
[Federal Register: March 5, 2008 (Volume 73, Number 44)]
[Notices]               
[Page 11973-11974]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05mr08-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57389; File No. SR-NYSEArca-2008-06]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Accelerated Approval of Proposed Rule Change Relating to the 
Dissemination of the Index Value for Equity Index-Linked Securities

 February 27, 2008.

I. Introduction

    On January 11, 2008, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') 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 relating to the dissemination of the index value 
for Equity Index-Linked Securities.\3\ The proposed rule change was 
published for comment in the Federal Register on February 11, 2008 for 
a 15-day comment period.\4\ The Commission received no comments on the 
proposal. This order approves the proposed rule change on an 
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Equity Index-Linked Securities are 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 NYSE Arca Equities Rule 5.2(j)(6).
    \4\ See Securities Exchange Act Release No. 57273 (February 5, 
2008), 73 FR 7774.
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II. Description of the Proposal

    NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(c)(ii) currently 
provides that the Exchange will commence delisting or removal 
proceedings of an issue of Equity Index-Linked Securities (unless the 
Commission has approved continued trading of such Securities) if, among 
other circumstances, the value of the index or composite value of the 
indexes underlying such issue is no longer calculated or widely 
disseminated on at least a 15-second basis. The Exchange proposes to 
amend NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(c)(ii) to distinguish 
between indexes consisting solely of U.S. equity securities and those 
consisting of foreign securities or a combination of U.S. and foreign 
equity securities. The proposed amendment provides that the Exchange 
will commence delisting or removal proceedings if the underlying index 
value or composite index value is no longer calculated or widely 
disseminated: (1) On at least a 15-second basis with respect to an 
index or indexes containing only securities listed on a national 
securities exchange;\5\ or (2) on at least a 60-second basis with 
respect to an index or indexes containing foreign country securities. 
If the official index value does not change during some or all of the 
period when trading is occurring on the NYSE Arca Marketplace \6\ (for 
example, for indexes of foreign country securities, there may be time 
zone differences or holidays in the countries where such indexes' 
component stocks trade), then the last calculated official index value 
must remain available throughout NYSE Arca Marketplace trading hours. 
The Exchange seeks to conform the index dissemination requirements for 
Equity Index-Linked Securities to those for Investment Company Units, 
which include exchange-traded funds or ``ETFs,'' under NYSE Arca 
Equities Rule 5.2(j)(3).
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    \5\ American Depositary Shares and common shares of foreign 
issuers listed on U.S. national securities exchanges included in an 
index or indexes would be subject to the 15-second dissemination 
requirement.
    \6\ See NYSE Arca Equities Rule 1.1(e) (defining NYSE Arca 
Marketplace).
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III. Discussion and Commission's Findings

    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.\7\ In particular, the Commission finds that the proposed rule 
change is consistent with the requirements of Section 6(b)(5) of the 
Act,\8\ which requires, among other things, that the Exchange's rules 
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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    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that opportunities to invest in derivative 
securities products based not only on U.S. equity securities, but also 
on an international or global index of equity securities, provide 
additional choices to accommodate particular investment needs and 
objectives, to the benefit of investors. With respect to the 
dissemination of the value of an index that is comprised, at least in 
part, of non-U.S. equity component securities, the proposed 60-second 
standard reflects limitations, in some instances, on the frequency of 
intra-day trading information with respect to such foreign securities 
and that, in many cases, trading hours for overseas markets overlap 
only in part, or not at all, with NYSE Arca Marketplace trading 
hours.\9\ In addition, if an index or portfolio value does not change 
for some of the time that the derivative securities product trades on 
the Exchange, the last official calculated value must remain available 
throughout Exchange trading hours. The Commission believes that such 
60-second standard relating to the dissemination of the value of an 
index composed, at least in part, of foreign equity securities should 
apply to Equity Index-Linked Securities as well as ETFs and finds that 
NYSE Arca's proposal is consistent with the Exchange Act on the same 
basis that it approved the other exchanges' generic listing standards 
for ETFs based on international or global indexes.\10\
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    \9\ See Securities Exchange Act Release No. 55621 (April 12, 
2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86) (approving 
generic listing standards for ETFs based on international or global 
indexes).
    \10\ See, e.g., Securities Exchange Act Release Nos. 55269 
(February 9, 2007), 72 FR 7490 (February 15, 2007) (SR-NASDAQ-2006-
050); 55113 (January 17, 2007), 72 FR 3179 (January 24, 2007) (SR-
NYSE-2006-101); and 54739 (November 9, 2006), 71 FR 66993 (November 
17, 2006) (SR-Amex-2006-78).
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    The Commission finds good cause for approving the proposed rule 
change before the 30th day after the date of publication of notice of 
filing thereof in the Federal Register. The Commission notes that the 
proposal is substantially similar to previously approved listing 
standards for Investment Company Units under NYSE Arca Equities Rule 
5.2(j)(3) \11\ and for ETFs listed and traded pursuant to similar rules 
of other national securities exchanges.\12\ The Commission believes 
that accelerated approval of the proposed rule change,

[[Page 11974]]

which clarifies the dissemination of the value of the index underlying 
an issue of Equity Index-Linked Securities, should promote the 
continued listing and trading of Equity Index-Linked Securities to the 
benefit of investors. Therefore, the Commission finds good cause, 
consistent with Section 19(b)(2) of the Act, to approve the proposed 
rule change on an accelerated basis.
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    \11\ See supra note 9. See also Commentary .01(b)(2) to NYSE 
Arca Equities Rule 5.2(j)(3).
    \12\ See supra note 10.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-NYSEArca-2008-06) be, and it 
hereby is, approved on an accelerated basis.
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    \13\ 15 U.S.C. 78s(b)(2).
    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-4174 Filed 3-4-08; 8:45 am]

BILLING CODE 8011-01-P
