
[Federal Register: October 8, 2008 (Volume 73, Number 196)]
[Notices]               
[Page 59026-59027]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08oc08-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58704; File No. SR-NYSEArca-2008-92]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Accelerated Approval of a Proposed Rule Change Relating to the Listing 
of MacroShares Major Metro Housing Trusts

October 1, 2008.
    On August 25, 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 list and trade shares of the 
MacroShares Major Metro Housing Up Trust (``Up Trust'') and the 
MacroShares Major Metro Housing Down Trust (``Down Trust'') 
(collectively, the ``Trusts'').\3\ The proposed rule change was 
published in the Federal Register on September 15, 2008 for a 15-day 
comment period.\4\ The Commission received no comments on the proposal. 
This order grants approval to 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\ Shares of the Up Trust and the Down Trust are referred to 
collectively as ``Shares.''
    \4\ See Securities Exchange Act Release No. 58469 (September 5, 
2008), 73 FR 53306 (``Notice'').
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I. Description of the Proposal

    The Exchange proposes to list and trade the Shares pursuant to NYSE 
Arca Equities Rule 8.400, which governs the listing of Paired Trust 
Shares.\5\ The Shares will satisfy the initial and continued listing 
criteria applicable to Paired Trust Shares, which are set forth in NYSE 
Arca Equities Rule 8.400(d).\6\
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    \5\ The Shares are ``Trading Shares'' as defined in NYSE Arca 
Equities Rule 8.400(b)(1)(B).
    \6\ See e-mail from Michael Cavalier, Associate General Counsel, 
NYSE Euronext, to Christopher Chow, Senior Counsel, Commission, 
dated September 26, 2008.
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Description of the Trusts and the Shares

    The Up MacroShares and the Down MacroShares will be offered by the 
Up Trust and the Down Trust, respectively, established by MACRO 
Inflation Depositor, LLC, as depositor, under the laws of the State of 
New York. The Trusts are not registered with the Commission as 
investment companies.\7\ Distributions from the Trusts will be based on 
the value of the S&P/Case-Shiller Composite-10 Home Price Index 
(``Index''), as well as on prevailing interest rates on U.S. Treasury 
obligations. The last published value of the S&P/Case-Shiller 
Composite-10 Home Price Index is referred to as the ``Reference Value 
of the Index'' or ``Reference Value'' (as defined in the Notice). The 
S&P/Case-Shiller Home Price Indices measure the change in home prices 
in one or several geographic regions of the United States. They are 
calculated monthly and are publicly available for 20 major metropolitan 
areas.\8\
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    \7\ The Shares are being offered by the Trusts under the 
Securities Act of 1933, as amended, 15 U.S.C. 77a. On August 6, 
2008, the depositor filed with the Commission Registration 
Statements on Form S-1 (Amendment No. 1) for the Up MacroShares 
(File No. 333-151522) (``Up Trust Registration Statement'') and for 
the Down MacroShares (File No. 333-151523) (``Down Trust 
Registration Statement,'' and, together with the Up Trust 
Registration Statement, ``Registration Statements''). Descriptions 
herein relating to the operation of the Trusts and the S&P/Case-
Shiller Home Price Indices are based on the Registration Statements. 
Additionally, unless otherwise stated herein, defined terms have 
same meaning set forth in the Registration Statements.
    \8\ The S&P/Case-Shiller Composite-10 Home Price Index is a 
weighted average of the following 10 S&P/Case-Shiller Metro Area 
Home Price Indices: The S&P/Case-Shiller Boston Home Price Index, 
the S&P/Case-Shiller Chicago Home Price Index, the S&P/Case-Shiller 
Denver Home Price Index, the S&P/Case-Shiller Las Vegas Home Price 
Index, the S&P/Case-Shiller Los Angeles Home Price Index, the S&P/
Case-Shiller Miami Home Price Index, the S&P/Case-Shiller New York 
City Area Home Price Index, the S&P/Case-Shiller San Diego Home 
Price Index, the S&P/Case-Shiller San Francisco Home Price Index, 
and the S&P/Case-Shiller Washington, D.C. Home Price Index.
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    Additional information regarding the Shares may be found in the 
Notice,\9\ including but not limited to discussions of the Shares and 
Trusts, the Reference Value of the Index, the S&P/Case-Shiller Home 
Price Indices and the Index, the eligibility criteria, the MSA Index 
construction, the weighting of sales pairs, the Index governance, the 
Termination Triggers, the calculation of the Underlying Value, the 
availability of information, the initial and continued listing 
criteria, trading halts, trading rules, surveillance, and the 
Information Bulletin.
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    \9\ See supra note 4.
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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 \10\ and the rules and regulations thereunder applicable to a 
national securities exchange.\11\ In particular, the Commission finds 
that the proposal is consistent with Section 6(b)(5) of the Act,\12\ 
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. The Commission notes that, for the Shares to be listed 
and traded on the Exchange, such Shares must be in compliance with the 
initial and continued listing requirements under NYSE Arca Equities 
Rule 8.400.
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    \10\ 15 U.S.C. 78f.
    \11\ 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).
    \12\ 15 U.S.C. 78f(b)(5).
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    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,\13\ 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 CTA high-speed 
line. The Exchange further states that information regarding market 
price and volume of the Shares is and 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.
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    \13\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    The current Index level is available through major market data 
vendors (e.g.,

[[Page 59027]]

Bloomberg, and Reuters), and historical data regarding the Index and 
the Indices are published at http://www.indices.standardandpoors.com.
    The Commission also 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 values of the 
Up MacroShares and DownMacroShares will be calculated daily and made 
available to all market participants at the same time. Additionally, if 
it becomes aware that the per share value of either the Up MacroShares 
or DownMacroShares is not disseminated daily to all market participants 
at the same time, the Exchange will halt trading in the Shares until 
that information is available to all market participants.
    Though the Exchange has stated that the Index Committee has 
``complete discretion'' to determine how the Index and its related 
indices are calculated, an Exchange's obligations under Section 19(b) 
of the Act and Rule 19b-4 thereunder are independent of any discretion 
the Index Committee may have. Thus, the Exchange must monitor changes 
to the Shares, including any change to the calculation of the Index. 
The Exchange must assess whether any changes to the Shares would 
require it to submit a proposed rule change in accordance with Section 
19(b)(1) of the Act \14\ and Rule 19b-4 thereunder,\15\ or take any 
other action as appropriate, including halting trading of the Shares.
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    \14\ 15 U.S.C. 78s(b)(1).
    \15\ 17 CFR 240.19b-4.
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    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 Shares will conform to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.400.\16\
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    \16\ See supra note 6.
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    (2) The Exchange's surveillance 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.
    (3) Prior to the commencement of trading, the Exchange will inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares, 
prospectus delivery requirements, and other information, as described 
in more detail in the Notice.\17\
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    \17\ See supra note 4.
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    This approval order is based on the Exchange's representations.

III. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\18\ for approving the proposal prior to the thirteenth day 
after the date of publication of the Notice in the Federal Register. 
The Commission has received no comments regarding the proposed rule 
change, and the Commission finds that the proposed rule change does not 
raise any novel regulatory issues. Additionally, the Commission 
believes that accelerating approval of this proposal should benefit the 
market by making available to investors, without undue delay, 
additional products in the market for Paired Trust Shares.
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    \18\ 15 U.S.C. 78s(b)(2).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-NYSEArca-2008-92) be, and it 
hereby is, approved on an accelerated basis.
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    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23838 Filed 10-7-08; 8:45 am]

BILLING CODE 8011-01-P
