
[Federal Register: August 6, 2010 (Volume 75, Number 151)]
[Notices]               
[Page 47655-47661]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au10-142]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62620; File No. SR-NYSEArca-2010-71]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To List and Trade Shares of the ETFS White 
Metals Basket Trust

July 30, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on July 22, 2010, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade ETFS White Metals Basket 
Shares of the ETFS White Metals Basket Trust pursuant to NYSE Arca 
Equities Rule 8.201. The text of the proposed rule change is available 
at the Exchange, the Commission's Public Reference Room, and http://
www.nyse.com.

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

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

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

1. Purpose
    The Exchange proposes to list and trade ETFS White Metals Basket 
Shares (``Shares'') of the ETFS White Metals Basket Trust (``Trust'') 
under NYSE Arca Equities Rule 8.201. Under NYSE Arca Equities Rule 
8.201, the Exchange may propose to list and/or trade pursuant to 
unlisted trading privileges (``UTP'') ``Commodity-Based Trust Shares.'' 
\3\ The Commission has previously approved listing on the Exchange 
under NYSE Arca Equities Rule 8.201 of other issues of Commodity-Based 
Trust Shares. The Commission has approved listing on the Exchange of 
ETFS Silver Trust \4\, ETFS Gold Trust \5\, ETFS Platinum Trust \6\ and 
ETFS Palladium Trust (collectively, the ``ETFS Trusts'').\7\ In 
addition, The Commission has approved listing on the Exchange of 
streetTRACKS Gold Trust and iShares COMEX Gold Trust.\8\ Prior to their 
listing on the Exchange, the Commission approved listing of the 
streetTRACKS Gold Trust on the New York Stock Exchange (``NYSE'') and 
listing of iShares COMEX Gold Trust on the American Stock Exchange LLC 
(now known as ``NYSE Amex LLC'').\9\ In addition, the Commission has 
approved trading of the streetTRACKS Gold Trust and iShares Silver 
Trust on the Exchange pursuant to UTP.\10\ The Commission also has 
approved listing of the iShares Silver Trust on the Exchange \11\ and, 
previously, listing of the iShares Silver Trust on the American Stock 
Exchange LLC.\12\
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    \3\ Commodity-Based Trust Shares are securities issued by a 
trust that represent investors' discrete identifiable and undivided 
beneficial ownership interest in the commodities deposited into the 
Trust.
    \4\ Securities Exchange Act Release No. 59781 (April 17, 2009), 
74 FR 18771 (April 24, 2009) (SR-NYSEArca-2009-28).
    \5\ Securities Exchange Act Release No. 59895 (May 8, 2009), 74 
FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40).
    \6\ Securities Exchange Act Release No. 61219 (December 22, 
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95).
    \7\ Securities Exchange Act Release No. 61220 (December 22, 
2009), 74 FR 68895 (December 29, 2009) (SR-NYSEArca-2009-94).
    \8\ See Securities Exchange Act Release Nos. 56224 (August 8, 
2007), 72 FR 45850 (August 15, 2007) (SR-NYSEArca-2007-76) (order 
approving listing on the Exchange of the streetTRACKS Gold Trust); 
56041 (July 11, 2007), 72 FR 39114 (July 17, 2007) (SR-NYSEArca-
2007-43) (order approving listing on the Exchange of iShares COMEX 
Gold Trust).
    \9\ See Securities Exchange Act Release Nos. 50603 (October 28, 
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (order 
approving listing of streetTRACKS Gold Trust on NYSE); 51058 
(January 19, 2005), 70 FR 3749 (January 26, 2005) (SR-Amex-2004-38) 
(order approving listing of iShares COMEX Gold Trust on the American 
Stock Exchange LLC).
    \10\ See Securities Exchange Act Release Nos. 53520 (March 20, 
2006), 71 FR 14977 (March 24, 2006) (SR-PCX-2005-117) (order 
approving trading on the Exchange pursuant to UTP of the iShares 
Silver Trust); 51245 (February 23, 2005), 70 FR 10731 (March 4, 
2005) (SR-PCX-2004-117) (order approving trading on the Exchange of 
the streetTRACKS Gold Trust pursuant to UTP).
    \11\ See Securities Exchange Act Release Nos. 58956 (November 
14, 2008), 73 FR 71074 (November 24, 2008) (SR-NYSEArca-2008-124) 
(order approving listing on the Exchange of the iShares Silver 
Trust).
    \12\ See Securities Exchange Act Release No. 53521 (March 20, 
2006), 71 FR 14967 (March 24, 2006) (SR-Amex-2005-72) (order 
approving listing on the American Stock Exchange LLC of the iShares 
Silver Trust).
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    The Trust will issue Shares which represent units of fractional 
undivided beneficial interest in and ownership of the Trust. The 
investment objective of the Trust is for the Shares to reflect the 
performance of the price of physical silver, platinum and palladium in 
the proportions held by the Trust, less the expenses of the Trust's 
operations.\13\
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    \13\ See the registration statement for the Trust on Form S-1, 
filed with the Commission on May 27, 2010 (No. 333-167166) 
(``Registration Statement''). The descriptions of the Trust, the 
Shares, the Bullion, and the regulation and operation of the 
commodity markets contained herein are based on the Registration 
Statement.
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    ETFS Services USA LLC is the sponsor of the Trust (``Sponsor''), 
The Bank of New York Mellon is the trustee of the Trust 
(``Trustee''),\14\ and JPMorgan Chase Bank, N.A. is the custodian of 
the Trust (``Custodian'').\15\
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    \14\ The Trustee is generally responsible for the day-to-day 
administration of the Trust, including keeping the Trust's 
operational records. The Trustee's principal responsibilities 
include (1) transferring the Trust's Bullion (silver, platinum and 
palladium) as needed to pay the Sponsor's Fee in Bullion (Bullion 
transfers are expected to occur approximately monthly in the 
ordinary course), (2) valuing the Trust's Bullion and calculating 
the NAV of the Trust and the NAV per Share, (3) receiving and 
processing orders from Authorized Participants to create and redeem 
Baskets and coordinating the processing of such orders with the 
Custodian and DTC, (4) selling the Trust's Bullion as needed to pay 
any extraordinary Trust expenses that are not assumed by the 
Sponsor, (5) when appropriate, making distributions of cash or other 
property to Shareholders, and (6) receiving and reviewing reports 
from or on the Custodian's custody of and transactions in the 
Trust's Bullion.
    \15\ The Custodian is responsible for safekeeping for the Trust 
Bullion deposited with it by Authorized Participants in connection 
with the creation of Baskets. The Custodian is also responsible for 
selecting the Zurich Sub-Custodians and its other subcustodians, if 
any. The Custodian facilitates the transfer of Bullion in and out of 
the Trust through the unallocated Bullion accounts it or a Bullion 
clearing bank will maintain for each Authorized Participant and the 
unallocated and allocated Bullion accounts it will maintain for the 
Trust. The Custodian will hold at its London, England vault premises 
that portion of the Trust's allocated Bullion to be held in London. 
The Zurich Sub-Custodians will hold at their Zurich, Switzerland 
vault premises that portion of the Trust's allocated platinum and 
palladium to be held in Zurich on behalf of the Custodian. The 
Custodian is responsible for allocating specific bars of physical 
silver and specific plates or ingots of physical platinum and 
palladium to the Trust's allocated Bullion account. The Custodian 
will provide the Trustee with regular reports detailing the Bullion 
transfers in and out of the Trust's unallocated and allocated 
Bullion accounts and identifying the silver bars and the platinum 
and palladium plates or ingots held in the Trust's allocated Bullion 
account.

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[[Page 47656]]

    The Exchange represents that the Shares satisfy the requirements of 
NYSE Arca Equities Rule 8.201 and thereby qualify for listing on the 
Exchange.\16\ The Shares will be book-entry only and individual 
certificates will not be issued for the Shares.
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    \16\ With respect to application of Rule 10A-3 (17 CFR 240.10A-
3) under the Securities Exchange of 1934 (``Act'') (15 U.S.C. 78a), 
the Trust relies on the exemption contained in Rule 10A-3(c)(7).
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    The NAV of the Trust is the aggregate value of the Trust's assets 
less its liabilities (which include estimated accrued but unpaid fees 
and expenses). In determining the NAV of the Trust, the Trustee will 
value the prices of Bullion as determined by the relevant London 
Fixes.\17\ Silver held by the Trust will be valued on the basis of the 
price of an ounce of silver as set at approximately 12:00 noon London, 
England time (London PM Fix) and performed in London by three market 
making members of The London Bullion Market Association (``LBMA''). 
Platinum held by the Trust will be valued on the basis of the price of 
an ounce of platinum as set by the afternoon session of the twice daily 
fix of the price of an ounce of platinum which starts at 2:00 p.m. 
London, England time (London PM Fix) and is performed in London by the 
four fixing members of The London Platinum and Palladium Market 
(``LPPM''). Palladium held by the Trust will be valued on the basis of 
the price of an ounce of palladium as set by the afternoon session of 
the twice daily fix of the price of an ounce of palladium which starts 
at 2:00 PM London, England time (London PM Fix) and is performed in 
London by the four fixing members of the LPPM.\18\ The Trustee will 
determine the NAV of the Trust on each day the NYSE Arca is open for 
regular trading, as promptly as practicable after 4 p.m., Eastern Time 
(``E.T.''). If no London PM Fixes are made for silver, platinum or 
palladium on a particular evaluation day or has not been announced by 4 
p.m. E.T. on a particular evaluation day, the next most recent London 
price fix for such metal or metals will be used in the determination of 
the NAV of the Trust, unless the Sponsor determines that such price is 
inappropriate to use as basis for such determination.\19\ The Trustee 
will also determine the NAV per Share, which equals the NAV of the 
Trust, divided by the number of outstanding Shares.
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    \17\ Terms relating to the Trust and the Shares referred to, but 
not defined, herein are defined in the Registration Statement.
    \18\ The operation of the London Fixes for silver, platinum and 
palladium is described in the registration statements on Form S-1 
for the ETFS Silver, Platinum and Palladium Trusts, respectively, 
and in the Exchange's proposed rule changes pursuant to Rule 19b-4 
under the Act in connection with Exchange listing of such Trusts. 
See notes 4-7, supra.
    \19\ See discussion under ``Operation of the Trust'', infra, 
regarding procedures used when the Sponsor determines that the 
Bullion price is inappropriate to use.
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Market Regulation
    According to the Registration Statement, the global silver, 
platinum and palladium markets are overseen and regulated by both 
governmental and self-regulatory organizations. In addition, certain 
trade associations have established rules and protocols for market 
practices and participants. In the United Kingdom, responsibility for 
the regulation of the financial market participants, including the 
major participating members of the LBMA and the LPPM, falls under the 
authority of the Financial Services Authority (FSA) as provided by the 
Financial Services and Markets Act 2000 (FSM Act). Under this act, all 
UK-based banks, together with other investment firms, are subject to a 
range of requirements, including fitness and properness, capital 
adequacy, liquidity, and systems and controls.
    The FSA is responsible for regulating investment products, 
including derivatives, and those who deal in investment products. 
Regulation of spot, commercial forwards, and deposits of Bullion not 
covered by the FSM Act is provided for by The London Code of Conduct 
for Non-Investment Products, which was established by market 
participants in conjunction with the Bank of England.
    The Tokyo Commodity Exchange, Inc. (``TOCOM'') has authority to 
perform financial and operational surveillance on its members' trading 
activities, scrutinize positions held by members and large-scale 
customers, and monitor the price movements of futures markets by 
comparing them with cash and other derivative markets' prices. To act 
as a Futures Commission Merchant Broker, a broker must obtain a license 
from Japan's Ministry of Economy, Trade and Industry (METI), the 
regulatory authority that oversees the operations of the TOCOM.\20\
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    \20\ Additional information regarding operation of the silver, 
platinum and palladium markets, and the regulation of these markets, 
is described in the Registration Statement and in the Commission 
notices of the Exchange's proposed rule changes regarding listing of 
the ETFS Trusts. See Securities Exchange Act Release Nos. 59781 
(April 17, 2009), 74 FR 18771 (April 24, 2009) (SR-NYSEArca-2009-28) 
(notice and order granting accelerated approval regarding listing of 
ETFS Silver Trust); 60970 (November 9, 2009), 74 FR 59319 (November 
17, 2009) (SR-NYSEArca-2009-95) (notice regarding listing of ETFS 
Platinum Trust); 60971 (November 9, 2009), 74 FR 59283 (November 17, 
2009) (SR-NYSEArca-2009-94) (notice regarding listing of ETFS 
Palladium Trust).
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Operation of the Trust
    The Trust is a common law trust, formed under New York law pursuant 
to the Trust Agreement. The Trust holds Bullion and is expected from 
time to time to issue Baskets in exchange for deposits of Bullion and 
to distribute Bullion in connection with redemptions of Baskets. The 
investment objective of the Trust is for the Shares to reflect the 
performance of the prices of physical silver, platinum and palladium in 
the proportions held by the Trust, less the Trust's expenses.
    According to the Registration Statement, the Trust is not 
registered as an investment company under the Investment Company Act of 
1940 and is not required to register under such act. The Trust will not 
hold or trade in commodity futures contracts regulated by the Commodity 
Exchange Act \21\ (``CEA''), as administered by the Commodity Futures 
Trading Commission (``CFTC''). The Trust is not a commodity pool for 
purposes of the CEA, and neither the Sponsor nor the Trustee is subject 
to regulation as a commodity pool operator or a commodity trading 
adviser in connection with the Shares.
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    \21\ 7 U.S.C. 1 et seq.
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    The Trust expects to create and redeem Shares from time to time but 
only in Baskets of 50,000 each. The number of outstanding Shares is 
expected to increase and decrease from time to time as a result of the 
creation and redemption of Baskets. The creation and redemption of 
Baskets requires the delivery to the Trust or the distribution by the 
Trust of the amount of Bullion and any cash represented by the Baskets 
being created or redeemed. The total amount of Bullion and any cash 
required for the creation of Baskets will be based on the combined NAV 
of the number of Baskets being created or redeemed. The initial amount 
of Bullion required for deposit with the Trust to create Shares will be 
50,000 ounces of silver, 500 ounces of platinum and 400 ounces of 
palladium per Basket.\22\ The

[[Page 47657]]

number of ounces of Bullion required to create a Basket or to be 
delivered upon a redemption of a Basket will gradually decrease over 
time. This is because the Shares comprising a Basket will represent a 
decreasing amount of Bullion due to the delivery or sale of the Trust's 
Bullion to pay the Sponsor's Fee or the Trust's expenses not assumed by 
the Sponsor.
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    \22\ As of July 12, 2010, the value of a Basket was 
approximately $1,835,525. The value of Bullion required for the 
creation of a Basket was approximately $895,125 for silver ($17.90 
per ounce times 50,000 ounces); $759,000 for platinum ($1,518.00 per 
ounce times 500 ounces); and $181,400 for palladium ($453.50 per 
ounce times 400 ounces). These values represent weightings for 
silver, platinum and palladium in a Basket of approximately 49%, 
41%, and 10%, respectively.
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    The Trustee will determine the NAV of the Trust on each day that 
the NYSE Arca is open for regular trading, as promptly as practicable 
after 4:00 p.m., E.T. The NAV of the Trust is the aggregate value of 
the Trust's assets less its estimated accrued but unpaid liabilities 
(which include accrued expenses). In determining the Trust's NAV, the 
Trustee will value the silver held by the Trust based on the London PM 
Fix price for an ounce of silver or such other publicly available price 
as the Sponsor may deem fairly represents the commercial value of the 
Trust's silver, the platinum held by the Trust based on the London PM 
Fix price for an ounce of platinum or such other publicly available 
price as the Sponsor may deem fairly represents the commercial value of 
the Trust's platinum and the palladium held by the Trust based on the 
London PM Fix price for an ounce of palladium or such other publicly 
available price as the Sponsor may deem fairly represents the 
commercial value of the Trust's palladium. The Trustee will also 
determine the NAV per Share. If on a day when the Trust's NAV is being 
calculated the London PM Fix is not available or has not been announced 
by 4:00 p.m., E.T. for any Bullion metal, the price from the next most 
recent London Fix (AM or PM) for such Bullion metal will be used, 
unless the Sponsor determines that such price is inappropriate to use.
    Investors may obtain on a 24-hour basis silver, platinum and 
palladium pricing information based on the spot price for an ounce of 
each Bullion metal from various financial information service 
providers. Current spot prices are also generally available with bid/
ask spreads from physical Bullion dealers. In addition, the Trust's Web 
site (http://www.etfsecurities.com) will provide ongoing pricing 
information for silver, platinum and palladium spot prices and the 
Shares. Market prices for the Shares will be available from a variety 
of sources including brokerage firms, information Web sites and other 
information service providers. The NAV of the Trust will be published 
by the Sponsor on each day that the NYSE Arca is open for regular 
trading and will be posted on the Trust's Web site.
    According to the Registration Statement, the most significant 
silver, platinum and palladium futures exchanges are the COMEX and the 
TOCOM. Trading on these exchanges is based on fixed delivery dates and 
transaction sizes for the futures and options contracts traded. The 
COMEX operates through a central clearance system. On June 6, 2003, 
TOCOM adopted a similar clearance system.
Secondary Market Trading
    According to the Registration Statement, while the Trust's 
investment objective is for the Shares to reflect the performance of 
prices of physical silver, platinum and palladium in the proportions 
held by the Trust, less the expenses of the Trust, the Shares may trade 
in the secondary market on the NYSE Arca at prices that are lower or 
higher relative to their NAV per Share. The amount of the discount or 
premium in the trading price relative to the NAV per Share may be 
influenced by non-concurrent trading hours between the NYSE Arca and 
COMEX, and the London and Zurich Bullion markets. While the Shares will 
trade on the NYSE Arca until 8 p.m., E.T., liquidity in the global 
silver, platinum and palladium markets will be reduced after the close 
of the COMEX at 1:30 p.m., E.T. As a result, during this time, trading 
spreads, and the resulting premium or discount, on the Shares may 
widen.
Creation and Redemption of Shares
    The Trust will create and redeem Shares from time to time, but only 
in one or more Baskets of 50,000 Shares. The creation and redemption of 
Baskets will only be made in exchange for the delivery to the Trust or 
the distribution by the Trust of the amount of physical silver, 
platinum and palladium and any cash represented by the Baskets being 
created or redeemed, the amount of which will be based on the combined 
NAV of the number of Shares included in the Baskets being created or 
redeemed determined on the day the order to create or redeem Baskets is 
properly received.
    Authorized Participants are the only persons that may place orders 
to create and redeem Baskets, as described in the Registration 
Statement.
Creation Procedures
    On any business day, an Authorized Participant may place an order 
with the Trustee to create one or more Baskets. Creation and redemption 
orders will be accepted on ``business days'' the NYSE Arca is open for 
regular trading. Settlements of such orders requiring receipt or 
delivery, or confirmation of receipt or delivery, of Bullion in the 
United Kingdom, Zurich or another jurisdiction will occur on ``business 
days'' when (1) banks in the United Kingdom, Zurich and such other 
jurisdiction and (2) the London and Zurich Bullion markets are 
regularly open for business. Purchase orders must be placed no later 
than 3:59:59 p.m. E.T. on each business day the NYSE Arca is open for 
regular trading. By placing a purchase order, an Authorized Participant 
agrees to deposit Bullion with the Trust. The creation and redemption 
of Baskets will only be made in exchange for the delivery to the Trust 
or the distribution by the Trust of the amount of Bullion and any cash 
represented by the Baskets being created or redeemed, the amount of 
which will be based on the combined NAV of the number of Shares 
included in the Baskets being created or redeemed determined on the day 
the order to create or redeem Baskets is properly received.
    Each Creation Basket Deposit, which is the total deposit required 
to create a Basket, will be an amount of Bullion and cash, if any, that 
is in the same proportion to the total assets of the Trust (net of 
estimated accrued but unpaid fees, expenses and other liabilities) on 
the date an order to purchase one or more Baskets is properly received 
as the number of Shares comprising the number of Baskets to be created 
in respect of the deposit bears to the total number of Shares 
outstanding on the date such order is properly received. The Bullion 
comprising a deposit shall be in a proportion equal to 50,000 ounces of 
silver, 500 ounces of platinum and 400 ounces of palladium.\23\
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    \23\ The proportion of Bullion comprising a deposit will remain 
the same following inception of the Trust. The amount of silver, 
platinum and palladium in the required deposit is determined by 
dividing the number of ounces of each metal held by the Trust by the 
number of Baskets outstanding, as adjusted for the amount of Bullion 
constituting estimated accrued but unpaid fees and expenses of the 
Trust.
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    An Authorized Participant who places a purchase order is 
responsible for crediting its Authorized Participant Unallocated 
Account with the required Bullion deposit amount by the third business 
day in London or Zurich, as

[[Page 47658]]

applicable, following the purchase order date. Upon receipt of the 
Bullion deposit amount, the Custodian, after receiving appropriate 
instructions from the Authorized Participant and the Trustee, will 
transfer on the third business day following the purchase order date 
the Bullion deposit amount from the Authorized Participant Unallocated 
Account to the Trust Unallocated Account and the Trustee will direct 
DTC to credit the number of Baskets ordered to the Authorized 
Participant's DTC account. The expense and risk of delivery, ownership 
and safekeeping of Bullion until such Bullion has been received by the 
Trust is borne solely by the Authorized Participant.
Redemption Procedures
    According to the Registration Statement, the procedures by which an 
Authorized Participant can redeem one or more Baskets will mirror the 
procedures for the creation of Baskets. On any business day, an 
Authorized Participant may place an order with the Trustee to redeem 
one or more Baskets. Redemption orders must be placed no later than 
3:59:59 p.m. E.T. on each business day the NYSE Arca is open for 
regular trading. A redemption order so received is effective on the 
date it is received in satisfactory form by the Trustee. The redemption 
procedures allow Authorized Participants to redeem Baskets and do not 
entitle an individual Shareholder to redeem any Shares in an amount 
less than a Basket, or to redeem Baskets other than through an 
Authorized Participant.
    By placing a redemption order, an Authorized Participant agrees to 
deliver the Baskets to be redeemed through DTC's book-entry system to 
the Trust not later than the third business day following the effective 
date of the redemption order.
Determination of Redemption Distribution
    The redemption distribution from the Trust will consist of a credit 
to the redeeming Authorized Participant's Authorized Participant 
Unallocated Account representing the amount of the Bullion held by the 
Trust evidenced by the Shares being redeemed. Redemption distributions 
will be subject to the deduction of any applicable tax or other 
governmental charges which may be due.
Creation and Redemption Transaction Fee
    To compensate the Trustee for services in processing the creation 
and redemption of Baskets, an Authorized Participant will be required 
to pay a transaction fee to the Trustee of $500 per order to create or 
redeem Baskets. An order may include multiple Baskets. The transaction 
fee may be reduced, increased or otherwise changed by the Trustee with 
the consent of the Sponsor. The Trustee shall notify DTC of any 
agreement to change the transaction fee and will not implement any 
increase in the fee for the redemption of Baskets until 30 days after 
the date of the notice.
Termination Events
    The Trustee will terminate and liquidate the Trust if the aggregate 
market capitalization of the Trust, based on the closing price for the 
Shares, was less than $350 million (as adjusted for inflation) at any 
time after the first anniversary after the Trust's formation and the 
Trustee receives, within six months after the last of those trading 
days, notice from the Sponsor of its decision to terminate the Trust. 
The Trustee will terminate the Trust if the CFTC determines that the 
Trust is a commodities pool under the CEA. The Trustee may also 
terminate the Trust upon the agreement of the owners of beneficial 
interests in the Shares (``Shareholders'') owning at least 75% of the 
outstanding Shares.
    The Trust has no fixed termination date.
    Additional information regarding the Shares and the operation of 
the Trust, including termination events, risks, and creation and 
redemption procedures, are described in the Registration Statement.
Valuation of Bullion, Definition of Net Asset Value and Adjusted Net 
Asset Value
    On each day that the NYSE Arca is open for regular trading, as 
promptly as practicable after 4 p.m., E.T. on such day (Evaluation 
Time), the Trustee will evaluate the Bullion held by the Trust and 
determine both the Adjusted Net Asset Value (``ANAV''), as defined 
below, and the NAV of the Trust.
    At the Evaluation Time, the Trustee will value the Trust's Bullion 
on the basis of that day's London PM Fix for such metal or, if no 
London PM Fix is made for a metal on such day or has not been announced 
by the Evaluation Time, the next most recent London price fix for such 
metal determined prior to the Evaluation Time will be used, unless the 
Sponsor determines that such price is inappropriate as a basis for 
evaluation. In the event the Sponsor determines that the London PM Fix 
or such other publicly available price as the Sponsor may deem fairly 
represents the commercial value of the Trust's Bullion metal is not an 
appropriate basis for evaluation of the Trust's Bullion metal, it shall 
identify an alternative basis for such evaluation to be employed by the 
Trustee.
    Once the value of the Bullion has been determined, the Trustee will 
subtract all estimated accrued but unpaid fees (other than the fees 
accruing for such day on which the valuation takes place computed by 
reference to the value of the Trust or its assets), expenses and other 
liabilities of the Trust from the total value of the Bullion and all 
other assets of the Trust (other than any amounts credited to the 
Trust's reserve account, if established). The resulting figure is the 
ANAV of the Trust. The ANAV of the Trust is used to compute the 
Sponsor's Fee.
Liquidity
    Liquidity in the OTC market can vary from time to time during the 
course of the 24-hour trading day. Fluctuations in liquidity are 
reflected in adjustments to dealing spreads--the differential between a 
dealer's ``buy'' and ``sell'' prices. The period of greatest liquidity 
in the Bullion markets generally occurs at the time of day when trading 
in the European time zones overlaps with trading in the United States, 
which is when OTC market trading in London, New York, Zurich and other 
centers coincides with futures and options trading on the COMEX. This 
period lasts for approximately four hours each New York business day 
morning.
Availability of Information Regarding Bullion Prices
    Currently, the Consolidated Tape Plan does not provide for 
dissemination of the spot price of commodities such as silver, platinum 
and palladium over the Consolidated Tape. However, there will be 
disseminated over the Consolidated Tape the last sale price for the 
Shares, as is the case for all equity securities traded on the Exchange 
(including exchange-traded funds). In addition, there is a considerable 
amount of Bullion market information available on public Web sites and 
through professional and subscription services.
    Investors may obtain on a 24-hour basis Bullion pricing information 
based on the spot price for an ounce of Bullion from various financial 
information service providers, such as Reuters and Bloomberg. Reuters 
and Bloomberg provide at no charge on their Web sites delayed 
information regarding the spot price of Bullion and last sale prices of 
Bullion futures, as well as information about news and developments in 
the Bullion market. Reuters and Bloomberg also offer a professional 
service to subscribers for a fee that provides

[[Page 47659]]

information on Bullion prices directly from market participants. An 
organization named EBS provides an electronic trading platform to 
institutions such as bullion banks and dealers for the trading of spot 
Bullion, as well as a feed of live streaming prices to Reuters and 
Moneyline Telerate subscribers. Complete real-time data for Bullion 
futures and options prices traded on COMEX are available by 
subscription from Reuters and Bloomberg. COMEX also provides delayed 
futures and options information on current and past trading sessions 
and market news free of charge on its Web site. There are a variety of 
other public Web sites providing information on Bullion, ranging from 
those specializing in precious metals to sites maintained by major 
newspapers, such as The Wall Street Journal. In addition, the London AM 
Fix and London PM Fix are publicly available at no charge at [sic] or 
http://www.thebulliondesk.com.
    The Trust's Web site will provide an intraday indicative value 
(``IIV'') per share for the Shares, updated at least every 15 seconds, 
as calculated by the Exchange or a third party financial data provider, 
during the Exchange's Core Trading Session (9:30 a.m. to 4 p.m., E.T.). 
The IIV is calculated by multiplying the indicative spot price of 
Bullion by the quantity of Bullion backing each Share as of the last 
calculation date. The Trust's Web site will also provide the NAV of the 
Trust as calculated each business day by the Sponsor. In addition, the 
Web site for the Trust will contain the following information, on a per 
Share basis, for the Trust: (a) The NAV as of the close of the prior 
business day and the mid-point of the bid-ask price \24\ at the close 
of trading in relation to such NAV (``Bid/Ask Price''), and a 
calculation of the premium or discount of such price against such NAV; 
and (b) data in chart format displaying the frequency distribution of 
discounts and premiums of the Bid/Ask Price against the NAV, within 
appropriate ranges, for each of the four previous calendar quarters. 
The Web site for the Trust will also provide the following information: 
The Creation Basket Deposit, the Trust's prospectus, and as the two 
most recent reports to stockholders. Finally, the Trust's Web site will 
also provide the last sale price of the Shares as traded in the U.S. 
market. The Exchange will provide on its Web site (http://www.nyx.com) 
a link to the Trust's Web site. In addition, the Exchange will make 
available over the Consolidated Tape quotation information, trading 
volume, closing prices and NAV for the Shares from the previous day.
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    \24\ The bid-ask price of the Trust is determined using the 
highest bid and lowest offer on the Consolidated Tape as of the time 
of calculation of the closing day NAV.
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Criteria for Initial and Continued Listing
    The Trust will be subject to the criteria in NYSE Arca Equities 
Rule 8.201(e) for initial and continued listing of the Shares.
    A minimum of 100,000 Shares will be required to be outstanding at 
the start of trading. The minimum number of shares required to be 
outstanding is comparable to requirements that have been applied to 
previously listed shares of the streetTRACKS Gold Trust, the iShares 
Silver Trust, the ETF Trusts and exchange-traded funds. The Exchange 
believes that the anticipated minimum number of Shares outstanding at 
the start of trading is sufficient to provide adequate market 
liquidity.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Fund subject to the Exchange's existing rules 
governing the trading of equity securities. Trading in the Shares on 
the Exchange will occur in accordance with NYSE Arca Equities Rule 
7.34(a). The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.
    Further, NYSE Arca Equities Rule 8.201 sets forth certain 
restrictions on ETP Holders acting as registered Market Makers in the 
Shares to facilitate surveillance. Pursuant to NYSE Arca Equities Rule 
8.201(g), an ETP Holder acting as a registered Market Maker in the 
Shares is required to provide the Exchange with information relating to 
its trading in the applicable underlying Bullion, related futures or 
options on futures, or any other related derivatives. Commentary .04 of 
NYSE Arca Equities Rule 6.3 requires an ETP Holder acting as a 
registered Market Maker, and its affiliates, in the Shares to 
establish, maintain and enforce written policies and procedures 
reasonably designed to prevent the misuse of any material nonpublic 
information with respect to such products, any components of the 
related products, any physical asset or commodity underlying the 
product, applicable currencies, underlying indexes, related futures or 
options on futures, and any related derivative instruments. (including 
the Shares).
    As a general matter, the Exchange has regulatory jurisdiction over 
its ETP Holders and their associated persons, which include any person 
or entity controlling an ETP Holder, as well as a subsidiary or 
affiliate of an ETP Holder that is in the securities business. A 
subsidiary or affiliate of an ETP Holder that does business only in 
commodities or futures contracts would not be subject to Exchange 
jurisdiction, but the Exchange could obtain information regarding the 
activities of such subsidiary or affiliate through surveillance sharing 
agreements with regulatory organizations of which such subsidiary or 
affiliate is a member.
    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 on the Exchange in the Shares 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 conditions in the underlying Bullion 
market have caused disruptions and/or lack of trading, or (2) whether 
other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present.\25\ In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule.\26\
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    \25\ The Exchange, pursuant to NYSE Arca Equities Rule 7.12, has 
discretion to halt trading in the Shares if the London Fixes are not 
determined for an extended time period based on extraordinary 
circumstances or market conditions.
    \26\ See NYSE Arca Equities Rule 7.12.
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Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products (including Commodity-Based 
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. Also, pursuant to NYSE 
Arca Equities Rule 8.201(g), the Exchange is able to obtain information 
regarding trading in the Shares and the underlying Bullion, Bullion 
futures contracts, options on Bullion futures, or any other Bullion 
derivative, through ETP Holders acting as registered Market Makers, in 
connection with such ETP

[[Page 47660]]

Holders' proprietary or customer trades through ETP Holders which they 
effect on any relevant market. In addition, the Exchange may obtain 
trading information via the Intermarket Surveillance Group (``ISG'') 
from other exchanges who are members of the ISG.\27\ COMEX is an ISG 
member.
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    \27\ A list of ISG members is available at [sic]. The Exchange 
notes that TOCOM is not an ISG member and the Exchange does not have 
in place a comprehensive surveillance sharing agreement with such 
market. In addition, the Exchange does not have access to 
information regarding Bullion-related OTC transactions in spot, 
forwards, options or other derivatives.
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Information Bulletin
    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. Specifically, the 
Information Bulletin will discuss the following: (1) The procedures for 
purchases and redemptions of Shares in Baskets (including noting that 
Shares are not individually redeemable); (2) 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; (3) how information regarding the IIV is disseminated; (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; (5) the possibility that trading spreads 
and the resulting premium or discount on the Shares may widen as a 
result of reduced liquidity of Bullion trading during the Core and Late 
Trading Sessions after the close of the major world Bullion markets; 
and (6) trading information. For example, the Information Bulletin will 
advise ETP Holders, prior to the commencement of trading, of the 
prospectus delivery requirements applicable to the Trust. The Exchange 
notes that investors purchasing Shares directly from the Trust (by 
delivery of the Creation Basket Deposit) will receive a prospectus. ETP 
Holders purchasing Shares from the Trust for resale to investors will 
deliver a prospectus to such investors.
    In addition, the Information Bulletin will reference that the Trust 
is subject to various fees and expenses described in the Registration 
Statement. The Information Bulletin will also reference the fact that 
there is no regulated source of last sale information regarding 
physical Bullion, that the Commission has no jurisdiction over the 
trading of Bullion as physical commodities, and that the CFTC has 
regulatory jurisdiction over the trading of Bullion futures contracts 
and options on Bullion futures contracts.
    The Information Bulletin will also discuss any relief, if granted, 
by the Commission or the staff from any rules under the Act.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \28\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5),\29\ in particular, because it is 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments and perfect the 
mechanisms of a free and open market and to protect investors and the 
public interest. The Exchange believes that the proposed rule change 
will facilitate the listing and trading of an additional type of 
commodity-based product that will enhance competition among market 
participants, to the benefit of investors and the marketplace.
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    \28\ 15 U.S.C. 78f(b).
    \29\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2010-71 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2010-71. 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 Web site 
viewing and printing 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 the 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-2010-71 and should be submitted on or before August 27, 2010.
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    \30\ 17 CFR 200.30-3(a)(12).


[[Page 47661]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19373 Filed 8-5-10; 8:45 am]
BILLING CODE 8010-01-P

