
[Federal Register: August 11, 2008 (Volume 73, Number 155)]
[Notices]               
[Page 46689-46693]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11au08-127]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58312; File No. SR-NYSEArca-2008-63]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To List 
and Trade Shares of the MacroShares Medical Inflation Trusts

August 5, 2008.
    On June 13, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``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: (1) Amend NYSE Arca Equities Rule 8.400 
(Paired Trust Shares); and (2) list and trade shares of the MacroShares 
Medical Inflation Up Trust Series 2008-1 (``Up Trust'') and shares of 
the MacroShares Medical Inflation Down Trust Series 2008-1 (``Down 
Trust'' and, together with the Up Trust, the ``Trusts'').\3\ The 
proposed rule change was published for comment in the Federal Register 
on July 2, 2008.\4\ The Commission received no comments on the 
proposal. On July 31, 2008, the Exchange filed Amendment No. 1 to the 
proposed rule change. This order provides notice of filing of Amendment 
No. 1 to the proposed rule change,\5\ and grants accelerated approval 
to the proposed rule change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The shares of the Up Trust are referred to as Up 
MacroShares, the shares of the Down Trust are referred to as Down 
MacroShares, and the Up MacroShares and Down MacroShares are 
referred to collectively as the ``Shares.''
    \4\ See Securities Exchange Act Release No. 58024 (June 25, 
2008), 73 FR 38003.
    \5\ Amendment No. 1 provided additional detail regarding the 
availability of the Applicable Reference Value (as defined herein) 
and other information relating to the Shares. The amendment also 
clarifies proposed NYSE Arca Equities Rule 8.400(d)(2)(ii), which 
describes a circumstance in which Paired Trust Shares will be 
delisted. Specifically, the amendment makes clear that the Exchange 
will delist any type of Paired Trust Shares (not just Tradeable 
Shares) for which an intraday Reference Price is calculated and 
disseminated if the intraday Reference Price is not calculated or 
disseminated as required by the Rule.
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I. Description of the Proposal

A. Amendments to NYSE Arca Equities Rule 8.400

    The Exchange proposes to amend NYSE Arca Equities Rule 8.400 
governing Paired Trust Shares to allow for the listing and trading of 
``Trading Shares,'' a proposed new type of Paired Trust Share. 
Currently, NYSE Arca Equities Rule 8.400 defines Paired Trust Shares to 
include only Holding Shares, which are issued by a matched pair of 
Trusts (``Holding Trusts'') in exchange for cash, and Tradeable Shares, 
which are issued by a different pair of Trusts (``Tradeable Trusts'') 
in exchange for the deposit of Holding Shares.
    Under the proposed amendments to NYSE Arca Equities Rule 8.400, 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 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).

B. Listing and Trading of the Shares

    The Up Trust and the Down Trust intend to issue Up MacroShares and 
Down MacroShares, respectively, on a continuous basis at the direction 
of authorized participants. The Up MacroShares and the Down MacroShares 
represent undivided beneficial interests in the Up Trust and the Down 
Trust, respectively.
    The assets of each Trust will consist of 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 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 Applicable Reference Value of Medical Inflation (the 
``Applicable Reference Value,'' as defined below) 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: (1) Be 
required to make a final payment out of its assets to the other Trust; 
or (2) 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 
Applicable Reference Value for the period from the closing date through 
the date of redemption. Each Trust will also hold U.S. Treasuries and 
repurchase agreements on U.S. 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. Each quarterly and final distribution will be based on 
the value for the medical care component of the Consumer Price Index 
for All Urban Consumers (``CPI-U''), as calculated and published 
monthly by the Bureau of Labor Statistics (``BLS'') at www.bls.gov.\6\ 
The medical care component of the CPI-U reflects inflation in the cost 
of medical goods and services. The Applicable Reference Value is a 
daily linear interpolation based on the monthly values of the medical 
care component of the CPI-U for the preceding two months, and is the 
Reference Price for purposes of NYSE Arca Equities Rule 8.400, on the 
basis of which quarterly and final distributions on the Up MacroShares 
and Down MacroShares are calculated. The Applicable Reference Value is 
determined for each calendar day using a formula set forth in the Up 
Trust Registration Statement. For purposes of determining the 
Applicable Reference Value, following the monthly publication by the 
BLS, any corrections to the CPI-U values released for any calendar 
month will not be taken into consideration or used to recalculate the 
underlying value of the Shares.
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    \6\ The BLS publishes a summary of its methodology for 
calculating the CPI at www.bls.gov/cpi/. In addition, a manual 
entitled BLS Handbook of Methods, in which a chapter is dedicated to 
calculation methodology for the CPI, may be accessed on the BLS Web 
site at www.bls.gov/opub/hom/pdf/homch17.pdf.
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    With respect to the Up Trust, if the ratio of the Applicable 
Reference Value on any day to the Applicable Reference Value on the 
closing date (the date on which the Trusts entered into an income

[[Page 46690]]

distribution agreement) exceeds the hurdle rate (``Hurdle Rate''),\7\ 
compounded on an annualized basis for the period from the closing date 
to the day of measurement, the underlying value of the Up Trust on the 
next business day will include all of its assets plus a portion of the 
assets of the paired Down Trust. This portion of assets due from the 
Down Trust will be multiplied by the leverage factor (``Leverage 
Factor'').\8\ Conversely, if this ratio is less than the compounded 
hurdle rate, the Up Trust's underlying value will decrease, because a 
portion of its assets will be included in the underlying value of its 
paired Down Trust. This portion of assets due to the Down Trust will be 
multiplied by the Leverage Factor.
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    \7\ The hurdle rate has been designated as 4.50%. This rate is 
fixed during the term of the Trusts. The Up Trust Registration 
Statement provides a description for calculating a hypothetical 
``per share underlying value'' for any date, which is the amount an 
investor would be entitled to receive as a final distribution on 
that date if the paired trusts were to settle the settlement 
contracts and the Up Trust were to make a final distribution on Up 
MacroShares.
    \8\ The leverage factor is 2, and is fixed for the term of the 
Trusts.
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    With respect to the Down Trust, if the ratio of the Applicable 
Reference Value on any day to the Applicable Reference Value on the 
closing date (the date on which the Trusts entered into an income 
distribution agreement) exceeds the Hurdle Rate, compounded for the 
period from the closing date to the day of measurement, the underlying 
value of the Down Trust on the next business day will decrease, because 
a portion of its assets will be included in the underlying value of its 
paired Up Trust. This portion of assets due to the Up Trust will be 
multiplied by the Leverage Factor. Conversely, if this ratio is less 
than the compounded Hurdle Rate, the Down Trust's underlying value will 
increase, because a portion of the assets of the Up Trust will be 
included in the underlying value of the Down Trust. This portion of 
assets due from the Up Trust will be multiplied by the Leverage Factor.
    The Up MacroShares may be issued only in MacroShares Units 
consisting of a minimum of 50,000 Up MacroShares issued by the Up Trust 
and 50,000 Down MacroShares issued by the Down Trust. The Up Trust and 
Down Trust will issue their shares in the minimum amounts that 
constitute a MacroShares Unit on an ongoing basis only to persons who 
qualify as authorized participants at the per-share underlying value of 
those shares on the business day on which a creation order for the 
shares is delivered to and accepted by MacroMarkets LLC, the 
administrative agent.\9\ The Shares may then be sold by authorized 
participants to the public at the market price prevailing at the time 
of any such sale.
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    \9\ Authorized participants must also pay a transaction fee of 
$2,000 for any paired redemption or issuance and, for any paired 
issuance directed prior to July 1, 2008, a fee equal to 3.00% of the 
aggregate par amount of paired shares being created.
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    Up MacroShares must be redeemed together with Down MacroShares by 
any holder who is an authorized participant on any business day in 
MacroShares Units consisting of a minimum of 50,000 Up MacroShares and 
50,000 Down MacroShares, at the respective per Share underlying values 
of those Shares, as measured on the applicable redemption date.
    More information regarding the Shares, the Up Trust and the 
Applicable Reference Value, Income Distribution, Redemption Final 
Distribution, Risks, Fees and Expenses, Termination Triggers, and 
Creation and Redemption Procedures can be found in the Up Trust 
Registration Statement and Down Trust Registration Statement.\10\
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    \10\ The Exchange states that the income distribution agreement 
and applicable settlement contracts will be attached as Exhibits to 
the Registration Statements. On January 25, 2008, the depositor 
filed with the Commission Amendment No. 1 to Registration Statement 
on Form S-1 for the Up MacroShares (File No. 333-147948). The 
Exchange states that the depositor will file with the Commission a 
Registration Statement on Form S-1 for the Down MacroShares prior to 
commencement of trading in the Shares on the Exchange.
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1. Availability of Information
    At the beginning of each business day, not later than one hour 
prior to the commencement of trading in the Core Trading Session on the 
Exchange, State Street Bank and Trust Company, the trustee for the Up 
Trust and the Down Trust, will calculate the underlying values of the 
Up Trust and the Down Trust and the per Share underlying values of the 
Up MacroShares and Down MacroShares. The trustee will then provide such 
values to the administrative agent, who will post them on its Web site 
located at www.macromarkets.com. Intraday indicative values for the 
Shares will not be calculated. The trustee will base its calculation of 
underlying value for any business day on the administrative agent's 
calculation of the Applicable Reference Value \11\ for the preceding 
day (regardless of whether that preceding day is a business day or non-
business day),\12\ which it will provide to the trustee. The underlying 
values will be disseminated to all market participants at the same 
time.
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    \11\ The Applicable Reference Value (the Reference Price for the 
Shares) is a daily linear interpolation based on the monthly values 
of the medical care component of the CPI-U for the preceding two 
months, and it will not be re-calculated or disseminated intraday.
    \12\ The daily value of the Applicable Reference Value on the 
preceding day will be based upon the value of the medical component 
of the CPI-U that was calculated and published by the BLS for the 
second and third preceding calendar months.
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    Information regarding the market price and volume of the Shares 
will be continually available on a real-time basis throughout the day 
via electronic services. The previous day's closing price and trading 
volume information for the Shares will be published daily in the 
financial section of major newspapers and will be available from major 
market data vendors. Quotation and last sale information for the Shares 
will be available via the Consolidated Tape Association high-speed 
line.
2. Initial and Continued Listing Criteria
    NYSE Arca Equities Rule 8.400(d) sets forth initial and continued 
listing criteria applicable to Paired Trust Shares. A minimum of 
100,000 Up MacroShares and 100,000 Down MacroShares will be required to 
be outstanding at the commencement of trading. In addition, the 
Exchange will obtain a representation on behalf of the Up Trust and the 
Down Trust that the underlying values per Share of the Up Shares and 
Down Shares 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 
circumstances outlined in the proposed amendments to NYSE Arca Equities 
Rule 8.400(d) for Trading Shares, which include:
     If, after the initial twelve-month period following the 
commencement of trading of the Shares, (A) 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; (B) if the Up Trust or the Down Trust has fewer than 50,000 Up 
MacroShares or Down MacroShares, respectively, issued and outstanding; 
or (C) 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 a replacement benchmark is selected for the 
determination of the Applicable Reference Value, unless the Exchange 
files with the Commission a related proposed rule change pursuant to 
Rule 19b-4 under the Act \13\ seeking

[[Page 46691]]

approval to continue trading the Up MacroShares or Down MacroShares and 
such rule change is approved by the Commission; or
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    \13\ 17 CFR 240.19b-4.
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     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
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading may be halted because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in the Shares inadvisable. These may include: (1) The extent to 
which trading is not occurring in the underlying securities; or (2) 
whether other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. NYSE Arca 
Equities Rule 8.400(d)(2) also provides that the Exchange will halt 
trading in the Up MacroShares or the Down MacroShares, as the case may 
be, if the circuit breaker parameters of NYSE Arca Equities Rule 7.12 
have been reached. In exercising its discretion to halt or suspend 
trading in the Up MacroShares or the Down MacroShares, the Exchange may 
consider other factors that may be relevant.
    If the Exchange becomes aware that the underlying value per Share 
of each Up Share and Down Share is not disseminated to all market 
participants at the same time, it will halt trading in the Up 
MacroShares or the Down MacroShares, as the case may be, until such 
time as the underlying value per share is available to all market 
participants.
4. Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. Shares will trade on 
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern Time in 
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late 
Trading Sessions). The Exchange represents that it has appropriate 
rules to facilitate transactions in the Shares during all trading 
sessions.
5. Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative securities products, including 
Paired Trust Shares, to monitor trading in the Shares. The Exchange 
represents that these procedures are adequate to properly monitor 
Exchange trading of the Shares in all trading sessions and to deter and 
detect violations of Exchange rules and applicable federal securities 
laws.
    The Exchange's current trading surveillance focuses on detecting 
securities trading outside their normal patterns. When such situations 
are detected, surveillance analysis follows and investigations are 
opened, where appropriate, to review the behavior of all relevant 
parties for all relevant trading violations.
    The Exchange may obtain information via the Intermarket 
Surveillance Group (``ISG'') from other exchanges who are members of 
the ISG.\14\ In addition, the Exchange also has a general policy 
prohibiting the distribution of material, non-public information by its 
employees.
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    \14\ For a list of the current members of ISG, see 
www.isgportal.org.
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6. Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin (``Bulletin'') of the special 
characteristics and risks associated with trading the Shares. 
Specifically, the Bulletin will discuss the following: (1) What the 
Shares are; (2) the procedures for purchases and redemptions of Shares 
in MacroShares Units (and that Shares are not individually redeemable); 
(3) NYSE Arca Equities Rule 9.2(a),\15\ which imposes a duty of due 
diligence on its ETP Holders to learn the essential facts relating to 
every customer prior to trading the Shares; (4) the requirement that 
ETP Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (5) trading information.
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    \15\ NYSE Arca Equities Rule 9.2(a) provides that an ETP Holder, 
before recommending a transaction, must have reasonable grounds to 
believe that the recommendation is suitable for the customer based 
on any facts disclosed by the customer as to his other security 
holdings and as to his financial situation and needs. Further, the 
rule provides, with a limited exception, that prior to the execution 
of a transaction recommended to a non-institutional customer, the 
ETP Holder shall make reasonable efforts to obtain information 
concerning the customer's financial status, tax status, investment 
objectives, and any other information that the ETP Holder believes 
would be useful to make a recommendation. See Securities Exchange 
Act Release No. 54026 (June 21, 2006), 71 FR 36850 (June 28, 2006) 
(SR-PCX-2005-115).
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    In addition, the Bulletin will reference that the Shares are 
subject to various fees and expenses described in the Registration 
Statement. The Bulletin will discuss any exemptive, no-action, and 
interpretive relief granted by the Commission from any rules under the 
Act.

II. 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 NYSE Arca Equities Rule 8.400

    NYSE Arca Equities Rule 8.400 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\ The Exchange 
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 NYSE Arca Equities 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. As noted above, the 
Exchange has represented that there are no substantive differences 
between the proposed structure (a single set of Trading Trusts that 
issue Trading Shares and hold financial instruments) and the current 
two-tier structure (in which 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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    \19\ See current NYSE Arca Equities Rule 8.400(b)(1).
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    The Commission finds that the Exchange'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

[[Page 46692]]

Section 6(b)(5) of the Act.\20\ Given the substantial similarities 
between Holding Shares, Tradeable Shares, and Trading Shares, the 
Commission believes that including Trading Shares within the Exchange's 
existing regime for listing and trading Paired Trust Shares is 
appropriate and does not raise any regulatory issues. The Commission 
notes that it recently approved a proposal by another national 
securities exchange which also included Trading Shares as part of its 
rules relating to Paired Trust Shares.\21\
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    \20\ See Securities Exchange Act Release No. 55033 (December 29, 
2006), 72 FR 1253, 1256 (January 10, 2007) (SR-NYSEArca-2006-75).
    \21\ See Securities Exchange Act Release No. 58057 (June 30, 
2008), 73 FR 38474 (July 7, 2008) (SR-Amex-2008-36).
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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 NYSE Arca Equities Rule 8.400 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,\22\ 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. Quotation and last-sale 
information for the Shares will be available via the Consolidated Tape 
Association high-speed line. The Exchange states that information 
regarding the market price and volume of the Shares will be continually 
available on a real-time basis throughout the day via electronic 
services, and that the previous day's closing price and trading volume 
information for the Shares will be published daily in the financial 
sections of major newspapers and will be available from major market 
data vendors. At the end of each business day, the administrative agent 
(MacroShares Markets LLC) will also calculate the premium or discount 
of the midpoint of the bid/offer to the underlying value per Share for 
both the Up MacroShares and the Down MacroShares for that day at the 
close of the Exchange's Core Trading Session. The premium/discount 
calculation will be conducted after such underlying values are 
calculated and provided to the administrative agent by the trustee and 
after the Exchange provides the administrative agent with the closing 
price for the Up MacroShares and Down MacroShares as of 3:59:59 
(Eastern Time). The administrative agent will then post these premiums/
discounts, together with the end-of-day price information for the 
Shares, on its Web site (www.macromarkets.com).
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    \22\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    At the beginning of each business day, not later than one hour 
prior to the commencement of trading in the Core Trading Session on the 
Exchange, the trustee for the Up Trust and the Down Trust will 
calculate the underlying value of the Up Trust and the Down Trust and 
the per Share underlying values of the Up MacroShares and Down 
MacroShares. The trustee will then provide such values to the 
administrative agent, who will post them on its Web site, which is 
accessible to the public free of charge. The Exchange represents that 
the underlying values of the Trusts will be disseminated to all market 
participants at the same time.
    The administrative agent will also determine daily the Applicable 
Reference Value, which it will disseminate to all market participants 
at the same time by posting it on its Web site.
    The Commission believes that the proposal to list and trade the 
Shares is reasonably designed to promote fair 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 it becomes aware that the per-Share values of the Up Trust or 
the Down Trust are not disseminated daily to all market participants at 
the same time.
    As noted above, neither an indicative value for the Shares nor the 
Applicable Reference Value (the Reference Price for the Shares, for 
purposes of NYSE Arca Equities Rule 8.400) will be calculated or 
disseminated intraday. Instead, the per Share underlying values of the 
Up MacroShares and Down MacroShares and the Applicable Reference Value 
will be calculated and disseminated daily. The Commission believes 
that, because the Applicable Reference Value is a daily linear 
interpolation based on the monthly values of the medical care component 
of the CPI-U for the preceding two months, daily dissemination of the 
Applicable Reference Value and underlying values of the Trusts will be 
sufficient to provide market participants an approximation of the value 
of the Shares.
    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: (a) 
What the Shares are; (b) the procedures for purchases and redemptions 
of Shares in MacroShares Units (and that Shares are not individually 
redeemable); (c) NYSE Arca Equities Rule 9.2(a), which imposes a duty 
of due diligence on its ETP Holders to learn the essential facts 
relating to every customer prior to trading the Shares; (d) the 
requirement that ETP Holders deliver a prospectus to investors 
purchasing newly issued Shares prior to or concurrently with the 
confirmation of a transaction; (e) trading information; (f) that the 
Shares are subject to various fees and expenses described in the 
Registration Statements; \23\ and (g) any exemptive, no-action, and 
interpretive relief granted by the Commission from any rules under the 
Act.

    \23\ See supra note 10.
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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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III. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\25\ for approving the proposal, as

[[Page 46693]]

modified by Amendment No. 1, prior to the thirtieth day after the date 
of publication of notice of filing of Amendment No. 1 in the Federal 
Register.\26\ In Amendment No. 1, NYSE Arca provided additional 
information concerning the dissemination of information relating to the 
Shares, and clarified the continued listing requirement with respect to 
the calculation and dissemination of an intraday Reference Price.\27\ 
Accordingly, Amendment No. 1 does not raise any new issues about the 
proposed rule change, and the Commission finds good cause for approving 
the NYSE Arca's proposal, as modified by Amendment No. 1, on an 
accelerated basis, pursuant to Section 19(b)(2) of the Act.
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    \25\ 15 U.S.C. 78s(b)(2).
    \26\ Pursuant to Section 19(b)(2) of the Act, 15 U.S.C. 
78s(b)(2), the Commission may not approve any proposed rule change, 
or amendment thereto, prior to the thirtieth day after the date of 
publication of the notice thereof, unless the Commission finds good 
cause for so doing.
    \27\ See supra note 5.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning Amendment No. 1, including whether Amendment No. 1 
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 an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2008-63 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2008-63. 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-NYSEArca-2008-63 and should 
be submitted on or before September 2, 2008.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\28\ that the proposed rule change (SR-NYSEArca-2008-63), as 
modified by Amendment No. 1 thereto, be, and it hereby is, approved on 
an accelerated basis.
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    \28\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18486 Filed 8-8-08; 8:45 am]

BILLING CODE 8010-01-P
