in sections A, B, and C below.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to add new Amex Rules 1200B et. seq. for the 
purpose of permitting the trading, either by listing or pursuant to 
UTP, of Currency Trust Shares.\4\ In particular, the Exchange proposes 
to initially trade the Shares under proposed Amex Rule 1201B pursuant 
to UTP. The Commission previously approved the original listing and 
trading of the Shares by the New York Stock Exchange, Inc. 
(``NYSE'').\5\
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    \4\ Currency Trust Shares are securities issued by a trust that 
represent investors' discrete identifiable and undivided beneficial 
ownership interest in the non-U.S. currency or currencies deposited 
into the trust. The Exchange notes that the Commission has approved 
the listing and trading of other securities products for which the 
underlying interest was not a security trading on a regulated 
market. See Securities Exchange Act Release Nos. 51058 (January 19, 
2005), 70 FR 3749 (January 26, 2005) (approving the listing and 
trading of shares of the iShares COMEX Gold Trust); and 51446 (March 
29, 2005), 70 FR 17272 (April 5, 2005) (approving the trading of 
shares of the streetTRACKS Gold Trust pursuant to UTP).
    Unlike Commodity-Based Trust Shares under Amex Rule 1200A, which 
are shares of a trust that holds one or more physical commodities, 
the Currency Trust Shares are shares of a trust that holds non-U.S. 
currency or currencies.
    \5\ See Securities Exchange Act Release No. 52843 (November 28, 
2005), 70 FR 72486 (December 5, 2005) (SR-NYSE-2005-65) (``NYSE 
Order'').
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    The Shares represent beneficial ownership interests in the net 
assets of

[[Page 2075]]

the Trust consisting only of euro on demand deposits in a euro-
denominated, interest-bearing account, less the expenses of the Trust. 
According to the Trust's Registration Statement,\6\ the investment 
objective of the Trust is for the Shares to reflect the price of the 
euro. The Sponsor expects that the price of a Share will fluctuate in 
response to fluctuations in the euro.
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    \6\ The Sponsor, on behalf of the Trust, filed the Form S-1 (the 
``Registration Statement'') on June 7, 2005 and Amendment No. 4 
thereto on December 6, 2005. See Registration No. 333-125581.
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    Amex Rules 1200B et seq. are intended to accommodate possible 
future listing and trading of trusts based on non-U.S. currencies in 
addition to the euro. For each separate and discrete Currency Trust 
Share, the Exchange will submit a filing pursuant to section 19(b) of 
the Act,\7\ subject to the review and approval of the Commission. The 
Exchange also proposes to amend its original listing and annual listing 
fees in sections 140 and 141 of the Amex Company Guide (``Company 
Guide'') to include the Currency Trust Shares. A description of the 
Euro, the Foreign Exchange Industry, foreign currency regulation, 
trust, and the Shares is set forth in the NYSE Order.
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    \7\ 15 U.S.C. 78s(b).
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    Issuances of Shares will be made only in baskets of 50,000 Shares 
or multiples thereof (``Basket''). The Trust will issue and redeem the 
Shares on a continuous basis, by or through participants that have 
entered into participant agreements (each, an ``Authorized 
Participant'') \8\ with the trustee, the Bank of New York 
(``Trustee''), at the net asset value (``NAV'') per Share next 
determined after an order to purchase a Basket is received in proper 
form.
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    \8\ An ``Authorized Participant'' is a person, who at the time 
of submitting to the trustee an order to create or redeem one or 
more Baskets, (i) is a registered broker-dealer, (ii) is a 
Depository Trust Company Participant or an Indirect Participant and 
(iii) has in effect a valid Authorized Participant Agreement.
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    When calculating NAV, the Trustee will value the euros held by the 
Trust on the basis of the day's announced Noon Buying Rate. If the Noon 
Buying Rate is not announced, the Trustee will use the most recently 
announced Noon Buying Rate, unless the Trustee, in consultation with 
the Sponsor, determines to apply an alternative basis for evaluation as 
a result of extraordinary circumstances. The calculation methodology 
for the NAV is described in more detail in the NYSE Order.
    Baskets will be issued in exchange for an amount of euros (``Basket 
Euro Amount'') based on the combined NAV per Share of the number of 
Shares included in the Baskets being created. The Basket Euro Amount 
and NAV will be determined by the Trustee ``as promptly as 
practicable'' after the Federal Reserve announces the Noon Buying Rate 
and published on the Trust's Web site on each Business Day.\9\ 
Authorized Participants that wish to purchase a Basket must transfer 
the Basket Euro Amount to the Trust in exchange for a Basket. Baskets 
are then separable upon issuance into the Shares that will be traded on 
the Amex on a UTP basis.\10\
    The Shares will not be individually redeemable but will only be 
redeemable in Baskets. To redeem, an Authorized Participant will be 
required to accumulate enough Shares to constitute a Basket (i.e., 
50,000 Shares). Authorized Participants that wish to redeem a Basket 
will receive the Basket Euro Amount in exchange for each Basket 
surrendered. The operation of the Trust and creation and redemption 
process is described in more detail in the NYSE Order.
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    \9\ Ordinarily no later than 2 p.m. (ET).
    \10\ Shares are separate and distinct from the underlying euro 
comprising the portfolio of the Trust. The Exchange expects that the 
number of outstanding Shares will increase and decrease as a result 
of in-kind deposits and withdrawals of the underlying euro.
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    (a) Dissemination of Information About the Shares and Underlying 
Euro Holdings. Although the spot price of a foreign currency, such as 
the euro, is not disseminated over the facilities of Consolidated Tape 
Association (``CTA''), the last sale price for the Shares, as is the 
case for all equity securities traded on the Exchange, will be 
disseminated over the CTA. Market prices for the Shares will be 
available from a variety of public sources, including brokerage firms, 
financial information Web sites such as Bloomberg (http://bloomberg.com/markets/currencies/eurafr_currencies.html
), CBS Market 

Watch (http://finance.marketwatch.com/tools/stockresearch/globalmarkets) and Yahoo! Finance (http://finance.yahoo.com/currency), 
ance.yahoo.com/currency), 
and other information service providers. Many of these sites offer 
price quotations drawn from other published sources, and as the 
information is supplied free of charge, it generally is subject to time 
delays.
    In addition, there is a considerable amount of euro price and euro 
market information available on public Web sites and through 
professional and subscription services. Current spot prices are also 
generally available from foreign exchange dealers. Investors may obtain 
on a 24-hour basis euro pricing information based on the euro spot 
price from various financial information service providers. The 
Exchange states that, like bond securities traded in the over-the-
counter market with respect to which pricing information is available 
directly from bond dealers, current spot prices are also generally 
available with bid/ask spreads from foreign exchange dealers. Complete 
real-time data for euro futures and options prices traded on the 
Chicago Mercantile Exchange (``CME'') and Philadelphia Stock Exchange 
(``Phlx'') are also available by subscription from information service 
providers. The CME and Phlx also provide delayed futures and options 
information on current and past trading sessions and market news free 
of charge on their respective Web sites. There are a variety of other 
public Web sites that provide information on foreign currency and the 
euro, such as Bloomberg (http://www.bloomberg.com/markets/currencies/ 

eurafr--currencies.html), which regularly reports current foreign 
exchange pricing for a fee. Other service providers include CBS Market 
Watch (http://www.marketwatch.com/tools/stockresearch/globalmarkets) and Yahoo! Finance (http://finance.yahoo.com/currency). Many of these 
oo.com/currency). Many of these 
sites offer price quotations drawn from other published sources, and as 
the information is supplied free of charge, it generally is subject to 
time delays.\11\
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    \11\ There may be incremental differences in the euro spot price 
among the various information service sources. While the Exchange 
believes the differences in the euro spot price may be relevant to 
those entities engaging in arbitrage or in the active daily trading 
of euro or foreign currency derivatives, the Exchange believes such 
differences are likely of less concern to individual investors 
intending to hold the Shares as part of a long-term investment 
strategy.
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    The Trust's Web site at (http://www.currencyshares.com these ) (to which 

the Amex will provide a link) will be publicly accessible at no charge 
and will contain the following information: (1) The euro spot 
price,\12\ including the bid and offer and the midpoint between the bid 
and offer for the euro spot price, updated every 5 to 10 seconds; (2) 
an intraday indicative value (``IIV'') per Share calculated by 
multiplying the indicative spot price of the euro by the quantity of 
euro backing each Share, on a 5 to 10-second delayed basis; (3) a 20-

[[Page 2076]]

minute delayed basis indicative value, which is used for calculating 
premium/discount information; (4) premium/discount information, 
calculated on a 20-minute delayed basis; (5) the NAV of the Trust as 
calculated each Business Day; (6) accrued interest per Share; (7) the 
daily Noon Buying Rate; (8) the Basket Euro Amount; and (9) the last 
sale price of the Shares as traded in the U.S. market, subject to a 20-
minute delay.
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    \12\ The Trust Web site's euro spot price will be provided by 
The Bullion Desk (http://www.thebulliondesk.com). The Commission 

notes that the NYSE Order states that the Bullion Desk is not 
affiliated with the Trust, Trustee, Sponsor, Depository, 
Distributor, or the Exchange. In the event that the Trust's Web site 
should cease to provide this euro spot price information from an 
unaffiliated source and the intraday indicative value of the Shares, 
the Commission notes that NYSE will halt trading in the Shares and 
commence delisting proceedings for the Shares.
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    Between 12 p.m. and 2 p.m. (New York time) each business day the 
Trustee will calculate NAV and Basket Euro Amount based on the combined 
NAV per share of the number of Shares included in the Baskets being 
created of the shares and will post NAV on the Trust's Web site as soon 
as valuation of the euro held by the Trust is complete (ordinarily by 2 
p.m. (New York time)). Ordinarily, it will be posted no more than 30 
minutes after the Noon Buying Rate is published by the Federal Reserve 
Bank of New York.\13\
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    \13\ The Commission notes that in the NYSE Order, NYSE 
represented that all market participants will have access to this 
data at the same time and, therefore, no market participant will 
have a time advantage in using such data.
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    (b) Continued Listing and UTP Criteria. While the Exchange 
immediately seeks to UTP the Euro Currency Shares, the Exchange is also 
adopting general initial and continued listing standards applicable to 
all Currency Shares. In such an event, the Exchange would still file a 
Form 19b-4 to list such Shares. However, such continued listing 
standards include the following items. When the Exchange is the primary 
listing exchange, the Trust will be subject to the continued trading 
criteria under proposed Amex Rule 1202B.\14\ In particular, the 
proposed criteria provides that the Shares may be removed from trading 
following the initial 12-month period from the date of commencement of 
trading of the Shares on the Exchange under any of the following 
circumstances:
---------------------------------------------------------------------------

    \14\ Proposed Amex Rule 1202B for trading the Shares is 
substantially similar to current Amex Rule 1202A relating to 
Commodity-Based Trust Shares.
---------------------------------------------------------------------------

     If the Trust has more than 60 days remaining until 
termination and there are fewer than 50 record and/or beneficial 
holders of the Shares for 30 or more consecutive trading days;
     If the Trust has fewer than 50,000 Shares issued and 
outstanding;
     If the market value of all the Shares is less than 
$1,000,000;
     If the value of the euro is no longer calculated or 
available on at least a 15-second delayed basis from a source 
unaffiliated with the sponsor, Trust, custodian or the Exchange or the 
Exchange stops providing a hyperlink on its Web site to any such 
unaffiliated euro value;
     If the IIV is no longer made available on at least a 15-
second delayed basis; or
     If such other event shall occur or condition exists which 
in the opinion of the Exchange makes further dealings on the Exchange 
inadvisable.

In addition, the Exchange will remove Shares from listing and trading 
upon termination of the Trust. Unless otherwise terminated pursuant to 
the terms of the Depositary Trust Agreement between the Trust and 
Sponsor, the Trust will terminate on a specified date in 2045.
    If the Exchange is only trading the Shares pursuant to UTP, then 
the Exchange will cease trading in the Shares if (a) the primary market 
stops trading the shares because of a regulatory halt similar to a halt 
based on Amex Rule 117 and/or a halt because dissemination of the IIV 
and/or the underlying value (spot price on future contract) of the 
applicable non-U.S. currency has ceased; or (b) the primary market 
delist the Shares.
    (c) Trading Rules. The Exchange deems the Currency Trust Shares to 
be equity securities, thus rendering trading in the Shares subject to 
the Exchange's existing rules governing the trading of equity 
securities. The trading hours for the Shares on the Exchange will be 
9:30 a.m. until 4:15 p.m. ET. The Shares will trade with a minimum 
price variation of $0.01.
    Amex Rule 154, Commentary .04(c) provides that stop and stop limit 
orders to buy or sell a security (other than an option, which is 
covered by Rule 950(f) and Commentary thereto) the price of which is 
derivatively priced based upon another security or index of securities, 
may with the prior approval of a Floor Official, be elected by a 
quotation, as set forth in Commentary .04(c)(i-v). The Exchange has 
designated Currency Trust Shares, including the Shares, as eligible for 
this treatment.\15\
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    \15\ See Securities Exchange Act Release No. 29063 (April 10, 
1991), 56 FR 15652 (April 17, 1991) at note 9, regarding the 
Exchange's designation of equity derivative securities as eligible 
for such treatment under Amex Rule 154, Commentary .04(c).
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    Currency Trust Shares will be deemed ``Eligible Securities'', as 
defined in Amex Rule 230, for purposes of the Intermarket Trading 
System (``ITS'') Plan and therefore will be subject to the trade 
through provisions of Amex Rule 236, which require that members avoid 
initiating trade-throughs for ITS securities.
    Specialist transactions in Currency Trust Shares made in connection 
with the creation and redemption of Currency Trust Shares will not be 
subject to the prohibitions of Amex Rule 190.\16\ The Commission staff 
has provided certain exemptive and no-action relief for transactions in 
Currency Trust Shares from the short sale requirements of Rule 10a-1 
and Regulation SHO under the Act.\17\ The Exchange will issue a notice 
detailing the terms of the exemption or relief. In addition, the 
Exchange believes that Amex Commentary .12 to Amex Rule 170 exempting 
specialists from certain ``stabilization'' provisions in connection 
with Trust Issued Receipts (``TIRs'') equally apply to Currency Trust 
Shares.\18\
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    \16\ See Amex Commentary .05 to Rule 190.
    \17\ Currency Trust Shares are exempt from Rule 10a-1 under the 
Act permitting sales without regard to the ``tick'' requirements of 
Rule 10a-1 under the Act. Rule 10a-1(a)(1)(i) under the Act provides 
that a short sale of an exchange-traded security may not be effected 
(i) below the last regular-way sale price (an ``uptick'') or (ii) at 
such price unless such price is above the next preceding different 
price at which a sale was reported (a ``zero-plus tick''). No-action 
relief from the marking requirements of Rule 200(g) of Regulation 
SHO permits broker-dealers, subject to certain conditions, to mark 
short sales in the Euro Shares ``short,'' rather than ``short 
exempt.'' The SEC exempted the Shares from the short sale rule 
pursuant to a No-Action Letter dated December 5, 2005.
    \18\ See Securities Exchange Act Release Nos. 49087 (January 15, 
2004), 69 FR 3622 (January 26, 2004) (Order); and 48800 (November 
17, 2003), 68 FR 66144 (November 25, 2003) (Notice).
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    The adoption of proposed Amex Rule 1203B relating to certain 
specialist prohibitions will address potential conflicts of interest in 
connection with acting as a specialist in Currency Trust Shares. 
Specifically, proposed Amex Rule 1203B provides that the prohibitions 
in Amex Rule 175(c) apply to a specialist in Currency Trust Shares, so 
that the specialist or affiliated person may not act or function as a 
market maker in the underlying non-U.S. currency, options, futures or 
options on futures on such currency, or any other derivatives based on 
such currency. An affiliated person of the specialist consistent with 
Amex Rule 193 may be afforded an exemption to act in a market making 
capacity on another market center, other than as a specialist in the 
underlying non-U.S. currency, options, futures or options on futures on 
such currency, or any other derivatives based on such currency. In 
particular, proposed Amex Rule 1203B provides that an approved person 
of an equity specialist that has established and obtained Exchange 
approval for procedures restricting the flow of material, non-public 
market information between itself and the specialist

[[Page 2077]]

member organization, and any member, officer, or employee associated 
therewith, may act in a market making capacity, other than as a 
specialist in Currency Trust Shares on another market center, in the 
underlying non-U.S. currency, options, futures or options on futures on 
such currency, or any other derivatives based on such currency.
    Adoption of proposed Amex Rule 1204B will also ensure that 
specialists handling the Currency Trust Shares provide the Exchange 
with all the necessary information relating to their trading in the 
underlying non-U.S. currency, options, futures or options on futures on 
such currency, or any other derivatives based on such currency. As a 
general matter, the Exchange has regulatory jurisdiction over its 
members, member organizations and approved persons of a member 
organization. The Exchange also has regulatory jurisdiction over any 
person or entity controlling a member organization as well as a 
subsidiary or affiliate of a member organization that is in the 
securities business. A subsidiary or affiliate of a member organization 
that does business only in non-U.S. currencies would not be subject to 
Exchange jurisdiction, but the Exchange could obtain 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.
    (d) Information Circular. Prior to the commencement of trading, the 
Exchange will inform its members and member organizations in an 
Information Circular of the special characteristics and risks 
associated with trading the Shares. Specifically, the Information 
Circular will discuss the following: (1) The procedures for purchases 
and redemptions of Shares in Baskets; (2) applicable Exchange rules 
including requirements of Amex Rule 411 (``Duty to Know and Approve 
Customers''), which impose a duty of due diligence on its members and 
member firms to learn the essential facts relating to every customer 
prior to trading the Shares; (3) how information regarding the IIV is 
disseminated; and (4) trading information. The Circular will also refer 
members to language in the Registration Statement regarding prospectus 
delivery requirements for the Shares. The Information Circular will 
also note to members their obligations regarding prospectus delivery 
requirements for the Shares. The Exchange notes that investors 
purchasing Shares directly from the Trust (by delivery of the Basket 
Euro Amount) will receive a prospectus. Exchange members purchasing 
Shares from the Trust for resale to investors will deliver a prospectus 
to such investors.
    In addition, the Information Circular will reference that the Trust 
is subject to various fees and expenses described in the Registration 
Statement, and that the number of euros required to create a Basket or 
to be delivered upon a redemption of a Basket may gradually decrease 
over time in the event that the Trust is required to sell euros to pay 
the Trust's expenses, and that if done at a time when the price of the 
euro is relatively low, it could adversely affect the value of the 
Shares. Finally, Information Circular will also reference the fact that 
there is no regulated source of last sale information regarding the 
euro, and that the Commission has no jurisdiction over the trading of 
the euro.
    (e) Trading Halts. 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 the 
existence of unusual conditions or circumstances that may be 
detrimental to the maintenance of a fair and orderly market. In 
addition, trading on the Exchange in the Shares may be halted if (1) 
the market volatility trading halt parameters set forth in Amex Rule 
117 are reached or (2) the trading of futures contracts based on the 
euro is halted or suspended. In addition, if the Exchange is the 
listing market for Currency Trust Shares, the Exchange will halt 
trading in the Shares if the Trust Web site (to which the Exchange will 
link) ceases to provide (1) the value of the euro updated at least 
every 15 seconds from a source not affiliated with the Sponsor, Trust, 
or the Exchange, or (2) the IIV per Share updated at least every 15 
seconds. If the Exchange is trading the Shares pursuant to UTP, such as 
the Euro Currency Shares, the Exchange will cease trading the Shares if 
(a) the primary market stops trading the Shares because of a regulatory 
halt similar to Amex Rule 117 and/or a halt because dissemination of 
the IIV and/or underlying spot price has ceased; or (b) the primary 
market delists the Shares.
    (f) Surveillance. The Exchange's surveillance procedures applicable 
to trading in the proposed Currency Trust Shares will be similar to 
those applicable to TIRs, Portfolio Depository Receipts and Index Fund 
Shares currently trading on the Exchange. The Exchange represents that 
its surveillance procedures are adequate to properly monitor the 
trading of the Shares.
2. Statutory Basis
    The proposed rule change, as amended, is consistent with section 
6(b) of the Act \19\ in general and furthers the objectives of section 
6(b)(5) \20\ 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. In addition, the Exchange believes that the proposal is 
consistent with Rule 12f-5 under the Act \21\ because it deems the Fund 
Shares to be equity securities, thus rendering the Shares subject to 
the Exchange's existing rules governing the trading of equity 
securities.
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    \19\ 15 U.S.C. 78s(b).
    \20\ 15 U.S.C. 78s(b)(5).
    \21\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchanges believes that the proposed rule change, as amended, 
will impose no 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-Amex-2005-128 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.

    All submissions should refer to File Number SR-Amex-2005-128. This 
file

[[Page 2078]]

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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Amex. 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-Amex-2005-128 and should be submitted on or before 
February 2, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities 
exchange.\22\ In particular, the Commission finds that the proposed 
rule change is consistent with section 6(b)(5) of the Act,\23\ which 
requires that an exchange have rules designed, among other things, to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and in general to protect investors and the public 
interest.
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    \22\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \23\ 15 U.S.C. 78f(b)(5).
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    In addition, the Commission finds that the proposal is consistent 
with section 12(f) of the Act,\24\ which permits an exchange to trade, 
pursuant to UTP, a security that is listed and registered on another 
exchange.\25\ The Commission notes that it previously approved the 
listing and trading of the Shares on the NYSE.\26\ The Commission also 
finds that the proposal is consistent with Rule 12f-5 under the 
Act,\27\ which provides that an exchange shall not extend UTP to a 
security unless the exchange has in effect a rule or rules providing 
for transactions in the class or type of security to which the exchange 
extends UTP. Amex rules deem the Shares to be equity securities, thus 
trading in the Shares will be subject to the Exchange's existing rules 
governing the trading of equity securities.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78l(f).
    \25\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally 
prohibits a broker-dealer from trading a security on a national 
securities exchange unless the security is registered on that 
exchange pursuant to section 12 of the Act. Section 12(f) of the Act 
excludes from this restriction trading in any security to which an 
exchange ``extends UTP.'' When an exchange extends UTP to a 
security, it allows its members to trade the security as if it were 
listed and registered on the exchange even though it is not so 
listed and registered.
    \26\ See NYSE Order, supra note 4.
    \27\ 17 CFR 240.12f-5.
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    The Commission further believes that the proposal is consistent 
with section 11A(a)(1)(C)(iii) of the Act,\28\ which sets forth 
Congress's finding that it is in the public interest and appropriate 
for the protection of investors and the maintenance of fair and orderly 
markets to assure the availability to brokers, dealers, and investors 
of information with respect to quotations for and transactions in 
securities.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Exchange will cease trading in the Shares if (a) the primary 
market stops trading the Shares because of a regulatory halt similar to 
a halt based on Amex Rule 117 and/or halt because dissemination of the 
IIV and/or underlying spot price has ceased; or (b) the primary market 
delists the Shares.
    In support of this proposed rule change, the Exchange has made the 
following representations:
    1. Amex has appropriate rules to facilitate transactions in this 
type of security.
    2. Amex surveillance procedures are adequate to properly monitor 
the trading of the Shares on the Exchange.
    3. Amex will distribute an Information Circular to its members 
prior to the commencement of trading of the Shares on the Exchange that 
explains the terms, characteristics, and risks of trading such shares.
    4. Amex will require a member with a customer that purchases newly 
issued Shares on the Exchange to provide that customer with a product 
prospectus and will note this prospectus delivery requirement in the 
Information Circular.
    5. Amex will cease trading in the Shares if (a) the primary market 
stops trading the Shares because of a regulatory halt similar to a halt 
based on Amex Rule 117 and/or halt because dissemination of the IIV 
and/or underlying spot price has ceased; or (b) the primary market 
delists the Shares.
    This approval order is conditioned on Amex's adherence to these 
representations.
    The Commission finds good cause for approving this proposed rule 
change, as amended, before the thirtieth day after the publication of 
notice thereof in the Federal Register. As noted previously, the 
Commission previously found that the listing and trading of these 
Shares on the NYSE is consistent with the Act.\29\ The Commission 
presently is not aware of any issue that would cause it to revisit that 
earlier finding or preclude the trading of these funds on the Exchange 
pursuant to UTP. Therefore, accelerating approval of this proposed rule 
change should benefit investors by creating, without undue delay, 
additional competition in the market for these Shares.
---------------------------------------------------------------------------

    \29\ See NYSE Order, supra note 4.
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (SR-Amex-2005-128), as amended, is hereby 
approved on an accelerated basis.\30\
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    \30\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-216 Filed 1-11-06; 8:45 am]

BILLING CODE 8010-01-P
