

[Federal Register: January 19, 2006 (Volume 71, Number 12)]
[Notices]               
[Page 3129-3137]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ja06-128]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53105; File No. SR-Amex-2005-059]

 
Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Accelerated Approval of a Proposed Rule Change and Amendment 
Nos. 1 and 2 Thereto and Notice of Filing and Order Granting 
Accelerated Approval of Amendment Nos. 3 and 4 Thereto Relating to the 
Listing and Trading of the DB Commodity Index Tracking Fund

January 11, 2006.

I. Introduction

    On May 27, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and 
Rule 19b-4 thereunder,\2\ a proposed rule change to list and trade the 
DB Commodity Index Tracking Fund under new Commentary .07 to Amex Rule 
1202. On September 15, 2005, the Amex filed Amendment No. 1 to the 
proposed rule change. On November 15, 2005, the Amex filed Amendment 
No. 2 to the proposed rule change. The proposed rule change, as amended 
by Amendment Nos. 1 and 2, was published for comment in the Federal 
Register on December 16, 2005 for a 15-day comment period, which ended 
on January 3, 2006.\3\ The Commission received no comments on the 
proposal. On January 5, 2006, the Amex filed Amendment No. 3 to the 
proposed rule change.\4\ On January 11,

[[Page 3130]]

2006, the Amex filed Amendment No. 4 to the proposed rule change.\5\ 
This order grants accelerated approval of the proposed rule change, as 
amended by Amendment Nos. 1 and 2. Simultaneously, the Commission is 
providing notice of filing of, granting accelerated approval of, and 
soliciting comments from interested persons on Amendment Nos. 3 and 4.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 52940 (December 12, 
2005), 70 FR 74850.
    \4\ In Amendment No. 3, the Amex: (1) Added language to clarify 
that the composition of the Index may be adjusted in the event that 
the Index Sponsor is not able to obtain information necessary from 
the relevant futures exchanges to calculate the daily and/or closing 
prices for the Index commodities; (2) stated that, in connection 
with adjustments to the Index, if futures prices are not available, 
the Index Sponsor will typically use the prior day's futures price 
and that, in exceptional cases, the Index Sponsor may employ a 
``fair value'' price; (3) stated that, in the case of a temporary 
disruption in connection with the trading of the futures contracts 
comprising the Index, the Exchange believes that it is unnecessary 
for a filing pursuant to Section 19(b) under the Exchange Act to be 
submitted to the Commission and represented that if the use of a 
prior day's price or ``fair value'' pricing for an Index commodity 
or commodities is more than of a temporary nature, a rule filing 
will be submitted pursuant to Section 19(b) of the Exchange Act; (4) 
represented that, if a successor or substitute Index is used by the 
Managing Owner, the Exchange will file a proposed rule change 
pursuant to Rule 19b-4 under the Exchange Act to address, among 
other things, the listing and trading characteristics of the 
successor or substitute index and the Exchange's surveillance 
procedures applicable to the successor or substitute index; and (5) 
requested accelerated approval of Amendment No. 3.
    \5\ In Amendment No. 4, the Amex amended the rule text to 
require that the Index value will be disseminated through one or 
more major market data vendors at least every 15 seconds during the 
time the Shares trade on Amex.
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II. Description of the Proposal

    The Exchange proposes to add new Commentary .07 to Amex Rule 1202 
for the purpose of permitting the listing and trading of Trust Issued 
Receipts (``TIRs'') where the trust holds shares (``Investment 
Shares'') that are issued by a trust, partnership, commodity pool, or 
other similar entity that holds investments in any combination of 
securities, futures contracts, options on futures contracts, swaps, 
forward contracts, commodities or portfolios of investments. For each 
separate Investment Share, the Exchange would submit a filing pursuant 
to Section 19(b) of the Act. The Shares will conform to the initial and 
continued listing criteria under proposed Commentary .07(d) to Amex 
Rule 1202.\6\ In its proposal, the Amex initially proposes to list and 
trade the shares (the ``Shares'') of a specific trust, DB Commodity 
Index Tracking Fund (the ``Fund''), that invests in the securities of a 
commodity pool.
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    \6\ Proposed Commentary .07(d) to Rule 1202 for listing the 
Shares is substantially similar to current Rule 1202A relating to 
Commodity-Based Trust Shares.
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    The Fund will invest substantially all of its assets in the common 
units of beneficial interests of DB Commodity Index Tracking Master 
Fund (the ``Master Fund''). The Master Fund is a trust created under 
Delaware law that will consist primarily of futures contracts on the 
commodities comprising the Deutsche Bank Liquid Commodity 
IndexTM--Excess Return (the ``DBLCI'' or ``Index''). Both 
the Fund and the Master Fund are commodity pools operated by DB 
Commodity Services LLC (the ``Managing Owner'').\7\ The Managing Owner 
will be registered as a commodity pool operator and commodity trading 
advisor with the Commodity Futures Trading Commission (``CFTC'') and a 
member of the National Futures Association (``NFA'').
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    \7\ The Exchange stated that the Fund is not a registered 
investment company under the Investment Company Act of 1940 (``1940 
Act'') and is not required to register under the 1940 Act.
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    The Managing Owner will serve as the commodity pool operator and 
commodity trading advisor of the Fund and the Master Fund. In this 
particular case, the Managing Owner of the Master Fund will manage only 
the futures contracts in order to track the performance of the Index. 
The Master Fund may also include U.S. Treasury securities for margin 
purposes and other high credit quality short-term fixed income 
securities.

III. Index Description

    DBLCI is intended to reflect the performance of certain 
commodities. The Index tracks the performance of futures contracts on 
crude oil, heating oil, aluminum, gold, corn and wheat, and the 
notional amounts of each commodity included in the Index are 
approximately in proportion to historical levels of the world's 
production and supplies of such commodities. The sponsor of the Index 
is Deutsche Bank AG London (``DB London'').
    The Index value is calculated by DB London during the trading day 
on the basis of the most recently reported trade price for the relevant 
futures contract relating to each of the Index commodities. Therefore, 
the market value of each Index commodity during the trading day will be 
equal to the number of futures contracts of each commodity represented 
in the Index multiplied by the real-time futures contract price (i.e., 
the most recently reported trade price).\8\ The Index value will be 
calculated and disseminated at least every 15 seconds during the period 
the Shares trade on the Exchange. The closing level of the Index is 
calculated by DB London on the basis of closing prices for the 
applicable futures contracts relating to each of the Index commodities 
and applying such prices to the relevant notional amount. For each 
Index commodity, the market value will be equal to the number of 
futures contracts represented in the Index multiplied by the futures 
contract closing price. The Index includes provisions for the 
replacement of expiring futures contracts. This replacement takes place 
over a period of time in order to lessen the impact on the market for 
such Index commodity. Such replacements occur monthly (other than in 
November) during the first week of the month in the case of futures 
contracts relating to crude oil and heating oil and annually in 
November in the case of futures contracts relating to aluminum, gold, 
corn and wheat.
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    \8\ Quote information and last sale information is available 
from the applicable futures markets and from data vendors.
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    The Index is adjusted annually in November to rebalance its 
composition to ensure that each of the Index commodities are weighted 
in the same proportion that such commodities were weighted on December 
1, 1988 (the ``Base Date''). The Index has been calculated back to the 
Base Date. On the Base Date, the closing level was 100.
    The following table reflects the index base weights (``Index Base 
Weights'') of each Index commodity on the Base Date:

------------------------------------------------------------------------
                                                                  Index
                                                                   base
                        Index commodity                           weight
                                                                   (%)
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Crude Oil......................................................    35.00
Heating Oil....................................................    20.00
Aluminum.......................................................    12.50
Gold...........................................................    10.00
Corn...........................................................    11.25
Wheat..........................................................    11.25
                                                                --------
    Closing Level on Base Date.................................   100.00
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    The composition \9\ of the Index may be adjusted in the event that 
the Index Sponsor is not able to obtain information necessary from the 
relevant futures exchanges to calculate the daily and/or closing prices 
for the Index commodities. If futures prices are not available, the 
Index Sponsor will typically use the prior day's futures price. In 
exceptional cases (such as when a daily price limit is reached on a 
futures exchange), the Index Sponsor may employ a ``fair value'' price 
(i.e., the price for unwinding the futures position by dealers 
OTC).\10\ In the case of a temporary disruption in connection with the 
trading of the futures contracts comprising the Index, the Exchange 
believes that it is unnecessary for a filing pursuant to Section 19(b) 
under the Exchange Act to be submitted to the

[[Page 3131]]

Commission. However, the Exchange represents that if the use of a prior 
day's price or ``fair value'' pricing for an Index commodity or 
commodities is more than of a temporary nature, a rule filing will be 
submitted pursuant to Section 19(b) of the Exchange Act.
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    \9\ The Exchange represents that should the Index Sponsor 
replace or delete the current Index components, the Exchange will 
submit a rule filing, for Commission approval, pursuant to Section 
19(b) of the Exchange Act. Telephone conversation between Jeffrey 
Burns, Associate General Counsel, Amex, and Florence Harmon, Senior 
Special Counsel, Division of Market Regulation, Commission, on 
January 10, 2006.
    \10\ The Exchange notes that this is similar to the case for 
index options when prices are unavailable or unreliable. Article 
XVII, Section 4 of OCC's By-Laws permits it to use the prior day's 
closing price to fix an index option's exercise settlement value. In 
addition, OCC may also use the next day's opening price, a price or 
value at such other time as determined by OCC or an average of 
prices or values as determined by OCC.
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    The Managing Owner has represented that it will seek to arrange to 
have the Index calculated and disseminated on a daily basis through a 
third party if DB London ceases to calculate and disseminate the Index. 
If, however, the Managing Owner is unable to arrange the calculation 
and dissemination of the Index (or a Successor Index), the Exchange 
will undertake to delist the Shares.\11\
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    \11\ If the Index is discontinued or suspended, Managing Owner, 
in its sole discretion, may substitute the Index with an index 
substantially similar to the discontinued or suspended Index (the 
``Successor Index''). The Successor Index may be calculated and/or 
published by any other third party. The Exchange represents that if 
a successor or substitute Index is used by the Managing Owner, the 
Exchange will file a proposed rule change pursuant to Rule 19b-4 
under the Exchange Act to address, among other things, the listing 
and trading characteristics of the successor or substitute index and 
the Exchange's surveillance procedures applicable to the successor 
or substitute index. See also infra note 32 and accompanying text.
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IV. Commodity Futures Contracts and Related Options

    The Index Sponsor will calculate each day the closing level of the 
Index on the basis of the closing prices for the futures contracts on 
the relevant primary markets, indicated below.
    Crude Oil. Crude oil is the world's most actively traded commodity. 
The Light Sweet Crude Oil futures contract traded on the New York 
Mercantile Exchange (``NYMEX'') is the world's most liquid forum for 
crude oil trading, as well as the world's most liquid futures contract 
on a physical commodity.\12\ Due to the excellent liquidity and price 
transparency of the futures contract, it is used as a principal 
international pricing benchmark.
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    \12\ In 2004, ADTV on NYMEX for futures contracts on light sweet 
crude oil were 212,382 (with each contract representing 1,000 
barrels); ADTV through August 2005 was 241,673. Annual contracts 
traded on NYMEX on light sweet crude oil in 2004 were 52.8 million; 
annual contracts traded through August 2005 were 40.6 million.
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    Heating Oil. The heating oil futures contract, listed and traded at 
the NYMEX, trades in units of 42,000 gallons (1,000 barrels) and is 
based on delivery in New York harbor, the principal cash market 
center.\13\ The heating oil futures contract is also used to hedge 
diesel fuel and jet fuel, both of which trade in the cash market at an 
often stable premium to the heating oil futures contract.
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    \13\ In 2004, ADTV on NYMEX for futures contracts on heating oil 
were 51,745 (with each contract representing 1,000 barrels); ADTV 
through August 2005 was 52,413. Annual contracts traded on NYMEX on 
heating oil in 2004 were 12.8 million; annual contracts traded 
through August 2005 were 8.8 million.
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    Gold. NYMEX is the world's largest physical commodity futures 
exchange and the dominant market for the trading of energy and precious 
metals.\14\
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    \14\ In 2004, ADTV on NYMEX for futures contracts on gold were 
60,079 (with each contract representing 100 troy ounces); ADTV 
through August 2005 was 61,085. Annual contracts traded on NYMEX on 
gold in 2004 were 14.9 million; annual contracts traded through 
August 2005 were 10.2 million.
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    Aluminum. Aluminum is the most heavily produced and consumed non-
ferrous metal in the world. Its low density and malleability has been 
recognized and championed by the industrial world. In 2001, world 
primary refined production totaled over 24 million tonnes. The total 
turnover for the London Metal Exchange (``LME'') primary aluminum 
futures and options in 2001 was over 25 million lots or 625 million 
tonnes. The LME has the most liquid aluminum contracts in the 
world.\15\
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    \15\ In 2004, ADTV on LME for futures contracts on aluminum were 
116,004 (with each contract representing 25 tonnes); ADTV through 
August 2005 was 113,743. Annual contracts traded on LME on aluminum 
in 2004 were 29.2 million; annual contracts traded through August 
2005 were 18.9 million.
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    Corn. Corn futures are traded on the Chicago Board of Trade 
(``CBOT'') with a unit of trading of 5,000 bushels.\16\
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    \16\ In 2004, ADTV on CBOT for futures contracts on corn were 
95,390 (with each contract representing 5,000 bushels); ADTV through 
August 2005 was 120,237. Annual contracts traded on CBOT on corn in 
2004 were 24.038 million; annual contracts traded through August 
2005 were 20.19 million.
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    Wheat. Wheat futures are traded on the CBOT with a unit of trading 
of 5,000 bushels.\17\
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    \17\ In 2004, ADTV on CBOT for futures contracts on wheat were 
31,568 (with each contract representing 5,000 bushels); ADTV through 
August 2005 was 41,249. Annual contracts traded on CBOT on wheat in 
2004 were 7.95 million; annual contracts traded through August 2005 
were 6.92 million.
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V. Structure of the Fund

    Fund. The Fund is a statutory trust formed pursuant to the Delaware 
Statutory Trust Act and will issue units of beneficial interest or 
shares that represent units of fractional undivided beneficial interest 
in and ownership of the Fund. Unless terminated earlier, the Fund will 
expire on December 31, 2055. The investment objective of the Fund is to 
reflect the performance of the DBLCI less the expenses of the operation 
of the Fund and the Master Fund. The Fund will pursue its investment 
objective by investing substantially all of its assets in the Master 
Fund. The Fund will hold no investment assets other than Master Fund 
Units.\18\ Each Share will correlate with a Master Fund share issued by 
the Master Fund and held by the Fund.
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    \18\ See Pre-Effective Amendment No. 4 to the Fund's Form S-1, 
Registration No. 333-125325, dated October 26, 2005.
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    Master Fund. The Master Fund is a statutory trust formed pursuant 
to the Delaware Statutory Trust Act and will issue units of beneficial 
interest or shares that represent units of fractional undivided 
beneficial interest in and ownership of the Master Fund. Unless 
terminated earlier, the Master Fund will expire on December 31, 2055. 
The investment objective of the Master Fund is to reflect the 
performance of the DBLCI less the expenses of the operations of the 
Fund and the Master Fund. The Master Fund will pursue its investment 
objective by investing primarily in a portfolio of futures contracts on 
the commodities comprising the DBLCI. In addition, the Master Fund will 
also hold cash and U.S. Treasury securities for deposit with futures 
commission merchants (``FCMs'') as margin and other high credit quality 
short-term fixed income securities.
    Trustee. Wilmington Trust Company is the trustee of the Fund and 
the Master Fund. The trustee has delegated to the Managing Owner the 
power and authority to manage and operate the day-to-day affairs of the 
Fund and the Master Fund.
    Managing Owner. The Managing Owner is a Delaware limited liability 
company that will be registered with the CFTC as a commodity pool 
operator and commodity trading advisor and is an affiliate of Deutsche 
Bank AG, the sponsor of the Fund and Master Fund. The Managing Owner 
will serve as the commodity pool operator and commodity trading advisor 
of the Fund and the Master Fund and will manage and control all aspects 
of the business of the Funds.
    Clearing Broker. Deutsche Bank Securities, Inc., the Clearing 
Broker, is an affiliate of the Managing Owner and is registered with 
the CFTC as an FCM. The Clearing Broker will execute and clear each of 
the Master Fund's futures contract transactions and will perform 
certain administrative services for the Master Fund.
    Administrator. The Bank of New York is the administrator for both 
the Fund and the Master Fund (the ``Administrator''). The Administrator 
will perform or supervise the performance of services necessary for the 
operation and administration of the

[[Page 3132]]

Fund and the Master Fund. These services include, but are not limited 
to, investment accounting, financial reporting, broker and trader 
reconciliation, net asset value (``NAV'') calculation,\19\ risk 
transparency, and receiving and processing orders from Authorized 
Participants (as defined below), and coordinating the processing of 
orders with the Managing Owner and the Depository Trust Company 
(``DTC'').
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    \19\ NAV is the total assets of the Master Fund less total 
liabilities of the Master Fund, determined on the basis of generally 
accepted accounting principles. NAV per Master Fund share is the NAV 
of the Master Fund divided by the number of outstanding Master Fund 
shares. This will be the same for the Shares of the Fund because of 
a one-to-one correlation between the Shares and the shares of the 
Master Fund.
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VI. Product Description

A. Creation and Redemption of Shares

    Issuances of the Shares will be made only in baskets of 200,000 
Shares or multiples thereof (the ``Basket Aggregation'' or ``Basket''). 
The Fund will issue and redeem the Shares on a continuous basis, by or 
through participants that have entered into participant agreements 
(each, an ``Authorized Participant'') \20\ with the Fund and its 
Managing Owner at the NAV per Share determined shortly after 4 p.m. 
Eastern Time (``ET'') or the last to close futures exchanges on which 
the Index commodities are traded, whichever is later, on the business 
day on which an order to purchase the Shares in one or more Baskets is 
received in proper form. Following issuance, the Shares will be traded 
on the Exchange similar to other equity securities. The Shares will be 
registered in book entry form through DTC.
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    \20\ 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 DTC 
Participant, and (iii) has in effect a valid Participant Agreement 
with the Fund issuer.
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    The procedures for creating a Basket are as follows. On any 
business day, an Authorized Participant may place an order with the 
Distributor, ALPS Distributors, Inc. (the ``Distributor''), to create 
one or more Baskets. Purchase orders must be placed by 10 a.m. ET and 
are irrevocable. By placing a purchase order, and prior to delivery of 
such Basket(s), an Authorized Participant's DTC account will be charged 
the non-refundable $500 transaction fee due for the purchase order, 
regardless of the number of Baskets to be created in connection with 
such order.
    The total payment required to create a Basket during the continuous 
offering period is the cash amount equal to the NAV per Share times 
200,000 Shares (the ``Basket Amount'') on the purchase order date. 
Thus, the Basket Amount usually will be determined on each business day 
by the Administrator shortly after 4 p.m. ET. Baskets are issued as of 
12 noon ET, on the business day immediately following the purchase 
order date (T+1) at NAV per Share on the purchase order date if the 
required payment has been timely received.
    Authorized Participants that have placed a purchase order to create 
a Basket must transfer the Basket Amount to the Administrator (the 
``Cash Deposit Amount'') by 10 a.m. the next day. Authorized 
Participants that wish to redeem a Basket will be required to 
accumulate enough Shares to constitute a Basket Aggregation (i.e., 
200,000 Shares) and, upon surrender of the Shares and payment of 
applicable redemption transaction fee, taxes or charges, the 
Administrator will deliver to the redeeming Authorized Participant cash 
in exchange for each Basket surrendered in an amount equal to the NAV 
per Basket (the ``Cash Redemption Amount''). The Shares will not be 
individually redeemable but will only be redeemable in Basket 
Aggregations.
    Because orders to purchase Baskets must be placed by 10 a.m. ET, 
but the total payment required to create a Basket will not be 
determined until shortly after 4 p.m. ET, on the date the purchase 
order is properly received, Authorized Participants will not know the 
total amount of the payment required to create a Basket at the time 
they submit an irrevocable purchase order. The Exchange states that 
this is similar to exchange-traded funds and mutual funds. The Fund's 
prospectus discloses that NAV and the total amount of the payment 
required to create a Basket could rise or fall substantially between 
the time an irrevocable purchase order is submitted and the time the 
amount of the purchase order is determined.
    On each business day, the Administrator will make available 
immediately prior to the opening of trading on the Amex, an estimate of 
the Cash Deposit Amount for the creation of a Basket. The Amex will 
disseminate every 15 seconds throughout the trading day, via the 
facilities of the Consolidated Tape Association (``CTA''), an amount 
representing, on a per Share basis, the current value (intra-day) of 
the Basket Amount (the ``Indicative Fund Value''). It is anticipated 
that the deposit of the Cash Deposit Amount in exchange for a Basket 
will be made primarily by institutional investors, arbitrageurs, and 
the Exchange specialist. Baskets are then separable upon issuance into 
identical Shares that will be listed and traded on the Amex.\21\ The 
Shares are expected to be traded on the Exchange by professionals, as 
well as institutional and retail investors. Shares may be acquired in 
two (2) ways: (1) Through a deposit of the Cash Deposit Amount with the 
Administrator during normal business hours by Authorized Participants, 
or (2) through a purchase on the Exchange by investors.
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    \21\ The Shares are separate and distinct from the shares of the 
Master Fund. The Master Fund's assets will consist of long positions 
in the futures contracts on the commodities comprising the DBLCI. 
The Exchange expects that the number of outstanding Shares will 
increase and decrease from time to time as a result of creations and 
redemptions of Baskets.
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B. Net Asset Value

    Shortly after 4 p.m. ET each business day, the Administrator will 
determine the NAV for the Fund and Master Fund, utilizing the current 
day's settlement value of the particular commodity futures contracts in 
the Master Fund's portfolio and the value of the Master Fund's cash and 
high-credit quality, short-term fixed income securities. However, if a 
futures contract on a trading day cannot be liquidated due to the 
operation of daily limits or other rules of an exchange upon which such 
futures contract is traded, the settlement price on the most recent 
trading day on which the futures contract could have been liquidated 
will be used in determining the Fund's and the Master Fund's NAV. 
Accordingly, for both U.S. and non-U.S. futures contracts, the 
Administrator will typically use that day's futures settlement price 
for determining NAV.
    The NAV for the Fund is total assets of the Master Fund less total 
liabilities of the Master Fund. The NAV is calculated by including any 
unrealized profit or loss on futures contracts and any other credit or 
debit accruing to the Master Fund but unpaid or not received by the 
Master Fund. This preliminary NAV is then used to compute all NAV-based 
fees (including the management and administrative fees, accrued through 
and including the date of publication) that are calculated from the 
value of Master Fund assets. The Administrator will calculate the NAV 
per Share by dividing the NAV by the number of Shares outstanding. Then 
once the final, published NAV is determined, shortly after 4 p.m. ET 
each business day, the Administrator also will determine the Basket 
Amount for orders placed by Authorized Participants received by 10 a.m. 
ET that day.

[[Page 3133]]

    Shortly after 4 p.m. ET each business day, the Administrator, Amex, 
and Managing Owner will disseminate the NAV for the Shares and the 
Basket Amount (for orders placed during the day). The NAV and the 
Basket Amount are available to all market participants at the same time 
and will be disseminated accordingly. The Basket Amount and the NAV are 
communicated by the Administrator to all Authorized Participants via 
facsimile or electronic mail message and will be publicly available on 
the Fund's Web site at http://www.dbcfund.db.com The Amex will also publicly disclose via its Web site at http://www.amex.com. the NAV and 

Basket Amount (for orders placed that day). The Exchange also will 
disseminate the Basket Amount by means of CTA/CQ High Speed Lines.
    The Exchange stated that it believes that the Shares will not trade 
at a material discount or premium to NAV due to potential arbitrage 
opportunities in the event of any discrepancy between the two. Due to 
the fact that the Shares can be created and redeemed daily only in 
Basket Aggregations at NAV by Authorized Participants, the Exchange 
submitted that arbitrage opportunities should provide a mechanism to 
diminish the effect of any premiums or discounts that may exist from 
time to time.

C. Dissemination of the Index and Underlying Futures Contracts 
Information

    DB London as the Sponsor of the Index will publish the value of the 
Index at least every fifteen (15) seconds during Amex trading hours 
through Bloomberg, Reuters, and other market data vendors. In addition, 
the Index value will be available on the DB London (Sponsor) Web site 
at https://index.db.com and Fund's Web site at http://www.dbcfund.db.com
 on a twenty (20) minute delayed basis.\22\ The 

closing Index level will similarly be provided by DB London and the 
Fund. In addition, any adjustments or changes to the Index will also be 
provided by DB London and the Fund on their respective Web sites.\23\
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    \22\ Amex will provide a hyperlink from its Web site to the 
Fund's Web site (http://www.dbcfund.db.com) and the DB London Web 

site (https://index.db.com). Telephone conversation between Jeffrey 

Burns, Associate General Counsel, Amex, and Florence Harmon, Senior 
Special Counsel, Division of Market Regulation, Commission, on 
January 11, 2006.
    \23\ The Index Sponsor has in place procedures to prevent the 
improper sharing of information between different affiliates and 
departments. Specifically, an information barrier exists between the 
personnel within DB London that calculate and reconstitute the Index 
and other personnel of the Index Sponsor, including but not limited 
to the Managing Owner, sales and trading, external or internal fund 
managers, and bank personnel who are involved in hedging the bank's 
exposure to instruments linked to the Index, in order to prevent the 
improper sharing of information relating to the recomposition of the 
Index. The index is not calculated by a broker-dealer. Telephone 
conversation between Jeffrey Burns, Associate General Counsel, Amex, 
and Florence Harmon, Senior Special Counsel, Division of Market 
Regulation, Commission, on January 11, 2006.
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    The closing prices and daily settlement prices for the futures 
contracts held by the Master Fund are publicly available on the Web 
sites of the futures exchanges trading the particular contracts. The 
particular futures exchange for each futures contract with Web site 
information is as follows: (i) Aluminum--London Metal Exchange (LME) at 
http://www.lme.com; (ii) corn and wheat--Chicago Board of Trade (CBOT) at http://www.cbot.com; and (iii) crude oil, heating oil and gold--New 

York Mercantile Exchange (NYMEX) at http://www.nymex.com The Exchange on its Web site at http://www.amex.com. will include a hyperlink to the 

Index Sponsor's Web site at https://index.db.com, which will contain 

hyperlinks to each of the futures exchanges Web sites for the purpose 
of disclosing futures contract pricing. In addition, various data 
vendors and news publications publish futures prices and data. The 
Exchange has represented that futures quotes and last sale information 
for the commodities underlying the Index are widely disseminated 
through a variety of market data vendors worldwide, including Bloomberg 
and Reuters. In addition, the Exchange has represented that complete 
real-time data for such futures is available by subscription from 
Reuters and Bloomberg. The CBOT, LME, and NYMEX also provide delayed 
futures information on current and past trading sessions and market 
news free of charge on their respective Web sites. The specific 
contract specifications for the futures contracts are also available 
from the futures exchanges on their Web sites as well as other 
financial informational sources.

D. Availability of Information Regarding the Shares

    The Web site for the Fund (http://www.dbcfund.db.com), which will 

be publicly accessible at no charge, will contain the following 
information: (a) The prior business day's NAV and the reported closing 
price; (b) the mid-point of the bid-ask price \24\ in relation to the 
NAV as of the time the NAV is calculated (the ``Bid-Ask Price''); (c) 
calculation of the premium or discount of such price against such NAV; 
(d) data in chart form displaying the frequency distribution of 
discounts and premiums of the Bid-Ask Price against the NAV, within 
appropriate ranges for each of the four (4) previous calendar quarters; 
(e) the prospectus; and (f) other applicable quantitative information.
---------------------------------------------------------------------------

    \24\ The bid-ask price of Shares is determined using the highest 
bid and lowest offer as of the time of calculation of the NAV.
---------------------------------------------------------------------------

    As described above, the NAV for the Fund will be calculated and 
disseminated daily. The Amex also intends to disseminate, during Amex 
trading hours, for the Fund on a daily basis by means of CTA/CQ High 
Speed Lines information with respect to the Indicative Fund Value (as 
discussed below), recent NAV, and Shares outstanding. The Exchange will 
also make available on its Web site daily trading volume, closing 
prices, and the NAV.

E. Dissemination of Indicative Fund Value

    As noted above, the Administrator calculates the NAV of the Fund 
once each trading day. In addition, the Administrator causes to be made 
available on a daily basis the Cash Deposit Amount to be deposited in 
connection with the issuance of the Shares in Basket Aggregations. In 
addition, other investors can request such information directly from 
the Administrator.
    In order to provide updated information relating to the Fund for 
use by investors, professionals, and persons, the Exchange will 
disseminate through the facilities of CTA an updated Indicative Fund 
Value. The Indicative Fund Value will be disseminated on a per Share 
basis at least every 15 seconds from 9:30 a.m. to 4:15 p.m. ET.\25\ The 
Indicative Fund Value will be calculated based on the cash required for 
creations and redemptions (i.e., NAV x 200,000) adjusted to reflect the 
price changes of the Index commodities through investments held by the 
Master Fund, i.e., futures contracts.
---------------------------------------------------------------------------

    \25\ Telephone conversation between Jeffrey Burns, Associate 
General Counsel, Amex, and Kate Robbins, Attorney, Division of 
Market Regulation, Commission, on November 28, 2005.
---------------------------------------------------------------------------

    The Indicative Fund Value will not reflect price changes to the 
price of an underlying commodity between the close of trading of the 
futures contract at the relevant futures exchange and the close of 
trading on the Amex at 4:15 p.m. ET. The value of a Share may 
accordingly be influenced by non-concurrent trading hours between the 
Amex and the various futures exchanges on which the futures contracts 
based on the Index commodities are traded.

[[Page 3134]]

While the Shares will trade on the Amex from 9:30 a.m. to 4:15 p.m. ET, 
the table below lists the trading hours for each of the Index 
commodities underlying the futures contracts.

----------------------------------------------------------------------------------------------------------------
            Index commodity                      Futures exchange                   Trading hours (ET)
----------------------------------------------------------------------------------------------------------------
Aluminum...............................  LME............................  6:55 a.m.-12:00 p.m.
Gold...................................  COMEX..........................  8:20 a.m.-1:30 p.m.
Crude Oil..............................  NYMEX..........................  10:00 a.m.-2:30 p.m.
Heating Oil............................  NYMEX..........................  10:05 a.m.-2:30 p.m.
Corn...................................  CBOT...........................  10:30 a.m.-2:15 p.m.
Wheat..................................  CBOT...........................  10:30 a.m.-2:15 p.m.
----------------------------------------------------------------------------------------------------------------

    While the market for futures trading for each of the Index 
commodities is open, the Indicative Fund Value can be expected to 
closely approximate the value per Share of the Basket Amount. However, 
during Amex trading hours when the futures contracts have ceased 
trading, spreads and resulting premiums or discounts may widen, and 
therefore, increase the difference between the price of the Shares and 
the NAV of the Shares. Indicative Fund Value on a per Share basis 
disseminated during Amex trading hours should not be viewed as a real 
time update of the NAV, which is calculated only once a day.
    The Exchange stated that it believes that dissemination of the 
Indicative Fund Value based on the cash amount required for a Basket 
Aggregation provides additional information that is not otherwise 
available to the public and is useful to professionals and investors in 
connection with the Shares trading on the Exchange or the creation or 
redemption of the Shares.

VII. Criteria for Initial and Continued Listing

    The Fund will be subject to the criteria in proposed Commentary 
.07(d) of Amex Rule 1202 for initial and continued listing of the 
Shares. The proposed continued listing criteria provides for the 
delisting or removal from listing of the Shares under any of the 
following circumstances:
     Following the initial twelve month period from the date of 
commencement of trading of the Shares: (i) If the Fund 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; (ii) if the Fund has fewer than 50,000 Shares issued and 
outstanding; or (iii) if the market value of all Shares is less than 
$1,000,000.
     If the value of the underlying index or portfolio is no 
longer calculated or available on at least a 15-second basis through 
one or more major market data vendors during the time the Shares trade 
on the Exchange.
     The Indicative Fund Value is no longer made available on 
at least a 15-second basis.
     If such other event shall occur or condition exists which 
in the opinion of the Exchange makes further dealings on the Exchange 
inadvisable.
    It is anticipated that a minimum of 2,000,000 Shares will be 
required to be outstanding at the start of trading. It is anticipated 
that the initial price of a Share will be approximately $25. The Fund 
expects to accept subscriptions for Shares in Basket Aggregations 
(i.e., $5 million) from Authorized Participants during an initial 
offering period with a finite term of approximately six (6) months, 
subject to earlier termination. After the initial offering period has 
closed and trading commences, the Fund will then issue Shares in the 
normal Basket Aggregations of 200,000 Shares to Authorized 
Participants. Once the initial offering period has closed and trading 
commences, the Master Fund will issue shares in Master Fund Baskets 
(200,000 shares) to the Fund continuously at NAV. The Master Fund will 
be owned by the Fund and the Managing Owner.\26\ Each Share issued by 
the Fund will correlate with a Master Fund share issued by the Master 
Fund and held by the Fund. The Exchange stated that it believes that 
the anticipated minimum number of Shares outstanding at the start of 
trading is sufficient to provide adequate market liquidity and to 
further the Fund's objective to seek to provide a simple and cost 
effective means of accessing the commodity futures markets.
---------------------------------------------------------------------------

    \26\ The Managing Owner will own 1% or less of the Master Fund 
and will share pro rata in the income and expenses of the Master 
Fund.
---------------------------------------------------------------------------

    The Exchange has represented that it prohibits the initial and/or 
continued listing of any security that is not in compliance with Rule 
10A-3 under the Exchange Act.\27\
---------------------------------------------------------------------------

    \27\ See Rule 10A-3(c)(7), 17 CFR 240.10A-3(c)(7) (stating that 
a listed issuer is not subject to the requirements of Rule 10A-3 if 
the issuer is organized as a trust or other unincorporated 
association that does not have a board of directors and the 
activities of the issuer are limited to passively owning or holding 
securities or other assets on behalf of or for the benefit of the 
holders of the listed securities).
---------------------------------------------------------------------------

VIII. Trading Rules

    The Shares are equity securities subject to Amex Rules governing 
the trading of equity securities, including, among others, rules 
governing priority, parity and precedence of orders, specialist 
responsibilities and account opening and customer suitability (Amex 
Rule 411). Initial equity margin requirements of 50% will apply to 
transactions in the Shares. Shares will trade on the Amex until 4:15 
p.m. ET each business day \28\ and will trade in a minimum price 
variation of $0.01 pursuant to Amex Rule 127. Trading rules pertaining 
to odd-lot trading in Amex equities (Amex Rule 205) will also apply.
---------------------------------------------------------------------------

    \28\ Commentary .01, .02, and .03 to Exchange Rule 1200 are 
applicable to transactions in the Shares, however, the Shares will 
trade from 9:30 a.m. to 4:15 p.m. each business day. Telephone 
conversation between Jeffrey Burns, Associate General Counsel, Amex, 
and Florence Harmon, Senior Special Counsel, Division of Market 
Regulation, Commission, on January 11, 2006.
---------------------------------------------------------------------------

    The Amex original listing fee applicable to the listing of the Fund 
is $5,000. In addition, the annual listing fee applicable under Section 
141 of the Amex Company Guide will be based upon the year-end aggregate 
number of Shares in all series of the Fund outstanding at the end of 
each calendar year.
    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 Amex Rule 950(f) and Commentary thereto) the price of which 
is derivatively 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 the 
Shares as eligible for this treatment.\29\
---------------------------------------------------------------------------

    \29\ 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).

---------------------------------------------------------------------------

[[Page 3135]]

    The Shares will be deemed ``Eligible Securities,'' as defined in 
Amex Rule 230, for purposes of the Intermarket Trading System Plan and 
therefore will be subject to the trade through provisions of Amex Rule 
236 which require that Amex members avoid initiating trade-throughs for 
ITS securities.
    Specialist transactions of the Shares made in connection with the 
creation and redemption of Shares will not be subject to the 
prohibitions of Amex Rule 190.\30\ Unless exemptive or no-action relief 
is available, the Shares will be subject to the short sale rule, Rule 
10a-1 and Regulation SHO under the Act.\31\ If exemptive or no-action 
relief is provided, the Exchange will issue a notice detailing the 
terms of the exemption or relief. The Shares will generally be subject 
to the Exchange's stabilization rule, Amex Rule 170, except that 
specialists may buy on ``plus ticks'' and sell on ``minus ticks,'' in 
order to bring the Shares into parity with the underlying commodity or 
commodities and/or futures contract price. Proposed Commentary .07(f) 
to Amex Rule 1202 sets forth this limited exception to Amex Rule 170 to 
bring the Shares into parity with the underlying Index.
---------------------------------------------------------------------------

    \30\ See Commentary .05 to Amex Rule 190.
    \31\ The Fund expects to seek relief, in the near future, from 
the Commission in connection with the trading of the Shares from the 
operation of certain Exchange Act Rules.
---------------------------------------------------------------------------

    The adoption of Commentary .07(e) to Amex Rule 1202 relating to 
certain specialist prohibitions will address potential conflicts of 
interest in connection with acting as a specialist in the Shares. 
Specifically, Commentary .07(e) provides that the prohibitions in Amex 
Rule 175(c) apply to a specialist in the Shares so that the specialist 
or affiliated person may not act or function as a market maker in an 
underlying asset, related futures contract or option or any other 
related derivative. An affiliated person of the specialist consistent 
with Amex Rule 193 may be afforded an exemption to act in a market 
making capacity, other than as a specialist in the Shares on another 
market center, in the underlying asset, related futures or options or 
any other related derivative. In particular, proposed Commentary .07(e) 
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 member organization, and any member, officer, or 
employee associated therewith, may act in a market making capacity, 
other than as a specialist in the Shares on another market center, in 
the underlying asset or commodity, related futures or options on 
futures, or any other related derivatives.
    Adoption of Commentary .07(g) to Amex Rule 1202 will also ensure 
that specialists handling the Shares provide the Exchange with all the 
necessary information relating to their trading in physical assets or 
commodities, related futures contracts and options thereon or any other 
derivative. 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 
commodities or futures contracts 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.

IX. Trading Halts

    Prior to the commencement of trading, the Exchange will issue an 
Information Circular (described below) to members informing them of, 
among other things, Exchange policies regarding trading halts in the 
Shares. First, the circular will advise that trading will be halted in 
the event the market volatility trading halt parameters set forth in 
Amex Rule 117 have been reached. Second, the circular will advise that, 
in addition to the parameters set forth in Amex Rule 117, the Exchange 
will halt trading in the Shares if trading in the underlying related 
futures contract(s) is halted or suspended. Third, with respect to a 
halt in trading that is not specified above, the Exchange may also 
consider other relevant factors and the existence of unusual conditions 
or circumstances that may be detrimental to the maintenance of a fair 
and orderly market. Additionally, the Exchange has represented that it 
will cease trading the Shares if the conditions in Commentary 
.07(d)(2)(ii) or (iii) to Amex Rule 1202 exist (i.e., if there is a 
halt or disruption in the dissemination of the Indicative Fund Value 
and/or underlying Index value).\32\
---------------------------------------------------------------------------

    \32\ In the event the Index value or Indicative Fund Value is no 
longer calculated or disseminated, the Exchange would immediately 
contact the Commission to discuss measures that may be appropriate 
under the circumstances. Telephone conversation between Jeffrey 
Burns, Associate General Counsel, Amex, and Florence Harmon, Senior 
Special Counsel, Division of Market Regulation, Commission, on 
November 22, 2005.
---------------------------------------------------------------------------

X. Suitability

    The Information Circular (described below) will inform members and 
member organizations of the characteristics of the Fund and of 
applicable Exchange rules, as well as of the requirements of Amex Rule 
411 (Duty to Know and Approve Customers).
    The Exchange noted that pursuant to Amex Rule 411, members and 
member organizations are required in connection with recommending 
transactions in the Shares to have a reasonable basis to believe that a 
customer is suitable for the particular investment given reasonable 
inquiry concerning the customer's investment objectives, financial 
situation, needs, and any other information known by such member.

XI. Information Circular

    The Amex will distribute an Information Circular to its members in 
connection with the trading of the Shares. The Information Circular 
will inform members and member organizations, prior to commencement of 
trading, of the prospectus delivery requirements applicable to the 
Fund. The Exchange noted that investors purchasing Shares directly from 
the Fund (by delivery of the Cash Deposit Amount) will receive a 
prospectus. Amex members purchasing Shares from the Fund for resale to 
investors will deliver a prospectus to such investors.
    The Information Circular also will discuss the special 
characteristics and risks of trading this type of security. 
Specifically, the Information Circular, among other things, will 
discuss what the Shares are, how a Basket is created and redeemed, the 
requirement that members and member firms deliver a prospectus to 
investors purchasing the Shares prior to or concurrently with the 
confirmation of a transaction, applicable Amex rules, dissemination of 
information regarding the per Share Indicative Fund Value, trading 
information and applicable suitability rules. The Information Circular 
will also explain that the Fund is subject to various fees and expenses 
described in the registration statement.
    The Information Circular will also reference the fact that there is 
no regulated source of last sale information regarding physical 
commodities and that the SEC has no jurisdiction over the trading of 
physical commodities such as

[[Page 3136]]

aluminum, gold, crude oil, heating oil, corn and wheat, or the futures 
contracts on which the value of the Shares is based.
    The Information Circular will also notify members and member 
organizations about the procedures for purchases and redemptions of 
Shares in Baskets and that Shares are not individually redeemable but 
are redeemable only in Basket-size aggregations or multiples thereof. 
The Information Circular will also discuss any relief, if granted, by 
the Commission or the staff from any rules under the Act.
    The Information Circular will disclose that the NAV for Shares will 
be calculated shortly after 4 p.m. ET each trading day and that other 
information will be publicly available about the Shares and underlying 
Index.

XII. Surveillance

    The Exchange has represented that its surveillance procedures are 
adequate to monitor Exchange trading of the Shares and to detect 
violations of applicable rules and regulations. Exchange surveillance 
procedures applicable to trading in the proposed Shares will be similar 
to those applicable to TIRs, Portfolio Depository Receipts and Index 
Fund Shares currently trading on the Exchange. The Exchange currently 
has in place an Information Sharing Agreement with the NYMEX and the 
CBOT for the purpose of providing information in connection with 
trading in or related to futures contracts traded on the NYMEX and 
CBOT, respectively. The Exchange also noted that the CBOT is a member 
of the Intermarket Surveillance Group (``ISG''). As a result, the 
Exchange has asserted that market surveillance information is available 
from the CBOT, if necessary, due to regulatory concerns that may arise 
in connection with the CBOT futures. In addition, the Exchange has 
negotiated a Memorandum of Understanding with the LME for the purpose 
of providing information in connection with the trading in or related 
to futures contracts traded on the LME.

XIII. Discussion and Commission's Findings

    After careful consideration, 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.\33\ In particular, the Commission finds that the 
proposed rule change, as amended, is consistent with the requirements 
of Section 6(b)(5) of the Act,\34\ which requires, among other things, 
that the Exchange's rules be designed 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.
---------------------------------------------------------------------------

    \33\ In approving this proposed rule change, the Commission 
notes that it has cnsidered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78(c)(f).
    \34\ 15 U.S.C. 78(f)(b)(5).
---------------------------------------------------------------------------

A. Surveillance

    Information sharing agreements with primary markets trading index 
components underlying a derivative product are an important part of a 
self-regulatory organization's ability to monitor for trading abuses in 
derivative products. The Commission believes that the Exchange's 
Information Sharing Agreement with the NYMEX and the CBOT and the 
Exchange's Memorandum of Understanding with the LME, along with the 
Exchange's participation in the ISG, in which the CBOT participates, 
and Commentaries .07(e), (g)(1), (g)(2) and (g)(3) to Amex Rule 1202, 
create the basis for the Amex to monitor for fraudulent and 
manipulative practices in the trading of the Shares.
    In particular, Commentaries .07(g)(1) and (g)(2) to Amex Rule 1202 
require that the specialist handling the Shares provide the Exchange 
with information relating to its trading in the Shares and the accounts 
of the member organization acting as specialist, member organization, 
or approved person of such member organization in the Index components, 
related futures or options on futures, or any other related 
derivatives. Commentary .07(g)(3) to Amex Rule 1202 also prohibits the 
specialist in the Shares from using 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 Index commodities, related futures or options on futures, or any 
other related derivatives. In addition, Commentary .07(e) to Amex Rule 
1202 prohibits the specialist in the Shares from being affiliated with 
a market maker in the Index commodities, related futures or options on 
futures, or any other related derivatives, unless information barriers 
are in place that satisfy the requirements of Amex Rule 193. 
Furthermore, as noted above, the Exchange has represented that: (i) its 
surveillance procedures are adequate to monitor Exchange trading of the 
Shares and to detect violations of applicable rules and regulations; 
and (ii) Exchange surveillance procedures applicable to trading in the 
proposed Shares will be similar to those applicable to TIRs, Portfolio 
Depository Receipts and Index Fund Shares currently trading on the 
Exchange. Accordingly, the Commission believes that the Amex can 
adequately surveil trading in the Shares.

B. Dissemination of Information

    The Commission believes that sufficient venues for obtaining 
reliable futures contract price information exist so that investors in 
the Shares can monitor the underlying futures contract markets relative 
to the NAV of their Shares. There is a considerable amount of futures 
contract price and market information available through public Web 
sites and professional subscription services, including Bloomberg and 
Reuters. In addition, the futures exchanges for the futures contracts 
held by the Master Fund each have their own Web sites, which will be 
able to be reached directly from hyperlinks on the Index Sponsor's Web 
site (https://index.db.com).

    The Commission notes that information about the Index is also 
widely available. The Index Sponsor, DB London, will publish the value 
of the Index at least every 15 seconds during Amex trading hours 
through Bloomberg, Reuters, and other market data vendors, and the 
Fund's Web site (http://www.dbcfund.db.com) and the Index Sponsor's Web 

site (https://index.db.com) will publish the value of the Index on a 20 

minute delayed basis.
    The Commission further notes that information about the Shares will 
also be widely available. The Exchange will disseminate via the CTA/CQ 
High Speed Lines the NAV, Basket Amount, Shares outstanding and the 
Indicative Fund Value, which will be disseminated every 15 seconds 
during Amex trading hours, and will display the NAV, Basket Amount, 
daily trading volume and closing prices on the Exchange's Web site 
(http://www.amex.com). In addition, the NAV and Basket Amount will be available on the Fund's Web site (http://www.dbcfund.db.com). As 

described in detail above, the Fund's Web site, which will be publicly 
accessible at no charge, will contain useful information, including a 
copy of the prospectus. The Commission believes that the wide 
availability of information about the underlying futures contracts, the 
Index and the Shares will facilitate transparency with respect to the 
proposed Shares and diminish the risk of manipulation or unfair 
informational advantage.

[[Page 3137]]

C. Listing and Trading

    The Commission finds that the Exchange's proposed rules and 
procedures for the listing and trading of the proposed Shares are 
consistent with the Act. Shares will trade as equity securities subject 
to Amex rules including, among others, rules governing priority, parity 
and precedence of orders, specialist responsibilities, account opening 
and customer suitability requirements. The Commission believes that the 
listing and delisting criteria for the Shares should help to maintain a 
minimum level of liquidity and therefore minimize the potential for 
manipulation of the Shares. Finally, the Commission notes that the 
Information Circular the Exchange will distribute will inform members 
and member organizations about the terms, characteristics and risks in 
trading the Shares, including their prospectus delivery obligations.

D. Accelerated Approval of the Proposed Rule Change, as Amended by 
Amendment Nos. 1 and 2 Thereto, and Accelerated Approval of Amendment 
Nos. 3 and 4 Thereto

    The Commission finds good cause for approving the proposed rule 
change, as amended by Amendment Nos. 1 and 2, prior to the 30th day 
after the date of publication of the notice of filing thereof in the 
Federal Register. The Exchange has requested the Commission to approve 
the proposal, as amended by Amendment Nos. 1 and 2, on an accelerated 
basis, after a 15-day comment period, to enable investors to begin 
trading the Shares promptly. The Commission notes that the proposed 
rule change, as amended by Amendment Nos. 1 and 2, was noticed for a 
15-day comment period and no comments were received. Therefore, the 
Commission finds good cause, consistent with Section 19(b)(2) of the 
Act,\35\ to approve the proposal, as amended by Amendment Nos. 1 and 2, 
on an accelerated basis.
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission finds good cause for approving Amendment Nos. 3 and 
4 to the proposed rule change prior to the 30th day after the date of 
publication of the notice of filing thereof in the Federal Register. 
The Exchange has requested the Commission to approve Amendment Nos. 3 
and 4 \36\ on an accelerated basis so that approval of the proposal is 
not unnecessarily delayed. In Amendment No. 3, the Exchange made 
clarifying changes to the purpose section regarding adjustments to the 
Index, specifically indicating the Index Sponsor will use the prior 
day's futures price or, in exceptional cases, the ``fair value'' price 
if futures prices are not available. In addition, the Exchange stated 
that it would submit a rule filing pursuant to Section 19(b) of the 
Exchange Act if the use of a prior day's price or ``fair value'' 
pricing for an Index commodity or commodities is more than of a 
temporary nature or if a successor or substitute Index is used by the 
Managing Owner. Amendment No. 4 clarifies that the Index value will be 
disseminated through one or more major market data vendors at least 
every 15 seconds during the time the Shares trade on Amex. The 
Commission notes that the changes contained in Amendment Nos. 3 and 4 
are necessary to clarify the proposal. Accordingly, the Commission 
finds good cause, consistent with Section 19(b)(2) of the Act,\37\ to 
approve Amendment Nos. 3 and 4 on an accelerated basis.
---------------------------------------------------------------------------

    \36\ Telephone conversation between Jeffrey Burns, Associate 
General Counsel, Amex, and Florence Harmon, Senior Special Counsel, 
Division of Market Regulation, Commission, on January 11, 2006 
(requested accelerated approval of Amendment No. 4).
    \37\ Id.
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XIV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment Nos. 3 
and 4 are 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-2005-059 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Amex-2005-059. 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. 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-2005-059 and should be submitted on or before 
February 9, 2006.

XV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
that the proposed rule change (SR-Amex-2005-059), as amended by 
Amendment Nos. 1 and 2, is approved on an accelerated basis and that 
Amendment Nos. 3 and 4 thereto are approved on an accelerated basis.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\38\
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    \38\ 17 CFR 200.30-3(a)(12).

Nancy M. Morris,
Secretary.
 [FR Doc. E6-515 Filed 1-18-06; 8:45 am]

BILLING CODE 8010-01-P
