
[Federal Register: July 7, 2008 (Volume 73, Number 130)]
[Notices]               
[Page 38474-38479]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07jy08-130]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58057; File No. SR-Amex-2008-36]

 
Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Accelerated Approval of Proposed Rule Change to List and Trade 
Shares of the MacroShares $100 Oil Up Trust and the MacroShares $100 
Oil Down Trust

June 30, 2008.

I. Introduction

    On May 20, 2008, the American Stock Exchange LLC (``Amex'' 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 to: (1) Amend Amex Rules 1400, 1401, 1402 and 1405 
relating to the trading of Paired Trust Shares; and (2) list and trade 
shares (``Shares'') of the MacroShares $100 Oil Up Trust (``Up Trust'') 
and the MacroShares $100 Oil Down Trust (``Down Trust'') (collectively, 
the ``Trusts''). The proposed rule change was published for comment in 
the Federal Register on

[[Page 38475]]

June 11, 2008 for a 15-day comment period.\3\ 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\ See Securities Exchange Act Release No. 57925 (June 5, 
2008), 73 FR 33121 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to amend Amex Rules 1400, 1401, 1402 and 
1405, which apply to Paired Trust Shares, to accommodate the listing 
and trading of shares of the Up Trust (``Up MacroShares'') and shares 
of the Down Trust (``Down MacroShares''). In their current form, these 
rules apply to Paired Trust Shares that consist of Holding Shares and 
Tradeable Shares.\4\
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    \4\ Holding Shares are issued by a matched pair of trusts 
(``Holding Trusts'') in exchange for cash; Tradeable Shares are 
issued by a different pair of trusts (``Tradeable Trusts'') in 
exchange for the deposit of Holding Shares.
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A. Amendments to Amex Rules 1400, 1401, 1402 and 1405

    The Exchange proposes to amend Amex Rules 1400, 1401, 1402 and 1405 
to provide for the listing and trading of Paired Trust Shares in the 
case of a series that has only one set of paired trusts.\5\ Under the 
proposed amendments to Amex Rule 1400, the term ``Paired Trust Shares'' 
refers to: (1) Both Holding Shares and any related Tradeable Shares; or 
(2) solely ``Trading Shares,'' which is a new defined term. As 
proposed, Trading Shares has the same definition as Holding Shares, 
except that it is not required that a majority of Trading Shares be 
acquired and deposited in a related Tradeable Trust, as it is with 
Holding Shares. The Exchange proposes conforming changes in Amex Rules 
1401, 1402 and 1405.\6\ The Exchange represents that there are no 
substantive differences between the proposed Paired Trust Shares 
structure (i.e., a single set of Trading Trusts that issue Trading 
Shares and hold financial instruments) and the current two-tier 
structure (i.e., a set of Tradeable Trusts that issue Tradeable Shares 
and hold Holding Shares issued by a set of Holding Trusts that invest 
in financial instruments).
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    \5\ The Exchange states that it has been notified that the need 
for the current two-tier trust structure set forth in Amex Rule 1400 
for Paired Trust Shares is no longer necessary as a result of a 
recent interpretation by the staff of the Internal Revenue Service 
relating to the inability to interpose a grantor trust to utilize a 
certain tax reporting form.
    \6\ In paragraph (b)(i) of Amex Rule 1402, the Exchange also 
proposes to correct an error that was inadvertently made when the 
rule was originally adopted by replacing the word ``certificates'' 
with the word ``shares'' (consistent with all other references to 
shares in the rules for Paired Trust Shares).
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B. Listing and Trading the Shares

    The Up MacroShares and the Down MacroShares represent undivided 
beneficial interests in the Up Trust and the Down Trust, respectively. 
The Up Trust and the Down Trust would issue Up MacroShares and Down 
MacroShares, respectively, on a continuous basis on an ongoing basis at 
any time after the closing date only to and as directed by authorized 
participants, at the per-Share values of those Shares on the business 
day on which a creation order for the Shares is delivered to and 
accepted by the administrative agent for both Trusts.\7\ The Shares 
then may be sold by authorized participants to the public at the 
prevailing market price. As mentioned above, Amex proposes to list and 
trade the Shares pursuant to amended Amex Rules 1400, 1401, 1402 and 
1405.
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    \7\ The Up MacroShares and the Down MacroShares may be issued 
only in MacroShares Units, consisting of 50,000 Up MacroShares 
issued by the Up Trust and 50,000 Down MacroShares issued by the 
Down Trust.
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    The assets of each Trust will include an income distribution 
agreement and settlement contracts entered into with the other Trust. 
Under the income distribution agreement, as of any distribution date, 
each Trust will either: (1) Be required to pay all or a portion of its 
available income to the other Trust; or (2) be entitled to receive all 
or a portion of the other Trust's available income, based, in each 
case, on the level of the Applicable Reference Price of Crude Oil \8\ 
for each day during the preceding calculation period. Under each 
settlement contract, in connection with the final scheduled termination 
date, an early termination date or any redemption date, each Trust will 
either be required to make a final payment out of its assets to the 
other Trust or be entitled to receive a final payment from the other 
Trust out of the assets of the other Trust, based, in each case, on the 
change in the level of the Applicable Reference Price of Crude Oil from 
its starting level on the closing date to its ending level on the 
relevant price determination day preceding the final scheduled 
termination date, early termination date, or redemption date, as the 
case may be. Each Trust will also hold U.S. Treasuries and repurchase 
agreements on U.S. Treasuries (collectively, ``treasuries'') to secure 
its obligations under the income distribution agreement and the 
settlement contracts. Each Trust will make quarterly distributions of 
income on the treasuries and a final distribution of all assets it 
holds on deposit on the final scheduled termination date, an early 
termination date or a redemption date.\9\ Each quarterly and final 
distribution will be based on the value of the Applicable Reference 
Price of Crude Oil.
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    \8\ The Applicable Reference Price of Crude Oil is defined as 
the settlement price of the New York Mercantile Exchange (``NYMEX'') 
division light sweet crude oil futures contract of the designated 
maturity, as established and reported by the NYMEX on a per barrel 
basis in U.S. dollars at the end of each price determination day.
    \9\ Each Trust's quarterly distribution to holders of that 
Trust's Shares will be made out of the income that it holds on 
deposit after it has deducted an appropriate amount for fees, either 
made or received a payment under the income distribution agreement, 
and acquired treasuries with an aggregate purchase price equal to 
the aggregate par amount of the outstanding Shares of that Trust on 
that distribution date. On any distribution date, if a Trust's 
actual fees and expenses exceeds its income from the treasuries, 
there will be a corresponding reduction in the underlying value of 
the Trust that will be permanent unless it can be made up out of 
treasury income on future distribution dates, net of fees and 
expenses on those distribution dates.
    Each Trust's final distribution to holders of that Trust's 
Shares will depend on the payments that it is required to make to, 
or that it is entitled to receive from, the other Trust under the 
settlement contracts that are settled in connection with the final 
scheduled termination date, early termination date, or redemption 
date, as the case may be.
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    With respect to the Up Trust, if the level of the Applicable 
Reference Price of Crude Oil on any price determination day exceeds its 
starting level on the closing date (the date on which the Trusts 
entered into the income distribution agreement), the underlying value 
of the Up Trust will increase to include all of its assets plus a 
portion of the assets of the paired Down Trust. Conversely, if the 
level of the Applicable Reference Price of Crude Oil on any price 
determination day falls below its starting level, the Up Trust's 
underlying value will decrease because a portion of its assets will be 
included in the underlying value of the paired Down Trust. The 
underlying value of the Up Trust on each price determination day 
represents the aggregate amount of the assets in the paired Trusts to 
which the Up Trust would be entitled if the settlement contracts were 
settled on that day.
    With respect to the Down Trust, if the level of the Applicable 
Reference Price of Crude Oil on any price determination day exceeds its 
starting level on the closing date, the underlying value of the Down 
Trust will decrease because a portion of its assets will be included in 
the underlying value of the paired Up Trust. Conversely, if the level 
of the Applicable Reference Price of Crude Oil on any price 
determination day falls below its starting level, the Down Trust's 
underlying value will increase to

[[Page 38476]]

include all of its assets plus a portion of the assets of the Up Trust. 
The underlying value of the Down Trust on each price determination day 
represents the aggregate amount of the assets in the paired Trusts to 
which the Down Trust would be entitled if the settlement contracts were 
settled on that day.
    The Notice and the Registration Statements contain more information 
regarding the Shares, the Trusts, the Applicable Reference Price of 
Crude Oil, quarterly distributions, final distributions, price 
determination days, underlying values, risks, fees and expenses, 
termination triggers, and creation and redemption procedures.
1. Availability of Information Regarding the Shares
a. Intraday Indicative Values
    Throughout each price determination day, Amex, acting as the 
calculation agent for each Trust, will calculate and disseminate, at 
least every 15 seconds during regular Amex trading hours, through the 
facilities of the Consolidated Tape Association (``CTA''), an estimated 
value (referred to as an ``Intraday Indicative Value'' or ``IIV'') of 
the values per-Share of both the Up MacroShares and the Down 
MacroShares. To enable this calculation, Amex will receive real time 
price data from the NYMEX through major market data vendors for the 
light sweet crude oil futures contract of the designated maturity that 
trades on the NYMEX.
    Because the NYMEX market for the light sweet crude oil futures 
contract will be closed for portions of Amex trading day, the IIV 
calculated values will become fixed and will not be updated at such 
times that the NYMEX contract is not trading.\10\ Conversely, at times 
when the light sweet crude oil futures contract of the designated 
maturity is trading on NYMEX, those trades will be used to update the 
IIV values.
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    \10\ The IIV calculated during the period following the daily 
opening of trading of the Shares on Amex but prior to any trades 
taking place on the NYMEX in the relevant light sweet crude oil 
futures contract will be based on the final price of the futures 
contract on the prior trading day.
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    Amex will make available through its in-house systems, for use by 
the specialist and market makers, the IIV values distributed through 
the facilities of the CTA. This data will also be available to Amex 
surveillance systems and personnel for their purposes.
b. Availability of Other Information and Data
    At the end of each price determination day, Amex will calculate the 
premium or discount of the midpoint of the bid/offer for the Up 
MacroShares at the close on Amex relative to the value per share for 
that price determination day, after the latter is calculated and 
provided to Amex by the trustee. Amex will also perform the same 
calculation with respect to the Down MacroShares. Amex will then post 
these premiums/discounts, together with the end-of-day price 
information for the Shares, on its Web site (http://www.amex.com/
amextrader). Further, Amex will post on its Web site any corrections 
made by NYMEX to the Applicable Reference Price of Crude Oil that was 
reported by NYMEX for any price determination day. Amex also intends to 
disseminate a variety of data with respect to the Shares on a daily 
basis by means of CTA and CQ High Speed Lines, including quotation and 
last-sale data information.
    On each price determination day, State Street Bank and Trust 
Company, the trustee for the Up Trust and the Down Trust, will 
calculate the value of the Up Trust and the Down Trust and the per-
Share values of the Up MacroShares and Down MacroShares, based on the 
Applicable Reference Price of Crude Oil established and reported by 
NYMEX. The trustee will then provide such values to the administrative 
agent, which will post them on its Web site (http://
www.macromarkets.com). All investors and market participants will have 
access to the administrative agent's Web site at no charge.
    Information regarding secondary market prices and volume of the 
Shares will be broadly available on a real-time basis throughout the 
trading day on brokers' computer screens and other electronic services. 
The previous day's closing price and trading volume information will be 
published daily in the financial section of newspapers.
    Delayed information on futures contracts is often publicly 
available from futures exchanges. Daily settlement prices for the oil 
futures contract designated as the Applicable Reference Price of Crude 
Oil for the Shares is publicly available on NYMEX's Web site.
2. Initial and Continued Listing Criteria
    Amex Rule 1402 sets forth initial and continued listing criteria 
applicable to Paired Trust Shares. Currently, these criteria are 
applicable to Holding Shares and Tradeable Shares. The proposed rule 
change would make them applicable to Trading Shares as well.
    A minimum of 150,000 Up MacroShares and 150,000 Down MacroShares 
will be required to be outstanding at the commencement of trading. The 
Exchange believes that this minimum number of outstanding Shares at the 
start of trading is sufficient to provide adequate market liquidity, 
and it is the same initial minimum requirement that was applicable to 
the Claymore MACROshares Oil Up Tradeable Shares and the Claymore 
MACROshares Oil Down Tradeable Shares (the first series of Paired Trust 
Shares to be listed and traded on the Exchange). The starting level for 
the Applicable Reference Price of Crude Oil will be $100 and is based 
on recent prices for a barrel of light sweet crude oil. The Exchange 
will obtain a representation on behalf of the Up Trust and the Down 
Trust that the values per-Share of the Up MacroShares and Down 
MacroShares, respectively, will be calculated daily and will be made 
available to all market participants at the same time. The Exchange 
will remove from listing the Up MacroShares or the Down MacroShares 
under the following circumstances, pursuant to proposed Amex Rule 1402:
     If following the initial twelve month period following the 
commencement of trading of the Shares: (1) The Up Trust or the Down 
Trust has more than 60 days remaining until termination and there are 
fewer than 50 record and/or beneficial holders of Up MacroShares or 
Down MacroShares, respectively, for 30 or more consecutive trading 
days; (2) if the Up Trust or the Down Trust has fewer than 50,000 Up 
MacroShares or Down MacroShares, respectively, issued and outstanding; 
or (3) if the combined market value of all Shares issued and 
outstanding for the Up Trust and the Down Trust combined is less than 
$1,000,000;
     If the intraday level of the Applicable Reference Price of 
Crude Oil is no longer calculated or available on at least a 15-second 
delayed basis during the time the Shares trade on Amex from a source 
unaffiliated with the sponsor, custodian, depositor, Up Trading Trust, 
Down Trading Trust or the Exchange that is a major market data vendor;
     If the IIV of each Up Trading Share or Down Trading Share, 
as the case may be, is no longer made available on at least a 15-second 
delayed basis by a major market data vendor during the time the Shares 
trade on the Exchange;
     If a replacement benchmark is selected for the 
determination of the Applicable Reference Price of Crude Oil, unless 
the Exchange files with the Commission a related proposed rule change 
pursuant to Commission Rule 19b-4 under the Act seeking approval to 
continue trading the Up MacroShares or Down MacroShares and such rule

[[Page 38477]]

change is approved by the Commission; or
     If such other event shall occur or condition exists which 
in the opinion of the Exchange makes further dealings on the Exchange 
inadvisable.
3. 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 halts in trading of the 
Shares. First, the Information 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. In exercising its 
discretion to halt or suspend trading in the Shares, 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. During any trading halt in the Shares, 
the underlying light sweet crude oil futures contracts are expected to 
continue to trade on the NYMEX because the NYMEX does not provide for 
trading halts in these contracts.
    In the event that (a) The underlying value of each Trust or the 
per-Share values of each of the Up Trading Shares or the Down Trading 
Shares are not disseminated daily to all market participants at the 
same time, (b) the IIV, updated at least every 15 seconds, for the 
underlying value per Share of the Up Trading Shares or the Down Trading 
Shares is no longer being calculated or disseminated by a major market 
data vendor during the time the Shares trade on Amex, or (c) the price 
of the NYMEX light sweet crude oil futures contract is no longer 
available at least every 15 seconds from a major market data vendor 
during the time the Shares trade on Amex \11\ (e.g., due to a temporary 
disruption in connection with either the pricing of the light sweet 
crude oil futures contract on the NYMEX or the transmission of real 
time price data from the NYMEX), then the Exchange will halt 
trading.\12\ However, in the case of (b) or (c) involving interruption 
to the required dissemination of IIVs or futures contract prices, the 
Exchange may consider relevant factors and exercise its discretion 
regarding the halt or suspension of trading during the day in which the 
interruption to the dissemination of the IIVs or the futures contract 
prices occurs. If the interruption to the dissemination of the IIVs or 
the futures contract prices persists past the trading day in which it 
occurred, the Exchange will halt trading no later than the beginning of 
the trading day following the interruption.
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    \11\ Trading in the MACRO Tradeable Shares will not be halted on 
Amex, however, simply because price data from the NYMEX based on 
current trading is not available outside the normal open outcry 
trading hours of light sweet crude oil futures contracts on the 
NYMEX from 10 a.m. to 2:30 p.m., Eastern Time.
    \12\ In each of these circumstances, the Exchange may contact 
the Commission staff to discuss the matter.
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4. 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). The Shares will trade on Amex from 9:30 a.m. until either 4 
p.m. or 4:15 p.m. Eastern Time each business day for each series, as 
specified by the Exchange, and will trade in a minimum price variation 
of $0.01 pursuant to Amex Rule 127-AEMI. Trading rules pertaining to 
odd-lot trading in Amex equities (Amex Rule 205-AEMI) will also apply.
    Amex Rule 154-AEMI(c)(ii) provides that stop and stop limit orders 
to buy or sell a security the price of which is derivatively priced 
based upon another security or index of securities, may be elected by a 
quotation, as set forth in subparagraphs (c)(ii)(1)-(4) of Amex Rule 
154-AEMI . By this rule filing, the Exchange is designating the Shares 
as eligible for this treatment.\13\ In addition, Amex Rule 126A-AEMI 
complies with Rule 611 of Regulation NMS, which requires, among other 
things, that the Exchange adopt and enforce written policies and 
procedures that are reasonably designed to prevent trade-throughs of 
protected quotations. Members and member organizations will be subject 
to Commentary .03 to Amex Rule 1400 prohibiting such member or member 
organizations from entering into the Exchange's order routing system 
multiple limit orders as agent (i.e., customer agency orders).
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    \13\ See Securities Exchange Act Release No. 29063 (April 10, 
1991), 56 FR 15652 (April 17, 1991) (SR-Amex-90-31) at note 9, 
regarding the Exchange's designation of equity derivative securities 
as eligible for such treatment by means of a new rule filing with 
the Commission. In the instant case, the price of the Up MacroShares 
and the Down MacroShares are derivatively based upon, and should 
fluctuate with, the value of the underlying settlement contracts 
held by the Up Trust or the Down Trust, as the case may be, which 
settlement contracts: (1) Determine the amount of the aggregate 
assets in the paired Trusts to which each respective Trust would be 
entitled if settlement occurred on that day; and (2) have a value 
that is determined by the level of the Applicable Reference Price of 
Crude Oil. Consequently, as with other equity derivative securities 
designated by the Exchange as eligible under the terms of Securities 
Exchange Act Release No. 29063 to allow stop and stop limit orders 
to be elected by a quotation, the Exchange believes that the 
derivative pricing relationship to which the Shares are subject does 
not present the type of opportunity for manipulation and trading 
abuses in connection with elections of stop orders by specialists 
that the Commission seeks to prohibit.
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5. Information Circular
    Prior to the commencement of trading, the Exchange will inform its 
members and member organizations in an Information Circular of the 
special characteristics and risks associated with trading the Shares. 
Specifically, the Information Circular will discuss the following: (1) 
What the Shares are; (2) the procedures for purchases and paired 
optional redemptions of Shares, which may only be effected in 
MacroShares Units \14\ or multiples thereof by Authorized Participants 
(noting in particular that Shares are not individually redeemable); (3) 
prospectus delivery requirements that are applicable in connection with 
the purchase of newly issued Shares by investors; (4) applicable Amex 
rules; (5) dissemination of information regarding the underlying value 
of each Trust and the share of that underlying value allocable to one 
Up MacroShare and one Down MacroShare; (6) trading information; and (7) 
suitability obligations of members with respect to recommended 
transactions to customers in the Shares (discussed below).
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    \14\ See supra note 7.
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    In addition, the Information Circular will reference that the 
Shares are subject to various fees and expenses described in the 
Registration Statements on Form S-1 for the Up MacroShares or the Down 
MacroShares, as applicable.\15\ The Information Circular will discuss 
any exemptive, no-action, and interpretive relief granted by the 
Commission from any rules under the Exchange Act. It will also 
reference the fact that the Commission has no jurisdiction over the 
trading of the NYMEX light sweet crude oil futures contract. Finally, 
the Information Circular will also advise members that the upside gains 
to investors are capped once the price level percentage change of the 
Applicable Reference Price of Crude Oil equals or exceeds 100%.
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    \15\ On April 17, 2008, the depositor filed with the Commission 
a Registration Statement on Form S-1 for both the Up MacroShares 
(File No. 333-150282-01) (``Up Trust Registration Statement'') and 
the Down MacroShares (File No. 333-150282-02) (``Down Trust 
Registration Statement'' and together with the Up Trust Registration 
Statement, the ``Registration Statements'').
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6. Suitability
    The Exchange, in the Information Circular referenced above, will 
inform

[[Page 38478]]

members and member organizations of the characteristics of the Trusts 
and the Shares and of applicable Exchange rules, as well as of the 
requirements of Amex Rule 411 (Duty to Know and Approve Customers).
    The Exchange notes 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.
7. Surveillance
    The Exchange represents that its surveillance procedures are 
adequate to properly monitor the trading of the Shares and to deter and 
detect violations of Exchange rules and applicable federal securities 
laws. Specifically, Amex will rely on its existing surveillance 
procedures applicable to derivative securities products, including 
Paired Trust Shares, to monitor trading in the Shares. In addition, the 
Exchange also has a general policy prohibiting the distribution of 
material, non-public information by its employees.
    The Exchange currently has in place a comprehensive surveillance 
sharing agreement with the NYMEX for the purpose of providing 
information in connection with trading in, or related to, futures 
contracts traded on the NYMEX that will serve as the Applicable 
Reference Price of Crude Oil. This agreement supports the surveillance 
responsibilities of the two exchanges, including monitoring for 
fraudulent and manipulative practices in the trading of the Shares. The 
Exchange also notes that NYMEX is a member of the Intermarket 
Surveillance Group (``ISG'') and a signatory to the existing ISG 
Agreement, as is Amex. Pursuant to the ISG Agreement, NYMEX has the 
obligation to provide relevant surveillance information in response to 
a request from Amex.

III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of Section 6 of the 
Act \16\ and the rules and regulations thereunder applicable to a 
national securities exchange.\17\ In particular, the Commission finds 
that the proposal is consistent with Section 6(b)(5) of the Act,\18\ 
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.
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    \16\ 15 U.S.C. 78f.
    \17\ 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).
    \18\ 15 U.S.C. 78f(b)(5).
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A. Amendments to Amex Rules 1400, 1401, 1402 and 1405

    Amex Rule 1400 governs the listing and trading of Paired Trust 
Shares. The definition of Paired Trust Shares is currently limited to 
Holding Shares and Tradeable Shares.\19\ Amex proposes to broaden the 
definition of Paired Trust Shares to include Trading Shares. The 
structure of Trading Shares differs from the structures described under 
the current Amex Rules governing Paired Trust Shares in that, for 
Trading Shares, there are no Holding Trusts and there is only one set 
of trusts (i.e., the ``Up Trust'' and the ``Down Trust'') instead of 
two. The Exchange has represented that there are no substantive 
differences in the new structure, which has been proposed because of a 
recent interpretation by the staff of the Internal Revenue Service that 
the two-tier Holding Shares and Tradeable Shares structure is no longer 
necessary.
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    \19\ See current Amex Rule 1400(b)(1).
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    The Commission finds that Amex's proposal contains adequate rules 
and procedures to govern the listing and trading of Trading Shares on 
the Exchange. Previously, the Commission found that the current rules 
governing the listing and trading of Paired Trust Shares are consistent 
with Section 6(b)(5) of the Act.\20\ Given the substantial similarities 
between the current and proposed types of Paired Trust Shares, the 
Commission believes that including Trading Shares within Amex's 
existing regime for listing and trading Paired Trust Shares is 
appropriate and does not raise any regulatory issues.
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    \20\ See Securities Exchange Act Release No. 54839 (November 29, 
2006), 71 FR 70804, 70809 (December 6, 2006) (SR-AMEX-2006-82).
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    The Commission believes that the proposal should help to facilitate 
the listing and trading of additional types of exchange-traded products 
that should enhance competition among market participants, to the 
benefit of investors and the marketplace. In addition, the Commission 
believes that the listing and trading criteria for Trading Shares set 
forth in proposed Amex Rule 1400 are reasonably designed to protect 
investors and the public interest, as discussed herein.

B. Listing and Trading the Shares

    The Commission finds that the proposal to list and trade the Shares 
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the 
Act,\21\ which sets forth Congress' finding that it is in the public 
interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for and transactions in securities. Amex will disseminate a 
variety of data with respect to the Shares on a daily basis by means of 
CTA and CQ High Speed Lines, including quotation and last-sale data 
information. The Exchange states that information regarding secondary 
market prices and volume of the Shares will be broadly available on a 
real-time basis throughout the trading day on brokers' computer screens 
and other electronic services, and that the previous day's closing 
price and trading volume information will be published daily in the 
financial section of newspapers. Amex will also post the premium or 
discount of the midpoint of the bid/offer for the Up MacroShares and 
Down MacroShares at the close on Amex relative to the values per Share 
for that price determination day, together with the end-of-day price 
information for the Shares, on its Web site (http://www.amex.com/
amextrader).\22\
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    \21\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \22\ Amex will also post on its Web site any corrections made by 
NYMEX to the Applicable Reference Price of Crude Oil that was 
reported by NYMEX for any price determination day.
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    On each price determination day, the per-Share values of the Up 
MacroShares and Down MacroShares, based on the Applicable Reference 
Price of Crude Oil established and reported by NYMEX, will be 
calculated and posted on the administrative agent's Web site (http://
www.macromarkets.com). All investors and market participants will have 
access to the administrative agent's Web site at no charge.
    The Exchange states that delayed information on futures contracts 
often is publicly available from futures exchanges. Daily settlement 
prices for the oil futures contract designated as the Applicable 
Reference Price of Crude Oil for the Shares is publicly available on 
NYMEX's Web site.
    The Commission believes that the proposal to list and trade the 
Shares is reasonably designed to promote fair

[[Page 38479]]

disclosure of information that may be necessary to price the Shares 
appropriately and to prevent trading when a reasonable degree of 
transparency cannot be assured. The Commission notes that the Exchange 
will obtain a representation on behalf of the Trusts that the per-Share 
net asset values for the Trusts will be calculated daily and made 
available to all market participants at the same time. Additionally, 
the Exchange will halt trading in the Shares if the value of each Trust 
or the per-share values of each of the Up Trading Shares or the Down 
Trading Shares are not disseminated daily to all market participants at 
the same time. The Commission also notes that, pursuant to proposed 
Amex Rule 1402, the Exchange will remove from listing the Up 
MacroShares or the Down MacroShares under certain circumstances, 
including if: (1) The intraday level of the Applicable Reference Price 
of Crude Oil is no longer calculated or available on at least a 15-
second delayed basis during the time the Shares trade on Amex from a 
source unaffiliated with the sponsor, custodian, depositor, Up Trading 
Trust, Down Trading Trust or the Exchange that is a major market data 
vendor; or (2) the IIV of the Share is no longer made available on at 
least a 15-second delayed basis by a major market data vendor during 
the time the shares trade on the Exchange.
    The Exchange has represented that the Shares are equity securities 
subject to the Exchange's rules governing the trading of equity 
securities. In support of this proposal, the Exchange has made the 
following representations:
    (1) The Exchange's surveillance procedures are adequate to properly 
monitor Exchange trading of the Shares and to deter and detect 
violations of Exchange rules and applicable federal securities laws.
    (2) Prior to the commencement of trading, the Exchange will inform 
its members and Member Organizations an Information Circular of the 
special characteristics and risks associated with trading the Shares. 
Specifically, the Information Circular will discuss the following: (1) 
What the Shares are; (2) the procedures for purchases and paired 
optional redemptions of Shares; (3) prospectus delivery requirements 
that are applicable in connection with the purchase of newly issued 
Shares by investors; (4) applicable Amex rules; (5) dissemination of 
information regarding the underlying value of each Trust and the share 
of that underlying value allocable to one Up MacroShare and one Down 
MacroShare; (6) trading information; (7) suitability obligations of 
members with respect to recommended transactions to customers in the 
Shares; (8) that the Shares are subject to various fees and expenses 
described in the Registration Statement on Form S-1 for the Up 
MacroShares or the Down MacroShares, as applicable; \23\ and (9) any 
exemptive, no-action, and interpretive relief granted by the Commission 
from any rules under the Act.
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    \23\ See supra note 15.
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    This approval order is based on the Exchange's representations.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and, in 
particular, with Section 6(b)(5) of the Act.\24\
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    \24\ 15 U.S.C. 78f(b)(5).
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C. Acceleration

    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 
Shares are substantially similar to another product previously approved 
for listing and trading on the Exchange.\25\
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    \25\ See supra note 20.
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    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.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\26\ that the proposed rule change (SR-Amex-2008-36) be, and it 
hereby is, approved on an accelerated basis.
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    \26\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15206 Filed 7-3-08; 8:45 am]

BILLING CODE 8010-01-P
