Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to the Trading of WisdomTree Exchange Traded Funds Pursuant to Unlisted Trading Privileges, 35981-35985 [E6-9831]

Download as PDF Federal Register / Vol. 71, No. 120 / Thursday, June 22, 2006 / Notices V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,52 that the proposed rule change (SR–NYSE–2006– 41), as amended, is hereby approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.53 Nancy M. Morris, Secretary. [FR Doc. 06–5626 Filed 6–21–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53999; File No. SR– NYSEArca–2006–30] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to the Trading of WisdomTree Exchange Traded Funds Pursuant to Unlisted Trading Privileges June 15, 2006. 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 June 15, 2006, NYSE Arca, Inc. (the ‘‘Exchange’’), through its wholly owned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or the ‘‘Corporation’’), filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposal on an accelerated basis. wwhite on PROD1PC61 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Pursuant to NYSE Arca Equities Rule 5.2(j)(3), the Exchange proposes to trade, pursuant to unlisted trading privileges (‘‘UTP’’), shares (‘‘Shares’’) of the following thirty-four (34) exchange traded funds (‘‘ETFs’’), which are Investment Company Units under the Rule: (1) WisdomTree Europe Total Dividend Fund; (2) WisdomTree Europe High-Yielding Equity Fund; (3) WisdomTree Japan Total Dividend Fund; (4) WisdomTree Japan HighU.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 115 U.S.C. 78s(b)(1). 217 CFR 240.19b–4. 53 17 19:08 Jun 21, 2006 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. The text of these statements may be examined at the places specified in Item III below, and is set forth in Sections A, B, and C below. 3 ‘‘WisdomTree,’’ ‘‘High-Yielding Equity,’’ ‘‘Dividend Top 100,’’ ‘‘WisdomTree DIEFA,’’ ‘‘International Dividend Top 100,’’ and ‘‘Dividend Stream’’ are servicemarks of WisdomTree Investments, Inc. 52 15 VerDate Aug<31>2005 Yielding Equity Fund; (5) WisdomTree DIEFA Fund; (6) WisdomTree DIEFA High Yielding Equity Fund; (7) WisdomTree Pacific ex-Japan Total Dividend Fund; (8) WisdomTree Pacific ex-Japan High-Yielding Equity Fund; (9) WisdomTree International LargeCap Dividend Fund; (10) WisdomTree International MidCap Dividend Fund; (11) WisdomTree International SmallCap Dividend Fund; (12) WisdomTree International Dividend Top 100 Fund; (13) WisdomTree Europe Dividend Top 100 Fund; (14) WisdomTree Europe SmallCap Dividend Fund; (15) WisdomTree Japan SmallCap Dividend Fund; (16) WisdomTree International Consumer Non-Cyclical Sector Fund; (17) WisdomTree International Basic Materials Sector Fund; (18) WisdomTree International Communications Sector Fund; (19) WisdomTree International Consumer Cyclical Sector Fund; (20) WisdomTree International Energy Sector Fund; (21) WisdomTree International Financial Sector Fund; (22) WisdomTree International Healthcare Sector Fund; (23) WisdomTree International Industrial Sector Fund; (24) WisdomTree International Technology Sector Fund; (25) WisdomTree International Utilities Sector Fund; (26) WisdomTree Emerging Markets Total Dividend Fund; (27) WisdomTree Emerging Markets High-Yielding Equity Fund; (28) WisdomTree Emerging Markets Dividend Top 100 Fund; (29) WisdomTree Latin America Dividend Fund; (30) WisdomTree Asia Emerging Markets Total Dividend Fund; (31) WisdomTree Asia Emerging Markets High-Yielding Equity Fund; (32) WisdomTree China Dividend Fund; (33) WisdomTree Hong Kong Dividend Fund; and (34) WisdomTree Singapore Dividend Fund (collectively, the ‘‘Funds’’).3 Jkt 208001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 35981 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Pursuant to NYSE Arca Equities Rule 5.2(j)(3), the Exchange proposes to trade, pursuant to UTP, Shares of the Funds. The Funds are separate investment portfolios of the WisdomTree Trust (the ‘‘Trust’’).4 A rule proposal for the original listing and trading of the Shares was filed with the Commission by the New York Stock Exchange, LLC (‘‘NYSE’’) 5 and was approved on June 15, 2006.6 The Shares are Investment Company Units under NYSE Arca Equities Rule 5.2(j)(3). The Funds will hold certain securities (‘‘Component Securities’’) selected to correspond generally to the performance of the following indexes, respectively (the ‘‘Indexes,’’ ‘‘Underlying Indexes’’ or ‘‘International Indexes’’): (1) WisdomTree Europe Dividend Index; (2) WisdomTree Europe High-Yielding Equity Index; (3) WisdomTree Japan Dividend Index; (4) WisdomTree Japan High-Yielding Equity Index; (5) WisdomTree Dividend Index of Europe, Far East Asia and Australasia (referred to as the ‘‘WisdomTree DIEFA Index’’); (6) WisdomTree DIEFA High-Yielding Equity Index; (7) WisdomTree Dividend Index of the Pacific Region (referred to as the ‘‘WisdomTree Pacific ex-Japan Index’’); (8) WisdomTree Pacific exJapan High-Yielding Equity Index; (9) WisdomTree International LargeCap 4 The Trust will be registered under the Investment Company Act of 1940 (15 U.S.C. 80a), (the ‘‘Investment Company Act’’). The Trust filed with the Commission a Registration Statement for certain Funds (specifically, numbers 1 to 15 of the Funds specified above) on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a), and under the Investment Company Act relating to the Funds (File Nos. 333–132380 and 811–21864) on March 13, 2006, and filed an amendment thereto on June 5, 2006, (‘‘Registration Statement’’). In the June 5, 2006, amendment to the Registration Statement, the Trust changed the names of the WisdomTree DIPR Fund and WisdomTree DIPR High-Yielding Equity Fund to the WisdomTree Pacific ex-Japan Total Dividend Fund and WisdomTree Pacific ex-Japan High-Yielding Equity Fund, respectively. In contrast to the Funds, which each invest in dividend-paying non-U.S. equity securities, the Trust also consists of six funds that invest in indexes comprised of dividend-paying U.S. equity securities, as described in the Registration Statement, that are not included in this rule proposal. On April 19, 2006, the Trust filed with the Commission an Application for Orders under Sections 6(c) and 17(b) of the Investment Company Act for the purpose of exempting all of the Funds from various provisions of the Investment Company Act and the rules thereunder (‘‘Application’’). 5See File No. SR–NYSE–2006–41. (‘‘NYSE Proposal’’). 6See Securities Exchange Act Release No. 53998 (File No. SR–NYSE–2006–41) (‘‘NYSE Order’’). E:\FR\FM\22JNN1.SGM 22JNN1 wwhite on PROD1PC61 with NOTICES 35982 Federal Register / Vol. 71, No. 120 / Thursday, June 22, 2006 / Notices Dividend Index; (10) WisdomTree International MidCap Dividend Index; (11) WisdomTree International SmallCap Dividend Index; (12) WisdomTree International Dividend Top 100 Index; (13) WisdomTree Europe Dividend Top 100 Index; (14) WisdomTree Europe SmallCap Dividend Index; (15) WisdomTree Japan SmallCap Dividend Index; (16) WisdomTree International Consumer Non-Cyclical Sector Index; (17) WisdomTree International Basic Materials Sector Index; (18) WisdomTree International Communications Sector Index; (19) WisdomTree International Consumer Cyclical Sector Index; (20) WisdomTree International Energy Sector Index; (21) WisdomTree International Financial Sector Index; (22) WisdomTree International Healthcare Sector Index; (23) WisdomTree International Industrial Sector Index; (24) WisdomTree International Technology Sector Index; (25) WisdomTree International Utilities Sector Index; (26) WisdomTree Emerging Markets Dividend Index (‘‘EMDI’’); (27) WisdomTree Emerging Markets HighYielding Equity Index (‘‘EMDI HYE’’); (28) WisdomTree Emerging Markets Dividend Top 100 Index (‘‘EMDI Top 100’’); (29) WisdomTree Latin America Dividend Index (‘‘LDI’’); (30) WisdomTree Asia Emerging Markets Dividend Index (‘‘AEMDI’’); (31) WisdomTree Asia Emerging Markets High-Yielding Equity Index (‘‘AEMDI HYE’’); (32) WisdomTree China Dividend Index; (33) WisdomTree Hong Kong Dividend Index and (34) WisdomTree Singapore Dividend Index. The investment objective of each Fund will be to provide investment returns that closely correspond to the price, dividend, and yield performance of its Underlying Index. In seeking to achieve the respective investment objective of each Fund, BNY Investment Advisors (the ‘‘Subadvisor’’) may utilize a ‘‘replication’’ strategy, or a ‘‘representative sampling’’ strategy with respect to its Underlying Index. The Trust expects that a Fund using a replication strategy will invest in substantially all of the component securities in its portfolio in the same approximate proportions as in its Index. A Fund utilizing a representative sampling strategy generally will invest in a significant number of the component securities of its Underlying Index, but it may not invest in all of the component securities of its Underlying Index. Each Fund’s investment objectives, policies and investment strategies are fully disclosed in its VerDate Aug<31>2005 19:08 Jun 21, 2006 Jkt 208001 relevant prospectus and statement of additional information (‘‘SAI’’). The Shares A description of the operation of the Funds, the Indexes, and the Shares is set forth in the NYSE Proposal. To summarize, the Trust will issue, with respect to each Fund on a continuous offering basis, only specified large aggregations of Shares (each such aggregation a ‘‘Creation Unit’’) currently expected to range from 25,000 to 200,000 Shares, as will be clearly stated in such Fund’s Prospectus. The Funds will offer and sell Creation Units of Shares through ALPS Distributors, Inc. (the ‘‘Distributor’’) on a continuous basis, by or through participants that have entered into participant agreements (each, an ‘‘Authorized Participant’’) 7 with the Distributor. The Funds will offer and sell Creation Units of Shares at the NAV per share next determined after receipt of an order in proper form. The NAV of the Shares will be determined as of the close of regular trading on the NYSE (the ‘‘NAV Calculation Time,’’ currently expected to be 4 p.m. Eastern Time (‘‘ET’’)) on each business day.8 Purchases and redemptions of Creation Units will be made generally by means of an in-kind tender of specified securities (‘‘Deposit Securities’’), with any cash portion of the purchase price (‘‘Cash Requirement’’) and redemption proceeds to be kept to a minimum, as described in the Registration Statement. The Deposit Securities and the Cash Requirement collectively are referred to as the ‘‘Creation Deposit.’’ The Cash Requirement is a cash payment designed to ensure that the NAV of a Creation Deposit is identical to the NAV of the Creation Unit it is used to purchase. The Cash Requirement will be the amount equal to the difference between the NAV of a Creation Unit and the market value of the Deposit Securities. Authorized Participants that wish to purchase a Creation Unit must transfer the Creation Deposit to the accounts maintained at the applicable sub-custodians. Creation Units are then separable upon issuance into the Shares that will be traded on the NYSE Arca Marketplace on a UTP basis.9 7 Authorized Participants are Depository Trust Company (‘‘DTC’’) participants that must be registered as broker-dealers under the Exchange Act (unless offering or selling shares outside the U.S. and not otherwise required to be registered). 8 A ‘‘business day’’ with respect to each Fund is any day on which the NYSE is open for business. 9 Shares are separate and distinct from the underlying securities comprising the portfolio of a Fund. The Exchange expects that the number of PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 The Shares will not be individually redeemable but will only be redeemable in Creation Units. To redeem, an Authorized Participant must accumulate enough Shares to constitute a Creation Unit. Redemption requests must be placed by or through an Authorized Participant. Redemption requests in good order will receive the NAV next determined after the request is received. Procedures for redemptions are analogous (in reverse) to those for purchase of Creation Units, except that redemption requests are made directly to the Fund and are not made through the Distributor. More information regarding the creation and redemption process is provided in the Funds’ Registration Statement, SAI, and the NYSE Proposal. Availability of Information Regarding Shares and the Underlying Indexes In addition to the list of names and amount of each security constituting the current Deposit Securities, on each business day, the Cash Requirement effective as of the previous business day, per outstanding share of each Fund, will be made available. Every 15 seconds during the NYSE’s regular trading hours (normally 9:30 a.m. to 4:15 p.m., ET), there will be disseminated though a major market vendor or on the Consolidated Tape an amount per share representing the sum of the estimated Cash Requirement effective through and including the previous business day, plus the current value of the Deposit Securities, on a perShare basis. This amount represents the estimated NAV of a Share (sometimes referred to as the Indicative Optimized Portfolio Value (‘‘IOPV’’), and reflects changes in the currency rates between the U.S. dollar and the applicable home foreign currency. The IOPV for the Funds will be calculated by the Calculation Agent (Bloomberg L.P.). While the IOPV is expected to be generally very close to the most recently calculated Fund NAV on a per-Fundshare basis, it is possible that the value of the portfolio of securities held by each Fund may diverge from the Deposit Securities values during the trading day. In such case, the IOPV will not precisely reflect the value of each Fund’s portfolio. However, during the trading day, the IOPV can be expected to closely approximate the value per Fund share of the portfolio of securities for each Fund, except under unusual circumstances (e.g., in the case of extensive rebalancing of multiple securities in a outstanding Shares will increase and decrease as a result of in-kind deposits and withdrawals of the underlying securities. E:\FR\FM\22JNN1.SGM 22JNN1 Federal Register / Vol. 71, No. 120 / Thursday, June 22, 2006 / Notices wwhite on PROD1PC61 with NOTICES Fund at the same time by WisdomTree Asset Management, Inc. (the ‘‘Advisor’’)). According to the NYSE Proposal, where there is an overlap in trading hours between the foreign and U.S. markets with respect to the Funds, the Calculation Agent will update the applicable IOPV at least every 15 seconds from 9:30 a.m. to 4:15 p.m. ET to reflect price changes in the applicable foreign market or markets and convert such prices into U.S. dollars, based on the applicable currency exchange rate. At times when the foreign market or markets are closed during the hours of 9:30 a.m. to 4:15 p.m. ET, the IOPV will be updated at least every 15 seconds during these hours to reflect changes in currency exchange rates after the foreign markets close. Where there is no overlap in trading hours between the foreign and U.S. markets, then the IOPV will be updated at least every 15 seconds from 9:30 a.m. to 4:15 p.m. ET to reflect changes in currency exchange rates after the foreign markets close. In addition, the following information will be disseminated: (i) Continuously from 9:30 a.m. to 4:15 p.m. ET, last sale prices of Shares over the Consolidated Tape, and (ii) at least every 15 seconds throughout such hours, the IOPV. Comparing these two figures allows an investor to determine whether, and to what extent, Shares are selling at a premium or a discount to the NAV. The intra-day value of each Index, based on the market price of its component securities, will be updated and disseminated every 15 seconds over the Consolidated Tape or through organizations authorized by the Calculation Agent each business day.10 Information on the Indexes will be available on the Funds’ Web site (http://www.wisdomtree.com), as will a description of the rules-based methodology. Each business day, the Web site will publish free of charge (or provide a link to another Web site that will publish free of charge) the securities in each Fund’s portfolio and 10 All Index values will be disseminated only from 9:30 a.m. to 4:15 p.m. ET. As with international indexes underlying existing ETFs, the value of each Index will be updated and disseminated every 15 seconds during these hours each business day to reflect (i) changing market prices if there is any overlap between the normal market hours in the U.S. and the market(s) covered by such Index (otherwise closing or last-sale prices in the applicable non-U.S. market are used), and (ii) changing currency exchange rates. Index values will not be disseminated from 4:15 p.m. to 8 p.m. ET because the all relevant international markets are closed during this time. Telephone conversation between David Strandberg, Director, Issuer Services, NYSE Arca, Inc. and Ronesha Butler, Special Counsel, Division of Market Regulation (‘‘Divison’’), Commission, on June 15, 2006. VerDate Aug<31>2005 19:08 Jun 21, 2006 Jkt 208001 their respective weightings, each Fund’s per share NAV and last-traded price and midpoint of the bid/ask spread as of the NAV calculation time, all as of the prior business day. The components and weightings of the Indexes, as well as each Fund’s portfolio, will also be available through unaffiliated thirdparty major market data vendors, such as Bloomberg L.P. All the securities included in the International Indexes will be listed on major stock exchanges in their respective countries. A Web address exists for every international exchange where the international component securities trade and ‘‘quotations’’ (which may be disseminated on a delayed basis or may not be updated during NYSE trading hours) can be accessed for each of such securities through such Web address. In addition, U.S. retail investors with access to the Internet can access ‘‘quotations’’ with respect to these foreign securities through Yahoo Finance! (http:// finance.yahoo.com), as well as other financial Web sites. Investors with access to a Bloomberg machine can directly access ‘‘quotations’’ and fundamental data on these foreign securities. In addition, according to the NYSE Proposal, issuers of all component securities of any International Index file disclosure documents, such as prospectuses, with their respective regulators. The Funds’ Web site will be publicly accessible and free of charge to all investors and will provide a link to the Web address for every exchange on which the securities of each Index are listed. The Exchange’s Web site will include a hyperlink to the Funds’ Web site. According to the NYSE Proposal, the Calculation Agent will disseminate Index information through the Bloomberg Professional Service, which is available to subscribers. Index values on a total return basis will be disseminated on an end-of-day basis through the Bloomberg Professional Service. Price index values will be calculated by the Calculation Agent and disseminated every 15 seconds from 9:30 a.m. to 4:15 p.m. ET to the Securities Industry Automation Corporation (‘‘SIAC’’) so that such Index values can print to the Consolidated Tape. A ‘‘total return Index value’’ reflects price appreciation (or depreciation) of the underlying securities, plus reinvestment of dividends. A ‘‘price Index value’’ reflects only price appreciation (or depreciation) of the underlying securities. PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 35983 According to the NYSE Proposal, the Calculation Agent will disseminate over the Consolidated Tape values for each Underlying Index once each trading day, based on closing prices of the securities in each such Index. Each Fund will make available on a daily basis through National Securities Clearing Corporation (the ‘‘NSCC’’) the names and required number of Shares of each of the Deposit Securities in a Creation Unit, as well as information regarding the Cash Requirement. The NAV for each Fund will be calculated and disseminated daily. The Funds’ Web site, accessible to all investors at no charge, will publish the current version of the Prospectus and SAI, the Underlying Index for each Fund, as well as additional quantitative information that is updated on a daily basis, including daily trading volume, closing price and closing NAV for each Fund. The NYSE will disseminate a variety of data with respect to each Fund on a daily basis. Information with respect to recent NAV, net accumulated dividend, final dividend amount to be paid, Shares outstanding, estimated cash amount, and total cash amount per Creation Unit will be made available each day, prior to 9:30 a.m. ET. The closing prices of the Funds’ Deposit Securities are readily available from, as applicable, the relevant markets, automated quotation systems, published or other public sources or online information services, such as Bloomberg or Reuters. UTP Trading Criteria The Exchange represents that it will cease trading the Shares of a Fund during the listing market’s trading hours if: (a) The listing market stops trading the Shares because of a regulatory halt similar to a halt based on NYSE Arca Equities Rule 7.12 and/or a halt because the IOPV and/or the Index value of a Fund is no longer calculated or disseminated; or (b) the listing market delists the Shares; or (c) the NAV per share is not disseminated to all market participants.11 Additionally, the Exchange may cease trading the Shares of a Fund if such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. Trading Rules The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange’s 11 Telephone conversation between Glenn H. Gsell, Director, Regulation, NYSE Arca, Inc. and Ronesha Butler, Special Counsel, and Angela Muehr, Attorney, Division, Commission, on June 15, 2006. E:\FR\FM\22JNN1.SGM 22JNN1 35984 Federal Register / Vol. 71, No. 120 / Thursday, June 22, 2006 / Notices existing rules governing the trading of equity securities. Shares will trade on the NYSE Arca Marketplace from 9:30 a.m. ET until 8 p.m. ET. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. The minimum trading increment for Shares on the Exchange will be $0.01. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of a Fund. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities comprising an Underlying Index of a Fund, or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in the Shares will be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange’s ‘‘circuit breaker’’ rule 12 or by the halt or suspension of trading of the underlying securities. See ‘‘UTP Trading Criteria’’ above for specific instances when the Exchange will cease trading the Shares. Shares will be deemed ‘‘Eligible Listed Securities,’’ as defined in NYSE Arca Equities Rule 7.55, for purposes of the Intermarket Trading System (‘‘ITS’’) Plan and therefore will be subject to the trade through provisions of NYSE Arca Equities Rule 7.56, which require that ETP Holders avoid initiating tradethroughs for ITS securities. Unless exemptive or no-action relief is available, the Shares will be subject to the short sale rule, Rule 10a–1 and Regulation SHO under the Act. If exemptive or no-action relief is provided, the Exchange will issue a notice detailing the terms of the exemption or relief. wwhite on PROD1PC61 with NOTICES Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products to monitor trading in the Shares. The Exchange represents that these procedures are adequate to monitor Exchange trading of the Shares in all trading sessions. 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 12 See NYSE Arca Equities Rule 7.12. VerDate Aug<31>2005 19:08 Jun 21, 2006 Jkt 208001 all relevant parties for all relevant trading violations. The Exchange is able to obtain information regarding trading in the Shares and the securities comprising the Underlying Indexes through ETP Holders in connection with such ETP Holders’ proprietary or customer trades. In addition, the Exchange may obtain trading information via the Intermarket Surveillance Group (‘‘ISG’’) from other exchanges who are members or affiliates of the ISG. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. 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 Creation Unit Aggregations (and that Shares are not individually redeemable); (2) Funds’ calculation of NAV; (3) 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; 13 (4) how information regarding the IOPV is disseminated; (5) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information. The Information Bulletin will advise ETP Holders, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Funds.14 The Information Bulletin will also discuss 13 The Exchange has proposed to amend NYSE Arca Equities Rule 9.2(a) (‘‘Diligence as to Accounts’’) to provide that ETP Holders, before recommending a transaction, must have reasonable grounds to believe that the recommendation is suitable for the customer based on any facts disclosed by the customer as to his other security holdings and as to his financial situation and needs. Further, the proposed rule amendment provides that ETP Holders should make reasonable efforts to obtain the customer’s financial status, tax status, investment objectives and any other information that they believe would be useful to make a recommendation. See Amendment No. 2 to SR– PCX–2005–115 (May 5, 2006). 14 The Application included a request that the exemptive order also grant relief from Section 24(d) of the 1940 Act, which would permit dealers to sell Shares in the secondary market unaccompanied by a statutory prospectus when prospectus delivery is not required by the Securities Act of 1933. Any Product Description used in reliance on Section 24(d) exemptive relief will comply with all representations and conditions set forth in the order. PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 any relief, if granted by the Commission or the staff, from any rules under the Securities Exchange Act of 1934.15 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 disclose that the NAV for the Shares will be calculated shortly after 4 p.m. ET each trading day. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 16 in general and furthers the objectives of Section 6(b)(5),17 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transaction in securities, to remove impediments and perfect the mechanisms of a free and open market, 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 18 because it deems the Shares to be equity securities, thus rendering the Shares subject to the Exchange’s existing rules governing the trading of equity securities. 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 The Exchange has neither solicited nor received written comments on 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File 15 15 U.S.C. 78a. U.S.C. 78s(b). 17 15 U.S.C. 78s(b)(5). 18 17 CFR 240.12f–5. 16 15 E:\FR\FM\22JNN1.SGM 22JNN1 Federal Register / Vol. 71, No. 120 / Thursday, June 22, 2006 / Notices and a national market system, and in general to protect investors and the public interest. Paper Comments In addition, the Commission finds • Send paper comments in triplicate that the proposal is consistent with to Nancy M. Morris, Secretary, Section 12(f) of the Act,21 which permits Securities and Exchange Commission, an exchange to trade, pursuant to UTP, Station Place, 100 F Street, NE., a security that is listed and registered on Washington, DC 20549–1090. another exchange.22 The Commission notes that it previously approved the All submissions should refer to File listing and trading of the Shares on the Number SR–NYSEArca–2006–30. This NYSE.23 The Commission also finds that file number should be included on the subject line if e-mail is used. To help the the proposal is consistent with Rule 12f–5 under the Act,24 which provides Commission process and review your that an exchange shall not extend UTP comments more efficiently, please use only one method. The Commission will to a security unless the exchange has in post all comments on the Commission’s effect a rule or rules providing for transactions in the class or type of Internet Web site (http://www.sec.gov/ security to which the exchange extends rules/sro.shtml). Copies of the UTP. NYSEArca rules deem the Shares submission, all subsequent to be equity securities, thus trading in amendments, all written statements the Shares will be subject to the with respect to the proposed rule Exchange’s existing rules governing the change that are filed with the trading of equity securities. Commission, and all written The Commission further believes that communications relating to the the proposal is consistent with Section proposed rule change between the Commission and any person, other than 11A(a)(1)(C)(iii) of the Act,25 which sets forth Congress’s finding that it is in the those that may be withheld from the public interest and appropriate for the public in accordance with the protection of investors and the provisions of 5 U.S.C. 552, will be maintenance of fair and orderly markets available for inspection and copying in to assure the availability to brokers, the Commission’s Public Reference Room. Copies of such filing also will be dealers, and investors of information with respect to quotations for and available for inspection and copying at the principal office of the Exchange. All transactions in securities. In support of the portion of the comments received will be posted proposed rule change regarding UTP of without change; the Commission does the Shares, the Exchange has made the not edit personal identifying following representations: information from submissions. You 1. The Exchange has appropriate rules should submit only information that you wish to make available publicly. All to facilitate transactions in this type of security in all trading sessions. submissions should refer to File 2. The Exchange’s surveillance Number SR–NYSEArca–2006–30 and procedures are adequate to properly should be submitted on or before July monitor the trading of the Shares on the 13, 2006. Exchange. IV. Commission’s Findings and Order 3. The Exchange will distribute an Granting Accelerated Approval of Information Bulletin to its members Proposed Rule Change prior to the commencement of trading of the Shares on the Exchange that The Commission finds that the proposed rule change is consistent with explains the special characteristics and risks of trading the Shares. the requirements of the Act and the 4. The Exchange will require a rules and regulations thereunder member with a customer who purchases applicable to a national securities newly issued Shares on the Exchange to exchange.19 In particular, the Commission finds that the proposed 21 15 U.S.C. 78l(f). rule change is consistent with Section 22 Section 12(a) of the Act, 15 U.S.C. 78l(a), 20 which requires that 6(b)(5) of the Act, generally prohibits a broker-dealer from trading a an exchange have rules designed, among security on a national securities exchange unless the security is registered on that exchange pursuant other things, to promote just and to Section 12 of the Act. Section 12(f) of the Act equitable principles of trade, to remove excludes from this restriction trading in any impediments to and perfect the security to which an exchange ‘‘extends UTP.’’ mechanism of a free and open market When an exchange extends UTP to a security, it wwhite on PROD1PC61 with NOTICES Number SR–NYSEArca–2006–30 on the subject line. 19 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). 20 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 19:08 Jun 21, 2006 Jkt 208001 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. 23 See NYSE Order, supra note 6. 24 17 CFR 240.12f–5. 25 15 U.S.C. 78k–1(a)(1)(C)(iii). PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 35985 provide that customer with a product prospectus and will note this prospectus delivery requirement in the Information Bulletin. 5. The Exchange will cease trading in the Shares if (i) the listing market stops trading the Shares because of a regulatory halt similar to a halt based on NYSE Arca Equities Rule 7.12 and/or a halt because the IOPV and/or the Index value of a Fund is no longer calculated or disseminated, or (ii) the listing market delists the Shares, or (iii) the NAV per share is not disseminated to all market participants. Additionally, the Exchange may cease trading the Shares if such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. This approval order is conditioned on the Exchange’s adherence to these representations. The Commission finds good cause for approving this proposed rule change 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 Shares on the NYSE is consistent with the Act.26 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 proposed rule change should benefit investors by creating, without undue delay, additional competition in the market for these Shares. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–NYSEArca– 2006–30), is hereby approved on an accelerated basis.27 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.28 Nancy M. Morris, Secretary. [FR Doc. E6–9831 Filed 6–21–06; 8:45 am] BILLING CODE 8010–01–P 26 See NYSE Order, supra note 6. U.S.C. 78s(b)(2). 28 17 CFR 200.30–3(a)(12). 27 15 E:\FR\FM\22JNN1.SGM 22JNN1

Agencies

[Federal Register Volume 71, Number 120 (Thursday, June 22, 2006)]
[Notices]
[Pages 35981-35985]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9831]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53999; File No. SR-NYSEArca-2006-30]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change 
Relating to the Trading of WisdomTree Exchange Traded Funds Pursuant to 
Unlisted Trading Privileges

June 15, 2006.
    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 June 15, 2006, NYSE Arca, Inc. (the ``Exchange''), through its 
wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE Arca 
Equities'' or the ``Corporation''), filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons and is 
approving 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

    Pursuant to NYSE Arca Equities Rule 5.2(j)(3), the Exchange 
proposes to trade, pursuant to unlisted trading privileges (``UTP''), 
shares (``Shares'') of the following thirty-four (34) exchange traded 
funds (``ETFs''), which are Investment Company Units under the Rule: 
(1) WisdomTree Europe Total Dividend Fund; (2) WisdomTree Europe High-
Yielding Equity Fund; (3) WisdomTree Japan Total Dividend Fund; (4) 
WisdomTree Japan High-Yielding Equity Fund; (5) WisdomTree DIEFA Fund; 
(6) WisdomTree DIEFA High Yielding Equity Fund; (7) WisdomTree Pacific 
ex-Japan Total Dividend Fund; (8) WisdomTree Pacific ex-Japan High-
Yielding Equity Fund; (9) WisdomTree International LargeCap Dividend 
Fund; (10) WisdomTree International MidCap Dividend Fund; (11) 
WisdomTree International SmallCap Dividend Fund; (12) WisdomTree 
International Dividend Top 100 Fund; (13) WisdomTree Europe Dividend 
Top 100 Fund; (14) WisdomTree Europe SmallCap Dividend Fund; (15) 
WisdomTree Japan SmallCap Dividend Fund; (16) WisdomTree International 
Consumer Non-Cyclical Sector Fund; (17) WisdomTree International Basic 
Materials Sector Fund; (18) WisdomTree International Communications 
Sector Fund; (19) WisdomTree International Consumer Cyclical Sector 
Fund; (20) WisdomTree International Energy Sector Fund; (21) WisdomTree 
International Financial Sector Fund; (22) WisdomTree International 
Healthcare Sector Fund; (23) WisdomTree International Industrial Sector 
Fund; (24) WisdomTree International Technology Sector Fund; (25) 
WisdomTree International Utilities Sector Fund; (26) WisdomTree 
Emerging Markets Total Dividend Fund; (27) WisdomTree Emerging Markets 
High-Yielding Equity Fund; (28) WisdomTree Emerging Markets Dividend 
Top 100 Fund; (29) WisdomTree Latin America Dividend Fund; (30) 
WisdomTree Asia Emerging Markets Total Dividend Fund; (31) WisdomTree 
Asia Emerging Markets High-Yielding Equity Fund; (32) WisdomTree China 
Dividend Fund; (33) WisdomTree Hong Kong Dividend Fund; and (34) 
WisdomTree Singapore Dividend Fund (collectively, the ``Funds'').\3\
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    \3\ ``WisdomTree,'' ``High-Yielding Equity,'' ``Dividend Top 
100,'' ``WisdomTree DIEFA,'' ``International Dividend Top 100,'' and 
``Dividend Stream'' are servicemarks of WisdomTree Investments, Inc.
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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. The 
text of these statements may be examined at the places specified in 
Item III below, and is set forth in Sections A, B, and C below.

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

1. Purpose
    Pursuant to NYSE Arca Equities Rule 5.2(j)(3), the Exchange 
proposes to trade, pursuant to UTP, Shares of the Funds. The Funds are 
separate investment portfolios of the WisdomTree Trust (the 
``Trust'').\4\ A rule proposal for the original listing and trading of 
the Shares was filed with the Commission by the New York Stock 
Exchange, LLC (``NYSE'') \5\ and was approved on June 15, 2006.\6\ The 
Shares are Investment Company Units under NYSE Arca Equities Rule 
5.2(j)(3).
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    \4\ The Trust will be registered under the Investment Company 
Act of 1940 (15 U.S.C. 80a), (the ``Investment Company Act''). The 
Trust filed with the Commission a Registration Statement for certain 
Funds (specifically, numbers 1 to 15 of the Funds specified above) 
on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a), and 
under the Investment Company Act relating to the Funds (File Nos. 
333-132380 and 811-21864) on March 13, 2006, and filed an amendment 
thereto on June 5, 2006, (``Registration Statement''). In the June 
5, 2006, amendment to the Registration Statement, the Trust changed 
the names of the WisdomTree DIPR Fund and WisdomTree DIPR High-
Yielding Equity Fund to the WisdomTree Pacific ex-Japan Total 
Dividend Fund and WisdomTree Pacific ex-Japan High-Yielding Equity 
Fund, respectively. In contrast to the Funds, which each invest in 
dividend-paying non-U.S. equity securities, the Trust also consists 
of six funds that invest in indexes comprised of dividend-paying 
U.S. equity securities, as described in the Registration Statement, 
that are not included in this rule proposal.
    On April 19, 2006, the Trust filed with the Commission an 
Application for Orders under Sections 6(c) and 17(b) of the 
Investment Company Act for the purpose of exempting all of the Funds 
from various provisions of the Investment Company Act and the rules 
thereunder (``Application'').
    \5\See File No. SR-NYSE-2006-41. (``NYSE Proposal'').
    \6\See Securities Exchange Act Release No. 53998 (File No. SR-
NYSE-2006-41) (``NYSE Order'').
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    The Funds will hold certain securities (``Component Securities'') 
selected to correspond generally to the performance of the following 
indexes, respectively (the ``Indexes,'' ``Underlying Indexes'' or 
``International Indexes''): (1) WisdomTree Europe Dividend Index; (2) 
WisdomTree Europe High-Yielding Equity Index; (3) WisdomTree Japan 
Dividend Index; (4) WisdomTree Japan High-Yielding Equity Index; (5) 
WisdomTree Dividend Index of Europe, Far East Asia and Australasia 
(referred to as the ``WisdomTree DIEFA Index''); (6) WisdomTree DIEFA 
High-Yielding Equity Index; (7) WisdomTree Dividend Index of the 
Pacific Region (referred to as the ``WisdomTree Pacific ex-Japan 
Index''); (8) WisdomTree Pacific ex-Japan High-Yielding Equity Index; 
(9) WisdomTree International LargeCap

[[Page 35982]]

Dividend Index; (10) WisdomTree International MidCap Dividend Index; 
(11) WisdomTree International SmallCap Dividend Index; (12) WisdomTree 
International Dividend Top 100 Index; (13) WisdomTree Europe Dividend 
Top 100 Index; (14) WisdomTree Europe SmallCap Dividend Index; (15) 
WisdomTree Japan SmallCap Dividend Index; (16) WisdomTree International 
Consumer Non-Cyclical Sector Index; (17) WisdomTree International Basic 
Materials Sector Index; (18) WisdomTree International Communications 
Sector Index; (19) WisdomTree International Consumer Cyclical Sector 
Index; (20) WisdomTree International Energy Sector Index; (21) 
WisdomTree International Financial Sector Index; (22) WisdomTree 
International Healthcare Sector Index; (23) WisdomTree International 
Industrial Sector Index; (24) WisdomTree International Technology 
Sector Index; (25) WisdomTree International Utilities Sector Index; 
(26) WisdomTree Emerging Markets Dividend Index (``EMDI''); (27) 
WisdomTree Emerging Markets High-Yielding Equity Index (``EMDI HYE''); 
(28) WisdomTree Emerging Markets Dividend Top 100 Index (``EMDI Top 
100''); (29) WisdomTree Latin America Dividend Index (``LDI''); (30) 
WisdomTree Asia Emerging Markets Dividend Index (``AEMDI''); (31) 
WisdomTree Asia Emerging Markets High-Yielding Equity Index (``AEMDI 
HYE''); (32) WisdomTree China Dividend Index; (33) WisdomTree Hong Kong 
Dividend Index and (34) WisdomTree Singapore Dividend Index.
    The investment objective of each Fund will be to provide investment 
returns that closely correspond to the price, dividend, and yield 
performance of its Underlying Index. In seeking to achieve the 
respective investment objective of each Fund, BNY Investment Advisors 
(the ``Subadvisor'') may utilize a ``replication'' strategy, or a 
``representative sampling'' strategy with respect to its Underlying 
Index. The Trust expects that a Fund using a replication strategy will 
invest in substantially all of the component securities in its 
portfolio in the same approximate proportions as in its Index. A Fund 
utilizing a representative sampling strategy generally will invest in a 
significant number of the component securities of its Underlying Index, 
but it may not invest in all of the component securities of its 
Underlying Index. Each Fund's investment objectives, policies and 
investment strategies are fully disclosed in its relevant prospectus 
and statement of additional information (``SAI'').
The Shares
    A description of the operation of the Funds, the Indexes, and the 
Shares is set forth in the NYSE Proposal. To summarize, the Trust will 
issue, with respect to each Fund on a continuous offering basis, only 
specified large aggregations of Shares (each such aggregation a 
``Creation Unit'') currently expected to range from 25,000 to 200,000 
Shares, as will be clearly stated in such Fund's Prospectus.
    The Funds will offer and sell Creation Units of Shares through ALPS 
Distributors, Inc. (the ``Distributor'') on a continuous basis, by or 
through participants that have entered into participant agreements 
(each, an ``Authorized Participant'') \7\ with the Distributor. The 
Funds will offer and sell Creation Units of Shares at the NAV per share 
next determined after receipt of an order in proper form. The NAV of 
the Shares will be determined as of the close of regular trading on the 
NYSE (the ``NAV Calculation Time,'' currently expected to be 4 p.m. 
Eastern Time (``ET'')) on each business day.\8\
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    \7\ Authorized Participants are Depository Trust Company 
(``DTC'') participants that must be registered as broker-dealers 
under the Exchange Act (unless offering or selling shares outside 
the U.S. and not otherwise required to be registered).
    \8\ A ``business day'' with respect to each Fund is any day on 
which the NYSE is open for business.
---------------------------------------------------------------------------

    Purchases and redemptions of Creation Units will be made generally 
by means of an in-kind tender of specified securities (``Deposit 
Securities''), with any cash portion of the purchase price (``Cash 
Requirement'') and redemption proceeds to be kept to a minimum, as 
described in the Registration Statement. The Deposit Securities and the 
Cash Requirement collectively are referred to as the ``Creation 
Deposit.'' The Cash Requirement is a cash payment designed to ensure 
that the NAV of a Creation Deposit is identical to the NAV of the 
Creation Unit it is used to purchase. The Cash Requirement will be the 
amount equal to the difference between the NAV of a Creation Unit and 
the market value of the Deposit Securities. Authorized Participants 
that wish to purchase a Creation Unit must transfer the Creation 
Deposit to the accounts maintained at the applicable sub-custodians. 
Creation Units are then separable upon issuance into the Shares that 
will be traded on the NYSE Arca Marketplace on a UTP basis.\9\
---------------------------------------------------------------------------

    \9\ Shares are separate and distinct from the underlying 
securities comprising the portfolio of a Fund. The Exchange expects 
that the number of outstanding Shares will increase and decrease as 
a result of in-kind deposits and withdrawals of the underlying 
securities.
---------------------------------------------------------------------------

    The Shares will not be individually redeemable but will only be 
redeemable in Creation Units. To redeem, an Authorized Participant must 
accumulate enough Shares to constitute a Creation Unit. Redemption 
requests must be placed by or through an Authorized Participant. 
Redemption requests in good order will receive the NAV next determined 
after the request is received. Procedures for redemptions are analogous 
(in reverse) to those for purchase of Creation Units, except that 
redemption requests are made directly to the Fund and are not made 
through the Distributor.
    More information regarding the creation and redemption process is 
provided in the Funds' Registration Statement, SAI, and the NYSE 
Proposal.
Availability of Information Regarding Shares and the Underlying Indexes
    In addition to the list of names and amount of each security 
constituting the current Deposit Securities, on each business day, the 
Cash Requirement effective as of the previous business day, per 
outstanding share of each Fund, will be made available. Every 15 
seconds during the NYSE's regular trading hours (normally 9:30 a.m. to 
4:15 p.m., ET), there will be disseminated though a major market vendor 
or on the Consolidated Tape an amount per share representing the sum of 
the estimated Cash Requirement effective through and including the 
previous business day, plus the current value of the Deposit 
Securities, on a per-Share basis. This amount represents the estimated 
NAV of a Share (sometimes referred to as the Indicative Optimized 
Portfolio Value (``IOPV''), and reflects changes in the currency rates 
between the U.S. dollar and the applicable home foreign currency. The 
IOPV for the Funds will be calculated by the Calculation Agent 
(Bloomberg L.P.).
    While the IOPV is expected to be generally very close to the most 
recently calculated Fund NAV on a per-Fund-share basis, it is possible 
that the value of the portfolio of securities held by each Fund may 
diverge from the Deposit Securities values during the trading day. In 
such case, the IOPV will not precisely reflect the value of each Fund's 
portfolio. However, during the trading day, the IOPV can be expected to 
closely approximate the value per Fund share of the portfolio of 
securities for each Fund, except under unusual circumstances (e.g., in 
the case of extensive rebalancing of multiple securities in a

[[Page 35983]]

Fund at the same time by WisdomTree Asset Management, Inc. (the 
``Advisor'')).
    According to the NYSE Proposal, where there is an overlap in 
trading hours between the foreign and U.S. markets with respect to the 
Funds, the Calculation Agent will update the applicable IOPV at least 
every 15 seconds from 9:30 a.m. to 4:15 p.m. ET to reflect price 
changes in the applicable foreign market or markets and convert such 
prices into U.S. dollars, based on the applicable currency exchange 
rate. At times when the foreign market or markets are closed during the 
hours of 9:30 a.m. to 4:15 p.m. ET, the IOPV will be updated at least 
every 15 seconds during these hours to reflect changes in currency 
exchange rates after the foreign markets close. Where there is no 
overlap in trading hours between the foreign and U.S. markets, then the 
IOPV will be updated at least every 15 seconds from 9:30 a.m. to 4:15 
p.m. ET to reflect changes in currency exchange rates after the foreign 
markets close.
    In addition, the following information will be disseminated: (i) 
Continuously from 9:30 a.m. to 4:15 p.m. ET, last sale prices of Shares 
over the Consolidated Tape, and (ii) at least every 15 seconds 
throughout such hours, the IOPV. Comparing these two figures allows an 
investor to determine whether, and to what extent, Shares are selling 
at a premium or a discount to the NAV. The intra-day value of each 
Index, based on the market price of its component securities, will be 
updated and disseminated every 15 seconds over the Consolidated Tape or 
through organizations authorized by the Calculation Agent each business 
day.\10\
---------------------------------------------------------------------------

    \10\ All Index values will be disseminated only from 9:30 a.m. 
to 4:15 p.m. ET. As with international indexes underlying existing 
ETFs, the value of each Index will be updated and disseminated every 
15 seconds during these hours each business day to reflect (i) 
changing market prices if there is any overlap between the normal 
market hours in the U.S. and the market(s) covered by such Index 
(otherwise closing or last-sale prices in the applicable non-U.S. 
market are used), and (ii) changing currency exchange rates. Index 
values will not be disseminated from 4:15 p.m. to 8 p.m. ET because 
the all relevant international markets are closed during this time. 
Telephone conversation between David Strandberg, Director, Issuer 
Services, NYSE Arca, Inc. and Ronesha Butler, Special Counsel, 
Division of Market Regulation (``Divison''), Commission, on June 15, 
2006.
---------------------------------------------------------------------------

    Information on the Indexes will be available on the Funds' Web site 
(http://www.wisdomtree.com), as will a description of the rules-based 
methodology. Each business day, the Web site will publish free of 
charge (or provide a link to another Web site that will publish free of 
charge) the securities in each Fund's portfolio and their respective 
weightings, each Fund's per share NAV and last-traded price and 
midpoint of the bid/ask spread as of the NAV calculation time, all as 
of the prior business day. The components and weightings of the 
Indexes, as well as each Fund's portfolio, will also be available 
through unaffiliated third-party major market data vendors, such as 
Bloomberg L.P.
    All the securities included in the International Indexes will be 
listed on major stock exchanges in their respective countries. A Web 
address exists for every international exchange where the international 
component securities trade and ``quotations'' (which may be 
disseminated on a delayed basis or may not be updated during NYSE 
trading hours) can be accessed for each of such securities through such 
Web address. In addition, U.S. retail investors with access to the 
Internet can access ``quotations'' with respect to these foreign 
securities through Yahoo Finance! (http://finance.yahoo.com), as well 
as other financial Web sites. Investors with access to a Bloomberg 
machine can directly access ``quotations'' and fundamental data on 
these foreign securities. In addition, according to the NYSE Proposal, 
issuers of all component securities of any International Index file 
disclosure documents, such as prospectuses, with their respective 
regulators.
    The Funds' Web site will be publicly accessible and free of charge 
to all investors and will provide a link to the Web address for every 
exchange on which the securities of each Index are listed. The 
Exchange's Web site will include a hyperlink to the Funds' Web site.
    According to the NYSE Proposal, the Calculation Agent will 
disseminate Index information through the Bloomberg Professional 
Service, which is available to subscribers. Index values on a total 
return basis will be disseminated on an end-of-day basis through the 
Bloomberg Professional Service. Price index values will be calculated 
by the Calculation Agent and disseminated every 15 seconds from 9:30 
a.m. to 4:15 p.m. ET to the Securities Industry Automation Corporation 
(``SIAC'') so that such Index values can print to the Consolidated 
Tape. A ``total return Index value'' reflects price appreciation (or 
depreciation) of the underlying securities, plus reinvestment of 
dividends. A ``price Index value'' reflects only price appreciation (or 
depreciation) of the underlying securities.
    According to the NYSE Proposal, the Calculation Agent will 
disseminate over the Consolidated Tape values for each Underlying Index 
once each trading day, based on closing prices of the securities in 
each such Index. Each Fund will make available on a daily basis through 
National Securities Clearing Corporation (the ``NSCC'') the names and 
required number of Shares of each of the Deposit Securities in a 
Creation Unit, as well as information regarding the Cash Requirement. 
The NAV for each Fund will be calculated and disseminated daily. The 
Funds' Web site, accessible to all investors at no charge, will publish 
the current version of the Prospectus and SAI, the Underlying Index for 
each Fund, as well as additional quantitative information that is 
updated on a daily basis, including daily trading volume, closing price 
and closing NAV for each Fund. The NYSE will disseminate a variety of 
data with respect to each Fund on a daily basis. Information with 
respect to recent NAV, net accumulated dividend, final dividend amount 
to be paid, Shares outstanding, estimated cash amount, and total cash 
amount per Creation Unit will be made available each day, prior to 9:30 
a.m. ET.
    The closing prices of the Funds' Deposit Securities are readily 
available from, as applicable, the relevant markets, automated 
quotation systems, published or other public sources or on-line 
information services, such as Bloomberg or Reuters.
UTP Trading Criteria
    The Exchange represents that it will cease trading the Shares of a 
Fund during the listing market's trading hours if: (a) The listing 
market stops trading the Shares because of a regulatory halt similar to 
a halt based on NYSE Arca Equities Rule 7.12 and/or a halt because the 
IOPV and/or the Index value of a Fund is no longer calculated or 
disseminated; or (b) the listing market delists the Shares; or (c) the 
NAV per share is not disseminated to all market participants.\11\ 
Additionally, the Exchange may cease trading the Shares of a Fund if 
such other event shall occur or condition exists which in the opinion 
of the Exchange makes further dealings on the Exchange inadvisable.
---------------------------------------------------------------------------

    \11\ Telephone conversation between Glenn H. Gsell, Director, 
Regulation, NYSE Arca, Inc. and Ronesha Butler, Special Counsel, and 
Angela Muehr, Attorney, Division, Commission, on June 15, 2006.
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Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's

[[Page 35984]]

existing rules governing the trading of equity securities. Shares will 
trade on the NYSE Arca Marketplace from 9:30 a.m. ET until 8 p.m. ET. 
The Exchange has appropriate rules to facilitate transactions in the 
Shares during all trading sessions. The minimum trading increment for 
Shares on the Exchange will be $0.01.
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares of a Fund. Trading may be halted because of 
market conditions or for reasons that, in the view of the Exchange, 
make trading in the Shares inadvisable. These may include: (1) The 
extent to which trading is not occurring in the securities comprising 
an Underlying Index of a Fund, or (2) whether other unusual conditions 
or circumstances detrimental to the maintenance of a fair and orderly 
market are present. In addition, trading in the Shares will be subject 
to trading halts caused by extraordinary market volatility pursuant to 
the Exchange's ``circuit breaker'' rule \12\ or by the halt or 
suspension of trading of the underlying securities. See ``UTP Trading 
Criteria'' above for specific instances when the Exchange will cease 
trading the Shares.
---------------------------------------------------------------------------

    \12\ See NYSE Arca Equities Rule 7.12.
---------------------------------------------------------------------------

    Shares will be deemed ``Eligible Listed Securities,'' as defined in 
NYSE Arca Equities Rule 7.55, for purposes of the Intermarket Trading 
System (``ITS'') Plan and therefore will be subject to the trade 
through provisions of NYSE Arca Equities Rule 7.56, which require that 
ETP Holders avoid initiating trade-throughs for ITS securities.
    Unless exemptive or no-action relief is available, the Shares will 
be subject to the short sale rule, Rule 10a-1 and Regulation SHO under 
the Act. If exemptive or no-action relief is provided, the Exchange 
will issue a notice detailing the terms of the exemption or relief.
Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products to monitor trading in the 
Shares. The Exchange represents that these procedures are adequate to 
monitor Exchange trading of the Shares in all trading sessions.
    The Exchange's current trading surveillance focuses on detecting 
securities trading outside their normal patterns. When such situations 
are detected, surveillance analysis follows and investigations are 
opened, where appropriate, to review the behavior of all relevant 
parties for all relevant trading violations.
    The Exchange is able to obtain information regarding trading in the 
Shares and the securities comprising the Underlying Indexes through ETP 
Holders in connection with such ETP Holders' proprietary or customer 
trades. In addition, the Exchange may obtain trading information via 
the Intermarket Surveillance Group (``ISG'') from other exchanges who 
are members or affiliates of the ISG.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
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 Creation Unit Aggregations (and 
that Shares are not individually redeemable); (2) Funds' calculation of 
NAV; (3) 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; \13\ (4) how information 
regarding the IOPV is disseminated; (5) the requirement that ETP 
Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (6) trading information.
---------------------------------------------------------------------------

    \13\ The Exchange has proposed to amend NYSE Arca Equities Rule 
9.2(a) (``Diligence as to Accounts'') to provide that ETP Holders, 
before recommending a transaction, must have reasonable grounds to 
believe that the recommendation is suitable for the customer based 
on any facts disclosed by the customer as to his other security 
holdings and as to his financial situation and needs. Further, the 
proposed rule amendment provides that ETP Holders should make 
reasonable efforts to obtain the customer's financial status, tax 
status, investment objectives and any other information that they 
believe would be useful to make a recommendation. See Amendment No. 
2 to SR-PCX-2005-115 (May 5, 2006).
---------------------------------------------------------------------------

    The Information Bulletin will advise ETP Holders, prior to the 
commencement of trading, of the prospectus delivery requirements 
applicable to the Funds.\14\ The Information Bulletin will also discuss 
any relief, if granted by the Commission or the staff, from any rules 
under the Securities Exchange Act of 1934.\15\
---------------------------------------------------------------------------

    \14\ The Application included a request that the exemptive order 
also grant relief from Section 24(d) of the 1940 Act, which would 
permit dealers to sell Shares in the secondary market unaccompanied 
by a statutory prospectus when prospectus delivery is not required 
by the Securities Act of 1933. Any Product Description used in 
reliance on Section 24(d) exemptive relief will comply with all 
representations and conditions set forth in the order.
    \15\ 15 U.S.C. 78a.
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    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 disclose that the NAV for 
the Shares will be calculated shortly after 4 p.m. ET each trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \16\ in general and furthers the 
objectives of Section 6(b)(5),\17\ in particular, in that it is 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transaction in securities, to remove impediments and perfect the 
mechanisms of a free and open market, and, in general, to protect 
investors and the public interest.
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    \16\ 15 U.S.C. 78s(b).
    \17\ 15 U.S.C. 78s(b)(5).
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    In addition, the Exchange believes that the proposal is consistent 
with Rule 12f-5 under the Act \18\ because it deems the Shares to be 
equity securities, thus rendering the Shares subject to the Exchange's 
existing rules governing the trading of equity securities.
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    \18\ 17 CFR 240.12f-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

    The Exchange has neither solicited nor received written comments on 
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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File

[[Page 35985]]

Number SR-NYSEArca-2006-30 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2006-30. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEArca-2006-30 and should be submitted on or before 
July 13, 2006.

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.\19\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\20\ 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.
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    \19\ 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).
    \20\ 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,\21\ which permits an exchange to trade, 
pursuant to UTP, a security that is listed and registered on another 
exchange.\22\ The Commission notes that it previously approved the 
listing and trading of the Shares on the NYSE.\23\ The Commission also 
finds that the proposal is consistent with Rule 12f-5 under the 
Act,\24\ 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. NYSEArca rules deem the Shares to be equity securities, 
thus trading in the Shares will be subject to the Exchange's existing 
rules governing the trading of equity securities.
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    \21\ 15 U.S.C. 78l(f).
    \22\ 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.
    \23\ See NYSE Order, supra note 6.
    \24\ 17 CFR 240.12f-5.
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    The Commission further believes that the proposal is consistent 
with Section 11A(a)(1)(C)(iii) of the Act,\25\ 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.
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    \25\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    In support of the portion of the proposed rule change regarding UTP 
of the Shares, the Exchange has made the following representations:
    1. The Exchange has appropriate rules to facilitate transactions in 
this type of security in all trading sessions.
    2. The Exchange's surveillance procedures are adequate to properly 
monitor the trading of the Shares on the Exchange.
    3. The Exchange will distribute an Information Bulletin to its 
members prior to the commencement of trading of the Shares on the 
Exchange that explains the special characteristics and risks of trading 
the Shares.
    4. The Exchange will require a member with a customer who purchases 
newly issued Shares on the Exchange to provide that customer with a 
product prospectus and will note this prospectus delivery requirement 
in the Information Bulletin.
    5. The Exchange will cease trading in the Shares if (i) the listing 
market stops trading the Shares because of a regulatory halt similar to 
a halt based on NYSE Arca Equities Rule 7.12 and/or a halt because the 
IOPV and/or the Index value of a Fund is no longer calculated or 
disseminated, or (ii) the listing market delists the Shares, or (iii) 
the NAV per share is not disseminated to all market participants. 
Additionally, the Exchange may cease trading the Shares if such other 
event shall occur or condition exists which in the opinion of the 
Exchange makes further dealings on the Exchange inadvisable.
    This approval order is conditioned on the Exchange's adherence to 
these representations.
    The Commission finds good cause for approving this proposed rule 
change 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 Shares on the NYSE is 
consistent with the Act.\26\ 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 proposed rule change should 
benefit investors by creating, without undue delay, additional 
competition in the market for these Shares.
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    \26\ See NYSE Order, supra note 6.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSEArca-2006-30), is hereby approved 
on an accelerated basis.\27\
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    \27\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-9831 Filed 6-21-06; 8:45 am]
BILLING CODE 8010-01-P