Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change to Trade ETFs Based on the Dow Jones STOXX 50 and the Dow Jones EURO STOXX 50 Indexes Pursuant to Unlisted Trading Privileges, 22932-22934 [E5-2126]

Download as PDF 22932 Federal Register / Vol. 70, No. 84 / Tuesday, May 3, 2005 / Notices Paper comments: • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. All submissions should refer to File Number SR–Amex–2005–037. 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 (https://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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the Amex. 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–Amex– 2005–037 and should be submitted on or before May 24, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–2125 Filed 5–2–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51616; File No. SR–Amex– 2005–034] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change to Trade ETFs Based on the Dow Jones STOXX 50 and the Dow Jones EURO STOXX 50 Indexes Pursuant to Unlisted Trading Privileges April 26, 2005. 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 March 21, 2005, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice and order to solicit comments on the proposal from interested persons and to approve the proposal on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to trade shares of two exchange-traded funds (‘‘ETFs’’)—the streetTRACKS Dow Jones STOXX 50 Fund (ticker symbol: FEU) and streetTRACKS Dow Jones EURO STOXX 50 Fund (ticker symbol: FEZ)—pursuant to unlisted trading privileges (‘‘UTP’’). The text of the proposed rule change is available from the Exchange’s Web site (https:// www.amex.com/), at the principal office of the Exchange, and at the Commission’s Public Reference Room. 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 Exchange 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 these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1 15 8 17 CFR 200.30–3(a)(12). VerDate jul<14>2003 15:43 May 02, 2005 2 17 Jkt 205001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00092 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to trade FEU and FEZ, which are Index Fund Shares under Amex Rules 1000A et seq., pursuant to UTP. Each fund is a separate series of the streetTRACKS Index Shares Funds. STOXX Ltd., a ¨ joint venture between Deutsche Borse AG, Dow Jones & Company (‘‘Dow Jones’’), and the SWX Group, services the Dow Jones STOXX 50 Index and Dow Jones EURO STOXX 50 Index. Both indexes track the large-cap markets of the European and Eurozone regions. Their components have a high degree of liquidity and represent the largest companies across all 18 market sectors defined by the Dow Jones Global Classification standard. The Commission previously approved the original listing and trading of FEU and FEZ on the New York Stock Exchange, Inc. (‘‘NYSE’’).3 The Exchange deems the shares of these ETFs to be equity securities, thus rendering trading in these shares subject to the Exchange’s existing rules governing the trading of equity securities.4 The trading hours for these ETFs on the Exchange would be 9:30 a.m. to 4:15 p.m. Eastern time (‘‘ET’’).5 Quotations for and last sale information regarding these ETFs are disseminated through the Consolidated Tape Association (‘‘CTA’’). The NAV of each ETF is calculated by the funds’ custodian, State Street Bank and Trust Company, and determined each business day, normally at the close of regular trading on the NYSE. To provide updated information relating to these ETFs for use by investors, professionals, and persons wishing to create or redeem shares in creation unit aggregations (‘‘creation units’’), Bloomberg calculates an indicative optimized portfolio value 3 See Securities Exchange Act Release No. 46686 (October 18, 2002), 67 FR 65388 (October 24, 2002) (‘‘NYSE Approval Order’’). Shares of these ETFs commenced trading on the NYSE in October 2002. 4 This includes Amex Rule 154, Commentary .04(c), which provides that stop and stop limit orders to buy or sell a security (other than an option, which is covered by Amex Rule 950(f) and Commentary thereto) the price of which is derivatively priced based upon another security or index of securities, may with the prior approval of a Floor Official, be elected by a quotation, as set forth in Commentary .04(c)(i–v). 5 In its initial proposal to list and trade FEU and FEZ, the NYSE stated incorrectly that the close of trading in these ETFs would be 4:00 p.m. See NYSE Approval Order, 67 FR at 65391. The NYSE later corrected the misstatement and specified that the ETFs may be traded until 4:15 p.m. See Securities Exchange Act Release No. 49776 (May 26, 2004), 69 FR 31439 (June 3, 2004). E:\FR\FM\03MYN1.SGM 03MYN1 Federal Register / Vol. 70, No. 84 / Tuesday, May 3, 2005 / Notices (‘‘IOPV’’). The NYSE disseminates through the facilities of CTA an updated IOPV every 15 seconds during the regular trading hours of 9:30 a.m. to 4:15 p.m. ET. Amex represents that, if the IOPV is not calculated on a periodic basis or ceases to be widely disseminated, Amex would cease trading shares of these ETFs. The IOPV may not reflect the value of all securities included in an underlying index. In addition, the IOPV does not necessarily reflect the precise composition of the current portfolio of securities held by each fund at a particular point in time. The Exchange believes that dissemination of the IOPV provides additional information that is not otherwise available to the public and is useful to professionals and investors in connection with the trading of these ETFs or the creation or redemption of ETF shares. The currency exchange rate used in the calculation of the IOPV also may differ from that used by the funds’ custodian in the calculation of each fund’s NAV. Therefore, the IOPV for each fund on a per-share basis disseminated during the Exchange’s trading hours should not be viewed as a real-time update of the NAV of each fund, which is calculated only once a day. While the IOPV disseminated immediately prior to the opening of business of the Exchange (currently 9:30 a.m. e.t.) is expected to be close to the previous day’s NAV on a per-share basis, it is possible that the IOPV may diverge from the NAV during any trading day. In such case, the IOPV would not precisely reflect the value of the relevant fund’s portfolio. During the trading day, however, it is expected that the IOPV closely approximates the value of a fund’s portfolio of securities, except under unusual circumstances (e.g., in the case of extensive rebalancing of multiple securities in a fund at the same time by the fund’s advisor). The circumstances that might cause the IOPV to be different from a fund’s NAV would not be different from circumstances causing any index fund or trust to diverge from its underlying benchmark index. In connection with the trading of FEU and FEZ, Amex will inform its members in an Information Circular of the special characteristics and risks associated with trading of these ETFs, including a description of each fund and the associated shares, how fund shares are created and redeemed in creation units, foreign currency risks, foreign securities characteristics, applicable foreign country laws and restrictions, applicable Exchange rules, dissemination information, trading VerDate jul<14>2003 15:43 May 02, 2005 Jkt 205001 information, the applicability of suitability rules, and a discussion of any relief provided by the Commission or the staff from any rules under the Act. The Exchange will also require its members to deliver a prospectus or product description to investors purchasing shares of the ETF prior to or concurrently with the confirmation of a transaction in such shares. The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of shares of these ETFs. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. Amex Rule 190 generally precludes certain business relationships between an issuer and the specialist in the issuer’s securities. Exceptions in the rule permit specialists in ETF shares to enter into creation unit transactions to facilitate the maintenance of a fair and orderly market. Commentary .04 to Amex Rule 190 specifically applies to Index Fund Shares listed on the Exchange, and would apply to FEU and FEZ. Commentary .04 states that nothing in Amex Rule 190(a) should be construed to restrict a specialist registered in a security issued by an investment company from purchasing and redeeming the listed security, or securities that can be subdivided or converted into the listed security, from the issuer as appropriate to facilitate the maintenance of a fair and orderly market. 2. Statutory Basis Amex believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general and furthers the objectives of Section 6(b)(5) 7 in particular in that it is designed to prevent fraudulent and manipulative acts and practices; to promote just and equitable principles of trade; to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transaction in securities; and, in general to protect investors and the public interest. In addition, the Exchange believes that the proposal is consistent with Rule 12f–5 under the Act 8 because it deems the shares of FEU and FEZ to be equity securities, thus rendering such shares subject to the Exchange’s existing rules governing the trading of equity securities. PO 00000 6 15 U.S.C. 78s(b). U.S.C. 78s(b)(5). 8 17 CFR 240.12f–5. 7 15 Frm 00093 Fmt 4703 Sfmt 4703 22933 B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change would impose no 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. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Amex–2005–034 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. All submissions should refer to File Number SR–Amex–2005–034. 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 (https://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. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You E:\FR\FM\03MYN1.SGM 03MYN1 22934 Federal Register / Vol. 70, No. 84 / Tuesday, May 3, 2005 / Notices existing rules governing the trading of equity securities.15 The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act,16 which sets forth Congress’s finding that it is in the IV. Commission’s Findings and Order public interest and appropriate for the Granting Accelerated Approval of protection of investors and the Proposed Rule Change maintenance of fair and orderly markets to assure the availability to brokers, The Commission finds that the dealers, and investors of information proposed rule change is consistent with with respect to quotations for and the requirements of the Act and the transactions in securities. Quotations for rules and regulations thereunder and last sale information regarding FEU applicable to a national securities and FEZ are disseminated through the exchange.9 In particular, the Consolidated Quotation System. Commission finds that the proposed Furthermore, the NYSE disseminates rule change is consistent with Section through the facilities of CTA an updated 6(b)(5) of the Act,10 which requires that IOPV every 15 seconds from 9:30 a.m. an exchange have rules designed, among to 4:15 p.m. e.t. The Exchange has other things, to promote just and represented that, if the IOPV is not equitable principles of trade, to remove calculated on a periodic basis or ceases impediments to and perfect the to be widely disseminated, it would mechanism of a free and open market cease trading shares of these ETFs. The Commission notes that, if FEU or and a national market system, and in FEZ should be delisted by the NYSE, general to protect investors and the Amex would no longer have authority to public interest. The Commission trade the shares of the respective fund believes that this proposal will benefit pursuant to this order. investors by increasing competition In support of this proposal, the among markets that trade FEU and FEZ. Exchange has made the following In addition, the Commission finds representations: that the proposal is consistent with 1. Amex surveillance procedures are Section 12(f) of the Act,11 which permits adequate to properly monitor the an exchange to trade, pursuant to UTP, trading of FEU and FEZ shares on the a security that is listed and registered on Exchange. 12 The Commission another exchange. 2. Amex will distribute an notes that it previously approved the information circular to its members listing and trading of FEU and FEZ on prior to the commencement of trading of the NYSE.13 The Commission also finds FEU and FEZ shares on the Exchange that the proposal is consistent with Rule that explains the terms, characteristics, 12f–5 under the Act,14 which provides and risks of trading such shares. that an exchange shall not extend UTP 3. Amex will require a member with to a security unless the exchange has in a customer that purchases FEU or FEZ effect a rule or rules providing for shares on the Exchange to provide that transactions in the class or type of customer with a product prospectus and security to which the exchange extends will note this prospectus delivery UTP. Amex has represented that it requirement in the information circular. This approval order is conditioned on meets this requirement because it deems Amex’s adherence to these the shares of FEU and FEZ to be an equity securities, thus rendering trading representations. The Commission finds good cause for in such shares subject to the Exchange’s approving this proposal before the thirtieth day after the publication of 9 In approving this rule change, the Commission notice thereof in the Federal Register. notes that it has considered the proposed rule’s impact on efficiency, competition, and capital As noted previously, the Commission formation. See 15 U.S.C. 78c(f). previously found that the listing and 10 15 U.S.C. 78f(b)(5). trading of these ETFs on the NYSE is 11 15 U.S.C. 78l(f). consistent with the Act.17 The 12 Section 12(a) of the Act, 15 U.S.C. 78l(a), should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2005–034 and should be submitted on or before May 24, 2005. generally prohibits a broker-dealer from trading a security on a national securities exchange unless the security is registered on that exchange pursuant to Section 12 of the Act. Section 12(f) of the Act excludes from this restriction trading in any security to which an exchange ‘‘extends UTP.’’ When an exchange extends UTP to a security, it allows its members to trade the security as if it were listed and registered on the exchange even though it is not so listed and registered. 13 See supra note 3. 14 7 CFR 240.12f–5. VerDate jul<14>2003 15:43 May 02, 2005 Jkt 205001 15 The Commission notes that Commentary .04 to existing Amex Rule 190 will permit a specialist in FEU or FEZ to create or redeem creation units of these funds to facilitate the maintenance of a fair and orderly market. The Commission previously has found Commentary .04 to Amex Rule 190 to be consistent with the Act. See Securities Exchange Act Release No. 36947 (March 8, 1996), 61 FR 10106, 10612 (March 14, 1996). 16 15 U.S.C. 78k–1(a)(1)(C)(iii). 17 See supra note 3. PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 Commission presently is not aware of any issue that would cause it to revisit that earlier finding or preclude the trading of these funds on the Exchange pursuant to UTP. Therefore, accelerating approval of this proposal should benefit investors by creating, without undue delay, additional competition in the market for these ETFs. V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,18 that the proposed rule change (SR–Amex–2005– 034) is hereby approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.19 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–2126 Filed 5–2–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51612; File No. SR–BSE– 2004–24] Self-Regulatory Organizations; Order Approving Proposed Rule Change By the Boston Stock Exchange, Inc. Relating to Remote Floor Brokers April 26, 2005. Introduction On June 28, 2004, the Boston Stock Exchange, Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 permit Remote Floor Brokers to conduct their business from remote locations off of the Exchange floor. The proposed rule change was published in the FEDERAL REGISTER on November 30, 2004.3 No comments were received on the proposed rule change. This order approves the proposed rule change. 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,4 particularly 18 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 50715 (November 22, 2004), 69 FR 69650. 4 In approving this proposed rule change, the Commission has considered the proposed rule’s impact of efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 19 17 E:\FR\FM\03MYN1.SGM 03MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 84 (Tuesday, May 3, 2005)]
[Notices]
[Pages 22932-22934]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2126]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51616; File No. SR-Amex-2005-034]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change to Trade ETFs Based on the Dow Jones STOXX 50 and the Dow 
Jones EURO STOXX 50 Indexes Pursuant to Unlisted Trading Privileges

April 26, 2005.
    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 March 21, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the Exchange. 
The Commission is publishing this notice and order to solicit comments 
on the proposal from interested persons and to approve the proposal on 
an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to trade shares of two exchange-traded 
funds (``ETFs'')--the streetTRACKS[reg] Dow Jones STOXX 50 Fund (ticker 
symbol: FEU) and streetTRACKS[reg] Dow Jones EURO STOXX 50 Fund (ticker 
symbol: FEZ)--pursuant to unlisted trading privileges (``UTP''). The 
text of the proposed rule change is available from the Exchange's Web 
site (https://www.amex.com/), at the principal office of the Exchange, 
and at the Commission's Public Reference Room.

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 Exchange 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 these statements may be examined at the places specified in 
Item III below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects 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 trade FEU and FEZ, which are Index Fund 
Shares under Amex Rules 1000A et seq., pursuant to UTP. Each fund is a 
separate series of the streetTRACKS Index Shares Funds. STOXX Ltd., a 
joint venture between Deutsche B[ouml]rse AG, Dow Jones & Company 
(``Dow Jones''), and the SWX Group, services the Dow Jones STOXX 50 
Index and Dow Jones EURO STOXX 50 Index. Both indexes track the large-
cap markets of the European and Eurozone regions. Their components have 
a high degree of liquidity and represent the largest companies across 
all 18 market sectors defined by the Dow Jones Global Classification 
standard. The Commission previously approved the original listing and 
trading of FEU and FEZ on the New York Stock Exchange, Inc. 
(``NYSE'').\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 46686 (October 18, 
2002), 67 FR 65388 (October 24, 2002) (``NYSE Approval Order''). 
Shares of these ETFs commenced trading on the NYSE in October 2002.
---------------------------------------------------------------------------

    The Exchange deems the shares of these ETFs to be equity 
securities, thus rendering trading in these shares subject to the 
Exchange's existing rules governing the trading of equity 
securities.\4\ The trading hours for these ETFs on the Exchange would 
be 9:30 a.m. to 4:15 p.m. Eastern time (``ET'').\5\
---------------------------------------------------------------------------

    \4\ This includes Amex Rule 154, Commentary .04(c), which 
provides that stop and stop limit orders to buy or sell a security 
(other than an option, which is covered by Amex Rule 950(f) and 
Commentary thereto) the price of which is derivatively priced based 
upon another security or index of securities, may with the prior 
approval of a Floor Official, be elected by a quotation, as set 
forth in Commentary .04(c)(i-v).
    \5\ In its initial proposal to list and trade FEU and FEZ, the 
NYSE stated incorrectly that the close of trading in these ETFs 
would be 4:00 p.m. See NYSE Approval Order, 67 FR at 65391. The NYSE 
later corrected the misstatement and specified that the ETFs may be 
traded until 4:15 p.m. See Securities Exchange Act Release No. 49776 
(May 26, 2004), 69 FR 31439 (June 3, 2004).
---------------------------------------------------------------------------

    Quotations for and last sale information regarding these ETFs are 
disseminated through the Consolidated Tape Association (``CTA''). The 
NAV of each ETF is calculated by the funds' custodian, State Street 
Bank and Trust Company, and determined each business day, normally at 
the close of regular trading on the NYSE. To provide updated 
information relating to these ETFs for use by investors, professionals, 
and persons wishing to create or redeem shares in creation unit 
aggregations (``creation units''), Bloomberg calculates an indicative 
optimized portfolio value

[[Page 22933]]

(``IOPV''). The NYSE disseminates through the facilities of CTA an 
updated IOPV every 15 seconds during the regular trading hours of 9:30 
a.m. to 4:15 p.m. ET. Amex represents that, if the IOPV is not 
calculated on a periodic basis or ceases to be widely disseminated, 
Amex would cease trading shares of these ETFs.
    The IOPV may not reflect the value of all securities included in an 
underlying index. In addition, the IOPV does not necessarily reflect 
the precise composition of the current portfolio of securities held by 
each fund at a particular point in time. The Exchange believes that 
dissemination of the IOPV provides additional information that is not 
otherwise available to the public and is useful to professionals and 
investors in connection with the trading of these ETFs or the creation 
or redemption of ETF shares.
    The currency exchange rate used in the calculation of the IOPV also 
may differ from that used by the funds' custodian in the calculation of 
each fund's NAV. Therefore, the IOPV for each fund on a per-share basis 
disseminated during the Exchange's trading hours should not be viewed 
as a real-time update of the NAV of each fund, which is calculated only 
once a day. While the IOPV disseminated immediately prior to the 
opening of business of the Exchange (currently 9:30 a.m. e.t.) is 
expected to be close to the previous day's NAV on a per-share basis, it 
is possible that the IOPV may diverge from the NAV during any trading 
day. In such case, the IOPV would not precisely reflect the value of 
the relevant fund's portfolio.
    During the trading day, however, it is expected that the IOPV 
closely approximates the value of a fund's portfolio of securities, 
except under unusual circumstances (e.g., in the case of extensive 
rebalancing of multiple securities in a fund at the same time by the 
fund's advisor). The circumstances that might cause the IOPV to be 
different from a fund's NAV would not be different from circumstances 
causing any index fund or trust to diverge from its underlying 
benchmark index.
    In connection with the trading of FEU and FEZ, Amex will inform its 
members in an Information Circular of the special characteristics and 
risks associated with trading of these ETFs, including a description of 
each fund and the associated shares, how fund shares are created and 
redeemed in creation units, foreign currency risks, foreign securities 
characteristics, applicable foreign country laws and restrictions, 
applicable Exchange rules, dissemination information, trading 
information, the applicability of suitability rules, and a discussion 
of any relief provided by the Commission or the staff from any rules 
under the Act. The Exchange will also require its members to deliver a 
prospectus or product description to investors purchasing shares of the 
ETF prior to or concurrently with the confirmation of a transaction in 
such shares.
    The Exchange represents that its surveillance procedures are 
adequate to properly monitor the trading of shares of these ETFs. In 
addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
    Amex Rule 190 generally precludes certain business relationships 
between an issuer and the specialist in the issuer's securities. 
Exceptions in the rule permit specialists in ETF shares to enter into 
creation unit transactions to facilitate the maintenance of a fair and 
orderly market. Commentary .04 to Amex Rule 190 specifically applies to 
Index Fund Shares listed on the Exchange, and would apply to FEU and 
FEZ. Commentary .04 states that nothing in Amex Rule 190(a) should be 
construed to restrict a specialist registered in a security issued by 
an investment company from purchasing and redeeming the listed 
security, or securities that can be subdivided or converted into the 
listed security, from the issuer as appropriate to facilitate the 
maintenance of a fair and orderly market.
2. Statutory Basis
    Amex believes that the proposed rule change is consistent with 
Section 6(b) of the Act \6\ in general and furthers the objectives of 
Section 6(b)(5) \7\ in particular in that it is designed to prevent 
fraudulent and manipulative acts and practices; to promote just and 
equitable principles of trade; to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transaction in 
securities; and, in general to protect investors and the public 
interest. In addition, the Exchange believes that the proposal is 
consistent with Rule 12f-5 under the Act \8\ because it deems the 
shares of FEU and FEZ to be equity securities, thus rendering such 
shares subject to the Exchange's existing rules governing the trading 
of equity securities.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b).
    \7\ 15 U.S.C. 78s(b)(5).
    \8\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change would impose no 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. 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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Amex-2005-034 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-Amex-2005-034. 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 (https://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. Copies of such 
filing also will be available for inspection and copying at the 
principal offices of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You

[[Page 22934]]

should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-Amex-2005-034 
and should be submitted on or before May 24, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\9\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\10\ which requires that an 
exchange have rules designed, among other things, 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 
believes that this proposal will benefit investors by increasing 
competition among markets that trade FEU and FEZ.
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    \9\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    In addition, the Commission finds that the proposal is consistent 
with Section 12(f) of the Act,\11\ which permits an exchange to trade, 
pursuant to UTP, a security that is listed and registered on another 
exchange.\12\ The Commission notes that it previously approved the 
listing and trading of FEU and FEZ on the NYSE.\13\ The Commission also 
finds that the proposal is consistent with Rule 12f-5 under the 
Act,\14\ which provides that an exchange shall not extend UTP to a 
security unless the exchange has in effect a rule or rules providing 
for transactions in the class or type of security to which the exchange 
extends UTP. Amex has represented that it meets this requirement 
because it deems the shares of FEU and FEZ to be an equity securities, 
thus rendering trading in such shares subject to the Exchange's 
existing rules governing the trading of equity securities.\15\
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    \11\ 15 U.S.C. 78l(f).
    \12\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally 
prohibits a broker-dealer from trading a security on a national 
securities exchange unless the security is registered on that 
exchange pursuant to Section 12 of the Act. Section 12(f) of the Act 
excludes from this restriction trading in any security to which an 
exchange ``extends UTP.'' When an exchange extends UTP to a 
security, it allows its members to trade the security as if it were 
listed and registered on the exchange even though it is not so 
listed and registered.
    \13\ See supra note 3.
    \14\ 7 CFR 240.12f-5.
    \15\ The Commission notes that Commentary .04 to existing Amex 
Rule 190 will permit a specialist in FEU or FEZ to create or redeem 
creation units of these funds to facilitate the maintenance of a 
fair and orderly market. The Commission previously has found 
Commentary .04 to Amex Rule 190 to be consistent with the Act. See 
Securities Exchange Act Release No. 36947 (March 8, 1996), 61 FR 
10106, 10612 (March 14, 1996).
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    The Commission further believes that the proposal is consistent 
with Section 11A(a)(1)(C)(iii) of the Act,\16\ which sets forth 
Congress's 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. Quotations for and last sale information regarding FEU and 
FEZ are disseminated through the Consolidated Quotation System. 
Furthermore, the NYSE disseminates through the facilities of CTA an 
updated IOPV every 15 seconds from 9:30 a.m. to 4:15 p.m. e.t. The 
Exchange has represented that, if the IOPV is not calculated on a 
periodic basis or ceases to be widely disseminated, it would cease 
trading shares of these ETFs.
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    \16\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    The Commission notes that, if FEU or FEZ should be delisted by the 
NYSE, Amex would no longer have authority to trade the shares of the 
respective fund pursuant to this order.
    In support of this proposal, the Exchange has made the following 
representations:
    1. Amex surveillance procedures are adequate to properly monitor 
the trading of FEU and FEZ shares on the Exchange.
    2. Amex will distribute an information circular to its members 
prior to the commencement of trading of FEU and FEZ shares on the 
Exchange that explains the terms, characteristics, and risks of trading 
such shares.
    3. Amex will require a member with a customer that purchases FEU or 
FEZ shares on the Exchange to provide that customer with a product 
prospectus and will note this prospectus delivery requirement in the 
information circular.
    This approval order is conditioned on Amex's adherence to these 
representations.
    The Commission finds good cause for approving this proposal before 
the thirtieth day after the publication of notice thereof in the 
Federal Register. As noted previously, the Commission previously found 
that the listing and trading of these ETFs on the NYSE is consistent 
with the Act.\17\ The Commission presently is not aware of any issue 
that would cause it to revisit that earlier finding or preclude the 
trading of these funds on the Exchange pursuant to UTP. Therefore, 
accelerating approval of this proposal should benefit investors by 
creating, without undue delay, additional competition in the market for 
these ETFs.
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    \17\ See supra note 3.
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\18\ that the proposed rule change (SR-Amex-2005-034) is hereby 
approved on an accelerated basis.
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    \18\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2126 Filed 5-2-05; 8:45 am]
BILLING CODE 8010-01-P

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