

[Federal Register: December 12, 2007 (Volume 72, Number 238)]
[Notices]               
[Page 70628-70632]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12de07-88]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56910; File No. SR-NASDAQ-2007-071]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change, as Modified by Amendment Nos. 1, 2, and 3 Thereto, 
Relating to Generic Listing and Trading Rules for Securities Linked to 
the Performance of Indexes, Commodities, and Currencies

December 5, 2007.
    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 August 3, 2007, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which items have been substantially prepared by the Exchange. 
On October 5, 2007, the Exchange filed Amendment No. 1 to the proposed 
rule change. On November 29, 2007, the Exchange filed Amendment No. 2 
to the proposed rule change. On December 4, 2007, the Exchange filed 
Amendment No. 3 to the proposed rule change. This order provides notice 
of and approves the proposed rule change, as modified by Amendment Nos. 
1, 2, and 3 thereto, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to: (1) Amend NASDAQ Rule 4420(m) to (a) 
permit the listing and trading of commodity-linked securities 
(``Commodity-Linked Securities,'' and, together with Equity Index-
Linked Securities,\3\ collectively, ``Linked Securities''), and (b) 
conform

[[Page 70629]]

the rule with changes to defined terms, adjustments to certain internal 
cross references, and the equivalent generic listing and trading 
standards for Linked Securities of other national securities exchanges; 
\4\ and (2) make conforming changes to the quantitative maintenance 
criteria under NASDAQ Rule 4450(c). The text of the proposed rule 
change is available at the Exchange, the Commission's Public Reference 
Room, and http://nasdaq.complinet.com.

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    \3\ Currently, NASDAQ Rule 4420(m) relates only to the listing 
and trading of ``Index-Linked Securities'' that provide for the 
payment at maturity of a cash amount based on the performance of an 
underlying index or indexes of equity securities. See NASDAQ Rule 
4420(m). For purposes of the proposed rule change, however, the 
Exchange seeks to modify the name of such securities to be ``Equity 
Index-Linked Securities,'' among other proposed changes described 
herein.
    \4\ See, e.g., Section 703.22 of the New York Stock Exchange LLC 
Listed Company Manual; Sections 107D, 107E, 107F of the American 
Stock Exchange LLC Company Guide; Rule 5.2(j)(6) of NYSE Arca 
Equities, Inc.; and Rule 2130 of the International Securities 
Exchange, LLC.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III below. The Exchange has prepared summaries, set forth in 
sections A, B and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange proposes to: (1) Amend NASDAQ Rule 4420(m) to (a) 
permit the listing and trading of Commodity-Linked Securities pursuant 
to Rule 19b-4(e) under the Act,\5\ and (b) conform the rule with 
changes to defined terms, adjustments to certain internal cross 
references, and the equivalent generic listing and trading standards 
for Linked Securities of other national securities exchanges; and (2) 
make conforming changes to the quantitative maintenance criteria under 
NASDAQ Rule 4450(c).
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    \5\ 17 CFR 240.19b-4(e).
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Generic Listing Standards for Commodity-Linked Securities
    NASDAQ's rules currently permit the listing and trading of Equity 
Index-Linked Securities pursuant to Rule 19b-4(e) under the Act. Rule 
19b-4(e) provides that the listing and trading of a new derivative 
securities product by a self-regulatory organization (``SRO'') shall 
not be deemed a proposed rule change, pursuant to Rule 19b-4(c)(1),\6\ 
if the Commission has approved, pursuant to Section 19(b) of the 
Act,\7\ the SRO's trading rules, procedures, and listing standards for 
the product class that would include the new derivatives securities 
product, and the SRO has a surveillance program for the product class. 
As a result, the Exchange seeks Commission approval to adopt generic 
listing standards under amended NASDAQ Rule 4420(m), pursuant to which 
it would be able to continue to list and trade Equity Index-Linked 
Securities and list and trade Commodity-Linked Securities, in each 
case, without individual Commission approval of each such product. The 
Exchange states that any securities it considers to list and/or trade 
pursuant to NASDAQ Rule 4420(m), as amended, must satisfy the 
applicable standards set forth therein.
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    \6\ 17 CFR 240.19b-4(c)(1).
    \7\ 15 U.S.C. 78s(b).
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    Commodity-Linked Securities are proposed to be defined as 
securities that provide for payment at maturity of a cash amount based 
on the performance of one or more physical Commodities or Commodity 
futures, options or other Commodity derivatives, Commodity-Related 
Securities,\8\ or a basket or index of any of the foregoing (the 
``Reference Asset'').\9\ The Exchange proposes that each Reference 
Asset be must be subject to one of the following requirements:
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    \8\ Under the proposal, the Exchange defines the terms 
``Commodity-Related Security'' and ``Commodity'' by cross 
referencing NASDAQ Rule 4630. NASDAQ Rule 4630 defines ``Commodity-
Related Security'' as a security that is issued by a trust, 
partnership, commodity pool or similar entity that invests, directly 
or through another entity, in any combination of commodities, 
futures contracts, options on futures contracts, forward contracts, 
commodity swaps, or other related derivatives, or the value of which 
is determined by the value of commodities, futures contracts, 
options on futures contracts, forward contracts, commodity swaps, or 
other related derivatives. In addition, under NASDAQ Rule 4630, the 
definition of ``commodity'' adopts the same meaning of such term as 
it is defined in Section 1(a)(4) of the Commodity Exchange Act.
    \9\ As described in more detail herein, the Exchange proposes to 
include one or more ``Currencies'' as possible components of a 
Reference Asset. The Exchange defines ``Currency'' as one or more 
currencies, or currency options, futures, or other currency 
derivatives, Commodity-Related Securities (if any underlying 
Commodities are currencies or currency derivatives), or a basket or 
index of any of the foregoing. See proposed NASDAQ Rule 
4420(m)(8)(B).
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     The Reference Asset to which the security is linked shall 
have been reviewed and approved for the trading of Commodity-Related 
Securities or options or other derivatives by the Commission under 
Section 19(b)(2) of the Act \10\ and rules thereunder and the 
conditions set forth in the Commission's approval order, including with 
respect to comprehensive surveillance sharing agreements, continue to 
be satisfied; \11\ or
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    \10\ 15 U.S.C. 78s(b)(1).
    \11\ See proposed NASDAQ Rule 4420(m)(8)(A).
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     The pricing information for each component of a Reference 
Asset other than a Currency must be derived from a market which is an 
Intermarket Surveillance Group (``ISG'') member or affiliate or with 
which NASDAQ has a comprehensive surveillance sharing agreement. 
Notwithstanding the previous sentence, pricing information for gold and 
silver may be derived from the London Bullion Market Association. The 
pricing information for each component of a Reference Asset that is a 
Currency must be either: (1) The generally accepted spot price for the 
currency exchange rate in question; or (2) derived from a market which 
(a) is an ISG member or affiliate or with which NASDAQ has a 
comprehensive surveillance sharing agreement, and (b) is the pricing 
source for a Currency component of a Reference Asset that has 
previously been approved by the Commission. A Reference Asset may 
include components representing not more than 10% of the dollar weight 
of such Reference Asset for which the pricing information is derived 
from markets that do not meet the foregoing requirements; however, no 
single component subject to this exception may exceed 7% of the dollar 
weight of the Reference Asset.\12\
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    \12\ See proposed NASDAQ Rule 4420(m)(8)(B).

    In addition, the value of the Reference Asset must be calculated 
and widely disseminated on at least a 15-second basis during NASDAQ's 
Regular Market Session, and, in the case of a Commodity-Linked Security 
that is periodically redeemable, the indicative value of the subject 
Commodity-Linked Security must be calculated and widely disseminated by 
one or more major market data vendors on at least a 15-second basis 
during NASDAQ's regular market session.\13\ In the case of Commodity-
Linked Securities, if the Reference Asset value or indicative value (if 
required to be disseminated) is not being disseminated as required, or, 
in the case of Equity Index-Linked Securities, if the value of the 
index is not being disseminated as required, the Exchange may halt 
trading during the course of the day on which such

[[Page 70630]]

interruption occurs and, in any event, will halt trading by the time 
trading begins on the following trading day if the interruption 
persists at such time.\14\
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    \13\ See proposed NASDAQ Rule 4420(m)(9). E-mail from Alex 
Kogan, Associate General Counsel, NASDAQ, to Edward Cho, Special 
Counsel, Division of Trading and Markets, Commission, dated December 
4, 2007 (confirming that the Information Circular will advise that 
additional risks may exist with respect to trading Linked Securities 
on the Exchange during NASDAQ's Pre-Market and Post-Market Sessions, 
when the index or Reference Asset values or indicative values may 
not be disseminated).
    \14\ See proposed NASDAQ Rule 4420(m)(10).
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Conforming Changes to NASDAQ Rule 4420(m)
    The Exchange also proposes to conform NASDAQ Rule 4420(m) to 
reflect the changes made to newly defined terms, adjustments to certain 
internal cross references, and the equivalent generic listing and 
trading standards for Linked Securities of other national securities 
exchanges.\15\ Specifically, the Exchange proposes to make the 
following material changes:
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    \15\ See supra note 4.
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     Currently, NASDAQ Rule 4420(m)(1) provides that the 
minimum number of holders shall not apply if the Linked Security issue 
is traded in $1,000 denominations. The Exchange seeks to amend NASDAQ 
Rule 4420(m)(1) such that, if the Linked Security is traded in $1,000 
denominations or is redeemable at the option of the holders thereof on 
at least a weekly basis, then the minimum number of holders and the 
minimum public distribution of trading units requirements shall not 
apply.\16\
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    \16\ See proposed NASDAQ Rule 4420(m)(1).
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     The Exchange seeks to change the maximum term of a Linked 
Security from 10 years to 30 years.\17\
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    \17\ See proposed NASDAQ Rule 4420(m)(2).
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     The proposal modifies the rebalancing requirement for 
indexes underlying Equity Index-Linked Securities based on the equal-
dollar or modified equal-dollar weighting method from at least 
quarterly to at least semiannually.\18\
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    \18\ See proposed NASDAQ Rule 4420(m)(7)(B)(iii).
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     With respect to Equity Index-Linked Securities, the 
Exchange proposes to establish an exception to the requirement that 90% 
of the underlying index's numerical value and at least 80% of the total 
number of its components meet the then-current criteria for 
standardized options trading. Under the proposal, this requirement 
would no longer be applicable if (a) no underlying component security 
represents more than 10% of the dollar weight of the index, and (b) the 
index has a minimum of 20 components.\19\
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    \19\ See proposed NASDAQ Rule 4420(m)(7)(B)(vi).
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     With respect to Equity Index-Linked Securities, the 
Exchange seeks to clarify the eligibility requirements of components 
comprising the underlying index. Specifically, all component securities 
in an index must either be (A) securities (other than securities of a 
foreign issuer and American Depository Receipts (``ADRs'')) that are 
(i) issued by a reporting company under the Act or an investment 
company registered under the Investment Company Act of 1940, which, in 
each case, has securities listed on a national securities exchange, and 
(ii) an ``NMS stock'' (as defined in Rule 600 of Regulation NMS),\20\ 
or (B) securities of a foreign issuer or ADRs, provided that securities 
of a foreign issuer (including when they underlie ADRs) whose primary 
trading market outside the United States is not a member of ISG or a 
party to a comprehensive surveillance sharing agreement with NASDAQ may 
not, in the aggregate, represent more than 20% of the dollar weight of 
the index.\21\
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    \20\ See 17 CFR 242.600(b)(47).
    \21\ See proposed NASDAQ Rule 4420(m)(7)(B)(vii).
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    Finally, the Exchange proposes to modify NASDAQ Rule 4420(m)(4) to 
clarify that the payment at maturity may or may not provide for a 
multiple of the direct or inverse performance of any underlying index, 
indexes, or Reference Asset, provided that, in no event may a loss 
(negative payment) at maturity be accelerated by a multiple that 
exceeds the performance of an underlying index, indexes, or Reference 
Asset. Under this proposal, it will be possible for positive payment at 
maturity to be a multiple of the index or Reference Asset performance 
(including both a multiple of the direct performance and a multiple of 
the inverse of the actual performance). However, the proposal continues 
to maintain that, under NASDAQ's proposed generic listing and trading 
rules for Linked Securities, a negative payment at maturity may not be 
accelerated by a multiple that exceeds the performance of an underlying 
index or Reference Asset.

Proposed Changes to the Quantitative Maintenance Criteria of NASDAQ 
Rule 4450(c)

    The Exchange also seeks to amend NASDAQ Rule 4450(c) which governs 
the maintenance criteria for securities listed pursuant to NASDAQ Rule 
4420(f) and Linked Securities. Specifically, the proposal provides 
that, with respect to a Commodity-Linked Security listed pursuant to 
new NASDAQ Rule 4420(m), delisting or removal proceedings would be 
commenced (unless the Commission approved the continued trading of the 
subject security) if any of the listing requirements set forth in new 
NASDAQ Rule 4420(m) that were applicable at the time of the initial 
listing of the security are no longer being met.\22\ Notwithstanding 
the foregoing, a Commodity-Linked Security will not be delisted due to 
the lack of comprehensive surveillance sharing agreements if the 
Reference Asset has at least 10 components and NASDAQ has comprehensive 
surveillance sharing agreements with respect to at least 90% of the 
dollar weight of the Reference Asset for which such agreements are 
otherwise required.\23\ In addition, under the proposal, delisting or 
removal proceedings would also be commenced if: (1) the value of the 
Reference Asset is no longer calculated or widely disseminated as 
required; or (2) the value of the Reference Asset is no longer 
calculated or available and a new Reference Asset is substituted, 
unless the new Reference Asset meets the requirements of new NASDAQ 
Rules 4420(m) and 4450(c).\24\
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    \22\ See proposed NASDAQ Rule 4450(c)(4).
    \23\ See id.
    \24\ See proposed NASDAQ Rule 4450(c)(5).
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Surveillance and Information Circular
    The Exchange states that the Financial Industry Regulatory 
Authority, Inc. (``FINRA,'' f/k/a the National Association of Security 
Dealers, Inc.), under a regulatory services contract with NASDAQ, will 
continue to monitor transactions in Linked Securities to identify and 
discipline any improper trading activity in such securities. The 
Exchange notes that FINRA's surveillance procedures are adequate to 
properly monitor the trading of Linked Securities. To the extent 
applicable, NASDAQ and/or FINRA will also be able to obtain trading and 
beneficial holder information from the primary trading markets for the 
components comprising the Reference Asset, either pursuant to bilateral 
information sharing agreements with those markets or because those 
markets are SRO members or affiliate members of ISG.
    In addition, as currently provided in NASDAQ Rule 4420(m)(8),\25\ 
if the underlying index is maintained by a broker-dealer, the broker-
dealer is required to erect a ``firewall'' around the personnel who 
have access to information concerning changes and adjustments to the 
index, and the index must be calculated by a third party who is not a 
broker-dealer. The required firewall must be structured and maintained 
in a form satisfactory to NASDAQ in order to prevent the flow of 
information regarding the index from

[[Page 70631]]

the index production personnel to sales and trading personnel.
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    \25\ Under the proposal, NASDAQ Rule 4420(m)(8) has been re-
numbered to be NASDAQ Rule 4420(m)(9). See proposed NASDAQ Rule 
4420(m)(9).
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    NASDAQ represents that it will continue its current practice of 
evaluating the nature and complexity of each Linked Security, and 
distributing, if appropriate, an Information Circular that describes 
the Linked Security to members, highlighting the particular structure 
and corresponding risks of the Linked Security.\26\ The Information 
Circular would also reference the suitability requirements for members 
recommending a transaction in Linked Securities (NASDAQ Rule 2310), 
indicate that NASDAQ's equity trading rules would apply to the trading 
of Linked Securities, and note that the registration statement or 
prospectus for the Linked Security ought to be consulted and delivered, 
if required, in connection with a Linked Security transaction.
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    \26\ See Securities Exchange Act Release. No. 53142 (January 19, 
2006), 71 FR 4180 (January 25, 2006) (approving NASDAQ's current 
listing standards for Linked Securities and describing, among other 
things, the information to be included in the Information Circular). 
See also supra note 13 and accompanying text.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\27\ in general, and furthers the 
objectives of section 6(b)(5) of the Act,\28\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
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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    \27\ 15 U.S.C. 78f(b).
    \28\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments on the proposed rule change were neither solicited 
nor received.

III. Solicitation of Comments

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

Electronic Comments

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

Number SR-NASDAQ-2007-071 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 20549-1090.

    All submissions should refer to File Number SR-NASDAQ-2007-071. 
This file number should be included on the subject line if e-mail is 
used. To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, 

all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File number SR-NASDAQ-2007-071 and should 
be submitted on or before January 2, 2008.

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

    After careful consideration, 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 \29\ and, in particular, the requirements of section 6 of the 
Act.\30\ Specifically, the Commission finds that the proposed rule 
change is consistent with section 6(b)(5) of the Act,\31\ which 
requires, among other things, that the rules of a national securities 
exchange be designed 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 transactions in securities, 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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    \29\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \30\ 15 U.S.C. 78f.
    \31\ 15 U.S.C. 78f(b)(5).
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    To list and trade Commodity-Linked Securities, the Exchange 
currently must file a proposed rule change with the Commission pursuant 
to section 19(b)(1) of the Act \32\ and Rule 19b-4 thereunder.\33\ 
However, Rule 19b-4(e) provides that the listing and trading of a new 
derivative securities product by an SRO will not be deemed a proposed 
rule change pursuant to Rule 19b-4(c)(1) under the Act if the 
Commission has approved, pursuant to section 19(b) of the Act, the 
SRO's trading rules, procedures, and listing standards for the product 
class that would include the new derivative securities product, and the 
SRO has a surveillance program for the product class. The Exchange's 
proposed rules for the listing and trading of Commodity-Linked 
Securities pursuant to Rule 19b-4(e) fulfill these requirements. The 
Exchange's ability to rely on Rule 19b-4(e) to list and trade 
Commodity-Linked Securities that meet the applicable requirements of 
proposed NASDAQ Rule 4420(m) should reduce the time frame for bringing 
these securities to the market and thereby reduce the burdens on 
issuers and other market participants, while also promoting competition 
and making such securities available to investors more quickly.
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    \32\ 15 U.S.C. 78s(b)(1).
    \33\ 17 CFR 240.19b-4.
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    The Commission has previously approved generic listing standards 
for such securities that are substantively identical to the Exchange's 
current proposal.\34\ The Commission believes

[[Page 70632]]

that the proposed generic listing standards for Commodity-Linked 
Securities, in addition to the proposed conforming changes to the 
generic listing standards applicable to all Linked Securities and 
Equity Index-Linked Securities, should fulfill the intended objective 
of Rule 19b-4(e) and allow securities that satisfy the proposed generic 
listing standards to commence trading without the need for public 
comment and Commission approval.\35\
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    \34\ See supra note 4; Securities Exchange Act Release Nos. 
55794 (May 22, 2007), 72 FR 29558 (May 29, 2007) (SR-Amex-2007-45) 
(approving, among other things, generic listing standards for 
Commodity-Linked Securities and Currency-Linked Securities); and 
55687 (May 1, 2007), 72 FR 25824 (May 7, 2007) (SR-NYSE-2007-27) 
(approving generic listing standards for Equity Index-Linked 
Securities, Commodity-Linked Securities, and Currency-Linked 
Securities). NASDAQ's proposal also takes into account certain 
modifications recently made by other national securities exchanges 
to the various types of Linked Securities, as applicable. See, e.g., 
107A of the American Stock Exchange LLC Company Guide (reflecting 
exceptions to the minimum public distribution requirements for 
certain types of securities, including Linked Securities); 
Securities Exchange Act Release Nos. 56879 (December 3, 2007) (SR-
NYSEArca-2007-110) (approving certain proposed changes to the 
initial listing and trading standards for Equity Index-Linked 
Securities); 56838 (November 26, 2007), 72 FR 67774 (November 30, 
2007) (SR-NYSEArca-2007-118) (approving certain modifications made 
to the requirements relating to the indexes underlying Equity Index-
Linked Securities); and 56525 (September 25, 2007), 72 FR 56114 
(October 2, 2007) (SR-NYSE-2007-76) (approving certain exceptions to 
the requirement relating to pricing information of components 
comprising Commodity-Linked Securities and Currency-Linked 
Securities).
    \35\ The Commission notes that the failure of a particular 
product or index to comply with the proposed generic listing 
standards under Rule 19b-4(e), however, would not preclude the 
Exchange from submitting a separate filing pursuant to Section 
19(b)(2), requesting Commission approval to list and trade a 
particular index-linked product.
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    The Commission notes that any Linked Securities approved for 
listing and trading would be subject to the FINRA's surveillance 
procedures to monitor the trading in such securities. The Exchange has 
represented that, to the extent applicable, NASDAQ and/or FINRA will be 
able to obtain trading and beneficial holder information from other 
primary trading markets either pursuant to information sharing 
agreements with such markets or because such markets are members or 
affiliate members of ISG.
    The Exchange has represented that it will distribute, as 
appropriate, an Information Circular to members describing the product, 
the particular structure of the product, and the corresponding risks of 
trading Linked Securities, including the risks involved in trading such 
securities during markets sessions other than NASDAQ's Regular Market 
Session, when an updated index or Reference Asset value, or indicative 
value, if required, is not calculated or publicly disseminated.\36\ In 
addition, the Information Circular will set forth the Exchange's 
suitability requirements with respect to recommendations in 
transactions in Linked Securities to customers and the registration 
statement or prospectus delivery requirements. The Information Circular 
will also note that the Exchange's equity trading rules will be 
applicable to the trading of Linked Securities.
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    \36\ See supra note 13 and accompanying text.
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Acceleration
    The Commission finds good cause for approving the proposed rule 
change, as modified by Amendment Nos. 1, 2, and 3 thereto, before the 
30th day after the date of publication of notice of filing thereof in 
the Federal Register. The Commission notes that the Exchange's proposed 
conforming changes to the generic listing standards that apply to all 
Linked Securities, proposed changes to the generic listing standards 
for Equity Index-Linked Securities, and the proposed generic listing 
standards for Commodity-Linked Securities are based on previously 
approved listing standards for such securities.\37\ The Commission is 
presently not aware of any regulatory issue that should cause it to 
revisit that finding or would preclude the trading of such securities 
on the Exchange. Therefore, accelerating approval of this proposal 
should benefit investors by creating, without undue delay, additional 
competition in the market for Linked Securities, subject to the 
standards and representations discussed herein. Therefore, the 
Commission finds good cause, consistent with section 19(b)(2) of the 
Act,\38\ to approve the proposed rule change on an accelerated basis.
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    \37\ See supra notes 4 and 34.
    \38\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\39\ that the proposed rule change (SR-NASDAQ-2007-071), as 
modified by Amendment Nos. 1, 2, and 3 thereto, be, and it hereby is, 
approved on an accelerated basis.
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    \39\ Id.
    \40\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\40\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-23973 Filed 12-11-07; 8:45 am]

BILLING CODE 8011-01-P
