

[Federal Register: December 13, 2006 (Volume 71, Number 239)]
[Notices]               
[Page 74974]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13de06-82]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54869; File No. SR-NYSEArca-2006-70]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a 
Proposed Rule Change To Extend the Term of Index-Linked Securities

December 4, 2006.
    On October 2, 2006, the NYSE Arca, Inc. (``Exchange), through its 
wholly-owned subsidiary NYSE Arca Equities, Inc. (``NYSE Arca 
Equities''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend NYSE Arca Equities Rule 5.2(j)(6) to 
extend the maximum duration of index-linked securities (``Index-Linked 
Securities'') from ten years to thirty years.\3\ The proposed rule 
change was published for comment in the Federal Register on October 27, 
2006.\4\ The Commission received no comment letters on the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ NYSE Arca Equities Rule 5.2(j)(6) provides for the listing 
and trading of Index-Linked Securities pursuant to Rule 19b-4(e) 
under the Act (the ``generic listing standards'').
    \4\ See Securities Exchange Act Release No. 54636 (October 20, 
2006), 71 FR 63060.
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    NYSE Arca Equities Rule 5.2(j)(6) sets forth criteria that the 
issue and the issuer must meet in order to list and trade Index-Linked 
Securities at the Exchange.\5\ Currently, one of the criteria the 
Exchange considers for the listing and trading of Index-Linked 
Securities, pursuant to NYSE Arca Equities Rule 5.2(j)(6), is that the 
term of the issue must be a minimum term of one year but not greater 
than ten years. Proposed NYSE Arca Equities Rule 5.2(j)(6)(b) would 
extend the duration of the term of the issue from ten years to thirty 
years.
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    \5\ The Exchange may submit a proposed rule change pursuant to 
Section 19(b)(2) of the Act to allow the listing and trading of 
Index-Linked Securities that do not otherwise meet the generic 
listing criteria set forth in NYSE Arca Equities Rule 5.2(j)(6).
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\6\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\7\ which requires, among 
other things, that Exchange rules be 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 facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Amending NYSE Arca Equities Rule 
5.2(j)(6) should provide the Exchange with more flexibility in 
responding to the increased demand from issuers to list and trade 
Index-Linked Securities that are greater than ten years in duration. 
The Commission notes that corporate bonds and other fixed-income 
products historically have been issued with terms of up to, or greater 
than, thirty years.\8\ In addition, the Commission has approved 
amendments to the generic listing standards for equity-linked notes 
that removed the maximum term limits for those securities.\9\
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    \6\ In approving the proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition and capital formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ See also NYSE Arca Equities Rule 5.2(e) setting forth the 
standards for listing debt securities.
    \9\ See Securities Exchange Act Release No. 42110 (November 5, 
1999), 64 FR 61677 (November 12, 1999) (SR-Amex-99-33); 41992 
(October 7, 1999), 64 FR 56007 (October 15, 1999) (SR-NYSE-99-22); 
42313 (January 4, 2000), 65 FR 2205 (January 13, 2000) (SR-CHX-99-
19).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSEArca-2006-70) be, and 
hereby is, approved.
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    \10\ 15 U.S.C. 78f(b)(5).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-21164 Filed 12-12-06; 8:45 am]

BILLING CODE 8011-01-P
