Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change to Trade iShares Silver Trust Pursuant to Unlisted Trading Privileges, 10797-10801 [E7-4192]
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Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(i) of the Act5 and Rule 19b–
4(f)(1)6 thereunder because it constitutes
a stated policy, practice, or
interpretation with respect to the
meaning, administration, or
enforcement of an existing rule of DTC.
At any time within 60 days of the filing
of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
jlentini on PROD1PC65 with NOTICES
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
No. SR–DTC–2007–03 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
No. SR–DTC–2007–03. 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
5 15
6 17
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
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21:24 Mar 08, 2007
Jkt 211001
available for inspection and copying in
the Commission’s Public Reference
Section, 100 F Street, NE., Washington,
DC 20549. Copies of such filing also will
be available for inspection and copying
at DTC’s principal office and on DTC’s
Web site at https://www.dtc.org/impNtc/
mor/. 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 submission
should refer to File No. SR–DTC–2007–
03 and should be submitted on or before
March 30, 2007.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4188 Filed 3–8–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55388; File No. SR–
NASDAQ–2006–067]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule
Change To Retroactively Reduce Fees
for Nasdaq’s Risk Management Service
March 2, 2007.
On December 29, 2006, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’)1 and Rule
19b–4 thereunder,2 a proposed rule
change to make retroactive to November
1, 2006, certain reductions in fees
charged for the Nasdaq Risk
Management Service (‘‘Service’’). In SR–
NASDAQ–2006–066,3 Nasdaq reduced
the per trade fee for the Service to
$0.025, and capped the per month total
Service fee per clearing firm at $7,500.
The instant proposed rule change would
make those same fee and cap reductions
retroactive to November 1, 2006. Nasdaq
believes that these fee reductions will
ensure that Nasdaq’s charges for risk
management services remain
competitive with those of providers of
similar services. The proposed rule
change was published for notice and
7 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 55131
(January 19, 2007), 72 FR 3891 (January 26, 2007)
(SR–NASDAQ–2006–066).
1 15
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10797
comment in the Federal Register on
January 26, 2007.4 The Commission
received no comments on the proposal.
The Commission has reviewed
carefully the proposed rule change and
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 5 and, in particular,
the requirements of Section 6(b)(4) of
the Act,6 which requires, among other
things, that Nasdaq’s rules provide for
the equitable allocation of reasonable
dues, fees and other charges among
members and issuers and other persons
using any facility or system which
Nasdaq operates or controls, and that it
not unfairly discriminate between
customers, issuers, brokers or dealers.
The Commission believes that the
proposed rule change is consistent with
these statutory standards. The
Commission believes that reduction of
the fee and cap for the Service
retroactive to November 1, 2006 will
enhance competition among providers
of similar services.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act7, that the
proposed rule change (SR–NASDAQ–
2006–067) be, and it hereby is,
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4187 Filed 3–8–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55385; File No. SR–
NASDAQ–2007–018]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change to
Trade iShares Silver Trust Pursuant to
Unlisted Trading Privileges
March 2, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
4 See Securities Exchange Act Release No. 55130
(January 19, 2007), 72 FR 3892.
5 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(4).
7 15 U.S.C. 78s(b)(2).
8 17 CFR 200.30–3(a)(12).
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Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 1,
2007, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’) 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
Nasdaq. This order provides notice of
the proposed rule change and approves
it on an accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq is proposing to trade shares
(‘‘Shares’’) of the iShares Silver Trust
(‘‘Trust’’) pursuant to unlisted trading
privileges (‘‘UTP’’). The text of the
proposed rule change is available from
Nasdaq’s Web site at https://
www.nasdaq.complinet.com, at
Nasdaq’s principal office, 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,
Nasdaq 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.
Nasdaq has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
jlentini on PROD1PC65 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to trade the Shares
on a UTP basis. Nasdaq is submitting
this filing because its current listing
standards do not extend to the Shares.
However, systems operated by Nasdaq
and its affiliates currently trade the
Shares on an over-the-counter basis as
facilities of NASD. This filing will allow
Nasdaq to trade the Shares as an
exchange.
The Shares represent beneficial
ownership interests in the net assets of
the Trust, consisting primarily of silver
bullion. The investment objective of the
Trust is for the Shares to reflect the
performance of the price of silver, less
the Trust’s expenses. The Trust is not an
investment company under the
Investment Company Act of 1940.
The Commission previously approved
the listing and trading of the Shares on
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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21:24 Mar 08, 2007
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the American Stock Exchange LLC
(‘‘Amex’’).3 Nasdaq deems the Shares to
be equity securities, thus rendering
trading in the Shares subject to Nasdaq’s
existing rules governing the trading of
equity securities, including Nasdaq Rule
4630.4 The primary trading hours for the
Shares on Nasdaq would be 9:30 a.m. to
4 p.m. ET.
Issuances of Shares will be made only
in baskets of 50,000 Shares or multiples
thereof (‘‘Baskets’’ or ‘‘Basket
Aggregations’’). The Trust issues and
redeems the Shares on a continuous
basis, by or through participants that
have entered into participant
agreements (each, an ‘‘Authorized
Participant’’).5 Baskets are issued as an
in-kind exchange for a corresponding
amount of silver. The basket amount of
silver, measured in ounces (the ‘‘Basket
Silver Amount’’) is determined on each
business day by Bank of New York, as
trustee for the Trust (‘‘Trustee’’).6
Authorized Participants are the only
persons that may place orders to create
and redeem Baskets. An Authorized
Participant purchasing a Basket is able
to separate it into individual Shares for
resale.
When calculating the net asset value
(‘‘NAV’’) per Share, the Trustee values
the silver held by the Trust on the basis
of the day’s announced London silver
fix price. The calculation methodology
for the NAV is described in more detail
in the Amex Order. After the NAV is
determined, at or about 4 p.m. ET each
business day, the Trustee then
determines the Basket Silver Amount
for orders placed by Authorized
Participants received before 4 p.m. ET
that day. The Trustee at the same time
determines an ‘‘Indicative Basket Silver
Amount’’ that Authorized Participants
can use as an indicative amount of
3 See Securities Exchange Act Release No. 53521
(March 20, 2006), 71 FR 14967 (March 24, 2006)
(SR–AMEX–2005–072) (‘‘Amex Order’’).
4 On November 16, 2006, the Commission
approved a filing by Nasdaq to adopt Rule 4630,
which governs the trading of and surveillance
procedures applicable to Commodity-Based Trust
Shares. Securities Exchange Act Release No. 54765
(November 16, 2006), 71 FR 67668 (November 22,
2006) (SR–NASDAQ–2006–009). Because silver is
included within the rule’s definition of a
commodity, Rule 4630 is applicable to the Shares.
5 An ‘‘Authorized Participant’’ is a person, who
at the time of submitting to the trustee of the Trust
an order to create or redeem one or more Baskets:
(a) Is a registered broker-dealer; (b) is a Depository
Trust Company Participant or Indirect Participant;
and (c) has in effect a valid Authorized Participant
Agreement.
6 On each business day, the Trustee makes
available, immediately prior to the opening of
trading on Amex, the Indicative Basket Silver
Amount for the creation of a Basket. The sponsor
of the Trust also makes the next day’s Indicative
Basket Silver Amount available on the Trust’s Web
site at https://www.iShares.com shortly after 4 p.m.
ET each business day.
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Fmt 4703
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silver to be deposited for issuance of the
Shares on the next business day. Thus,
although Authorized Participants place
orders to purchase Shares throughout
the trading day, the actual Basket Silver
Amount is determined at 4 p.m. ET or
shortly thereafter.
After 4 p.m. ET each business day, the
Trustee and the sponsor of the Trust
disseminate the NAV for the Shares, the
Basket Silver Amount (for orders
properly placed by 4 p.m. ET during the
day), and the next day’s Indicative
Basket Silver Amount. The Basket Silver
Amount, the Indicative Basket Silver
Amount, and the NAV are
communicated by the Trustee to all
Authorized Participants via facsimile or
electronic mail and on the Trust’s Web
Site at https://www.iShares.com (to
which Nasdaq will link from its Web
site at https://www.nasdaq.com).
Quotations for and last sale
information regarding the Shares are
disseminated through the Consolidated
Tape System. The Web site for the
Trust, which is publicly accessible at no
charge, contains the following
information: (a) The prior business day’s
NAV and the reported closing price; (b)
the mid-point of the bid-ask price in
relation to the NAV as of the time the
NAV is calculated (the ‘‘Bid-Ask
Price’’); (c) calculation of the premium
or discount of such price against such
NAV; (d) data in chart form displaying
the frequency distribution of discounts
and premiums of the Bid-Ask Price
against the NAV, within appropriate
ranges for each of the four previous
calendar quarters; (e) the Basket Silver
Amount; (f) the Indicative Basket Silver
Amount; (g) the Prospectus; and (h)
other applicable quantitative
information, such as expense ratios,
trading volumes, and the total returns of
the Shares.
The Trust’s Web site also provides at
no charge continuously updated bids
and offers indicative of the spot price of
silver.7 Complete real-time data for
silver futures contracts and options
prices traded on the COMEX, a division
of the New York Mercantile Exchange,
Inc. (‘‘NYMEX’’), is available by
subscription from Reuters and
Bloomberg and also on a delayed basis
free of charge on the NYMEX Web site
at https://www.nymex.com. The London
silver fix price is readily available from
the LBMA at https://www.lbma.org.uk,
automated quotation systems, published
or other public sources, or online
7 The Trust’s Web site’s silver spot price is
provided by The Bullion Desk (https://
thebulliondesk.com), which is not affiliated with
Amex, the Trust, the Trustee, or the sponsor of the
Trust.
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Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices
jlentini on PROD1PC65 with NOTICES
information services such as Bloomberg
or Reuters.
According to the Amex Order, Amex
also disseminates for the Trust on a
daily basis by means of CTA/CQ High
Speed Lines information with respect to
the Indicative Trust Value (‘‘ITV’’) for
the Trust. The ITV is disseminated on
a per-Share basis at least every 15
seconds from 9:30 a.m. to 4:15 p.m. ET.
The ITV is calculated based on the
amount of silver required for creations
and redemptions and a price of silver
derived from updated bids and offers
indicative of the spot price of silver.
Nasdaq will halt trading in the Shares
under the conditions specified in
Nasdaq Rules 4120 and 4121. The
conditions for a halt include a
regulatory halt by the listing market.
UTP trading in the Shares will also be
governed by provisions of Nasdaq Rule
4120(b) relating to temporary
interruptions in the calculation or wide
dissemination of the Indicative Trust
Value (which is comparable to the IIV
or IOPV of an ETF) or the value of the
spot price of silver. Additionally,
Nasdaq may cease trading the Shares if
other unusual conditions or
circumstances exist which, in the
opinion of Nasdaq, make further
dealings on Nasdaq detrimental to the
maintenance of a fair and orderly
market. Nasdaq will also follow any
procedures with respect to trading halts
as set forth in Nasdaq Rule 4120(c).
Finally, Nasdaq will stop trading the
Shares if the listing market delists them.
Nasdaq believes that its surveillance
procedures are adequate to address any
concerns about the trading of the Shares
on Nasdaq. Trading of the Shares
through NASD facilities operated by
Nasdaq is currently subject to NASD’s
surveillance procedures for equity
securities in general and ETFs in
particular. After Nasdaq begins to trade
the Shares as an exchange, NASD, on
behalf of Nasdaq, will continue to
surveil Nasdaq trading, including
Nasdaq trading of the Shares. Nasdaq’s
transition to exchange status will not
result in any change in the surveillance
process with respect to the Shares.8 In
addition, Nasdaq has entered into an
information sharing agreement with
NYMEX for the purpose of providing
information in connection with trading
8 Surveillance of all trading on NASD facilities
operated by Nasdaq, including the trading of the
Shares, is currently being conducted by NASD.
After Nasdaq begins to trade the Shares as an
exchange, NASD will continue to surveil trading
pursuant to a regulatory services agreement. Nasdaq
is responsible for NASD’s performance under this
regulatory services agreement.
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21:24 Mar 08, 2007
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in or related to COMEX silver futures
contracts.
In connection with the trading of the
Shares, Nasdaq will inform its members
in an Information Circular of the special
characteristics and risks associated with
trading the Shares. Specifically, the
Information Circular will discuss the
following: (a) The procedures for
purchases and redemptions of Shares in
Baskets (including noting that Shares
are not individually redeemable); (b)
Nasdaq Rule 2310, which imposes
suitability obligations on Nasdaq
members with respect to recommending
transactions in the Shares to customers;
(c) how information regarding the ITV is
disseminated; (d) the requirement that
members deliver a prospectus to
investors purchasing the Shares prior to
or concurrently with the confirmation of
a transaction; and (e) trading
information. Nasdaq notes that investors
purchasing Shares directly from the
Trust (by delivery of the Basket Silver
Amount) will receive a prospectus.
Members purchasing Shares from the
Trust for resale to investors will deliver
a prospectus to such investors.
In addition, the Information Circular
will reference that the Trust is subject
to various fees and expenses described
in the Registration Statement and that
the number of ounces of silver required
to create a Basket or to be delivered
upon redemption of a Basket will
gradually decrease over time because
the Shares comprising a Basket will
represent a decreasing amount of silver
due to the sale of the Trust’s silver to
pay Trust expenses. The Information
Circular will also reference the fact that
there is no regulated source of last-sale
information regarding physical silver,
that the Commission has no jurisdiction
over the trading of silver as a physical
commodity, and that the CFTC has
regulatory jurisdiction over the trading
of silver futures contracts and options
on silver futures contracts. The
Information Circular will also discuss
any relief granted by the Commission or
the staff from any rules under the Act.
2. Statutory Basis
Nasdaq believes that the proposal is
consistent with Section 6(b) of the Act 9
in general and Section 6(b)(5) of the
Act 10 in particular in that in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, remove impediments to a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. In
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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Frm 00170
Fmt 4703
addition, Nasdaq believes that the
proposal is consistent with Rule 12f–5
under the Act 11 because it deems the
Shares to be equity securities, thus
rendering trading in the Shares subject
to Nasdaq’s existing rules governing the
trading of equity securities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq 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
Written comments on the proposed
rule change were neither solicited nor
received.
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–NASDAQ–2007–018 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2007–018. 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
11 17
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10799
E:\FR\FM\09MRN1.SGM
CFR 240.12f–5.
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Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices
jlentini on PROD1PC65 with NOTICES
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 Nasdaq. 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–NASDAQ–2007–018 and
should be submitted on or before March
30, 2007.
12f–5 under the Act,17 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. Nasdaq has represented that it
meets this requirement because it deems
the Shares to be equity securities, thus
rendering trading in the Shares subject
to Nasdaq’s existing rules governing the
trading of equity securities, including
Nasdaq Rule 4630 which governs the
trading of and surveillance procedures
applicable to Commodity-based trust
shares such as the Shares.
The Commission further believes that
the proposal is consistent with Section
IV. Commission’s Findings and Order
11A(a)(1)(C)(iii) of the Act,18 which sets
Granting Accelerated Approval of
forth Congress’ finding that it is in the
Proposed Rule Change
public interest and appropriate for the
The Commission finds that the
protection of investors and the
proposed rule change, as amended, is
maintenance of fair and orderly markets
consistent with the requirements of the
to assure the availability to brokers,
Act and the rules and regulations
dealers, and investors of information
thereunder applicable to a national
with respect to quotations for and
securities exchange.12 In particular, the
transactions in securities. Quotations for
Commission finds that the proposed
and last sale information regarding the
rule change is consistent with Section
Shares are disseminated through the
6(b)(5) of the Act,13 which requires that
Consolidated Tape System.
an exchange have rules designed, among Furthermore, an ITV for each Trust on
other things, to promote just and
a per-Share basis is disseminated by
equitable principles of trade, to remove
Amex through the CTA/CQ High Speed
impediments to and perfect the
Lines at least every 15-seconds during
mechanism of a free and open market
Nasdaq’s regular trading hours. In
and a national market system, and in
addition, the Trustee disseminates the
general to protect investors and the
Basket Silver Amount, the Indicative
public interest. The Commission
Basket Silver Amount, and the NAV to
believes that this proposal should
all Authorized Participants via facsimile
benefit investors by increasing
or e-mail. This information—as well as
competition among markets that trade
additional trading data such as the prior
the Shares.
business day’s NAV and reported
closing price, the Bid-Ask Price and
In addition, the Commission finds
updated bids and offers indicative of the
that the proposal is consistent with
Section 12(f) of the Act,14 which permits spot price of silver—is also available on
the Trust’s Web site to which Nasdaq’s
an exchange to trade, pursuant to UTP,
a security that is listed and registered on Web site will link. Furthermore,
complete real-time data for silver future
another exchange.15 The Commission
contracts and option prices traded on
notes that it previously approved the
COMEX is available by subscription
listing and trading of the Shares on
Amex.16 The Commission also finds that from Bloomberg and Reuters and also on
a delayed basis free of charge on
the proposal is consistent with Rule
NYMEX’s Web site. The London silver
12 In approving this rule change, the Commission
fix price is readily available from the
notes that it has considered the proposed rule’s
LBMA Web site, automated quotation
impact on efficiency, competition, and capital
systems, published or other public
formation. See 15 U.S.C. 78c(f).
sources, or on-line information services.
13 15 U.S.C. 78f(b)(5).
If the listing market halts trading in the
14 15 U.S.C. 78l(f).
Shares, or if the ITV or the value of the
15 Section 12(a) of the Act, 15 U.S.C. 78l(a),
generally prohibits a broker-dealer from trading a
spot price of silver is not being
security on a national securities exchange unless
calculated or disseminated, Nasdaq
the security is registered on that exchange pursuant
would halt trading in the Shares.
to Section 12 of the Act. Section 12(f) of the Act
The Commission notes that, if the
excludes from this restriction trading in any
security to which an exchange ‘‘extends UTP.’’
Shares should be delisted by the listing
When an exchange extends UTP to a security, it
exchange, Nasdaq would no longer have
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.
16 See supra note 3.
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21:24 Mar 08, 2007
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17 17
18 15
PO 00000
CFR 240.12f–5.
U.S.C. 78k–1(a)(1)(C)(iii).
Frm 00171
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Sfmt 4703
authority to trade the Shares pursuant to
this order.
In support of this proposal, Nasdaq
has made the following representations:
(1) Nasdaq’s surveillance procedures
are adequate to address any concerns
associated with the trading of the Shares
on Nasdaq.
(2) Nasdaq has entered into an
Information Sharing Agreement with
NYMEX for the purpose of providing
information in connection with trading
in or related to COMEX silver futures
contracts.
(3) Nasdaq would inform its members
in an Information Circular of the special
characteristics and risks associated with
trading the Shares, including
procedures for purchases and
redemptions of Shares, suitability
recommendation requirements,
dissemination of the ITV, and trading
information.
(4) Nasdaq would require its members
to deliver a prospectus to investors
purchasing Shares prior to or
concurrently with a transaction in such
Shares and will note this prospectus
delivery requirement in the Information
Circular.
This approval order is conditioned on
Nasdaq’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 above, the Commission
previously found that the listing and
trading of the Shares on Amex is
consistent with the Act. The
Commission presently is not aware of
any regulatory issue that should cause it
to revisit that finding or would preclude
the trading of the Shares on Nasdaq
pursuant to UTP. Furthermore,
accelerated approval of this proposal
will facilitate Nasdaq’s ability to
continue trading these securities as
Nasdaq becomes an exchange with
respect to non-Nasdaq-listed securities,
where there appears to be no regulatory
concerns about such trading. Therefore,
accelerating approval of this proposal
should benefit investors by creating,
without undue delay, additional
competition in the market for such
Shares.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,19
that the proposed rule change (SR–
NASDAQ–2007–018), be, and it hereby
is, approved on an accelerated basis.
19 Id.
E:\FR\FM\09MRN1.SGM
09MRN1
Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.20
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4192 Filed 3–8–07; 8:45 am]
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.
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55386; File No. SR–
NASDAQ–2007–016]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change
Relating to the Trading of 16
Commodity-Related Securities
Pursuant to Unlisted Trading
Privileges on a Pilot Basis
March 2, 2007.
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 1,
2007, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’ 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.
This order provides notice of the
proposed rule change and approves the
proposal on an accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to amend Rule 4630
to govern trading in any CommodityRelated Security (as defined below) and
to make conforming amendments to
Rule 4120. Pursuant to the amended
rule and in accordance with the terms
and conditions specified in this filing,
Nasdaq also proposes to trade, pursuant
to unlisted trading privileges, the 16
Commodity-Related Securities
described below.
The text of the proposed rule change
is available from Nasdaq’s Web site at
https://nasdaq.complinet.com, at
Nasdaq’s principal office, and at the
Commission’s Public Reference Room.
jlentini on PROD1PC65 with NOTICES
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
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Aug<31>2005
21:24 Mar 08, 2007
Jkt 211001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq is proposing to trade the
following securities pursuant to UTP for
a pilot period of three months beginning
on March 5, 2007: (1) Shares of the
PowerShares DB Commodity Index
Tracking Fund, (2) shares of the
PowerShares DB G10 Currency Harvest
Fund, (3) shares of the PowerShares DB
Agricultural Fund, (4) shares of the
PowerShares DB Oil Fund, (5) shares of
the PowerShares DB Base Metals Fund,
(6) shares of the PowerShares DB Energy
Fund, (7) shares of the PowerShares DB
Silver Fund, (8) shares of the
PowerShares DB Gold Fund, (9) shares
of the PowerShares DB Precious Metals
Fund, (10) iPath Dow Jones-AIG
Commodity Index Total Return
Exchange-Traded Notes, (11) iPath GSCI
Total Return Index Exchange-Traded
Notes, (12) iPath Goldman Sachs Crude
Oil Total Return Index Exchange-Traded
Notes, (13) shares of the iShares GSCI
Commodity-Indexed Trust, (14) units of
the United States Oil Fund, LP, (15)
Claymore MACROShares Oil Up
Tradeable Shares, and (16) Claymore
MACROShares Oil Down Tradeable
Shares (collectively, the ‘‘Covered
Securities’’). The Commission
previously approved the original listing
and trading of each of the Covered
Securities by the New York Stock
Exchange (‘‘NYSE’’) or the American
Stock Exchange (‘‘Amex’’).3 Since the
3 Securities Exchange Act Release No. 53105
(January 11, 2006), 71 FR 3129 (January 19, 2006)
(SR–Amex–2005–059) (PowerShares DB
Commodity Index Tracking Fund); Securities
Exchange Act Release No. 54351 (August 23, 2006),
71 FR 51245 (August 29, 2006) (SR–Amex–2006–
44) (PowerShares DB G10 Currency Harvest Fund);
Securities Exchange Act Release No. 55029
(December 29, 2006), 72 FR 806 (January 8, 2007)
(SR–Amex–2006–76) (seven PowerShares DB
commodity funds); Securities Exchange Act Release
No. 53876 (May 25, 2006), 71 FR 32158 (June 2,
2006) (SR–NYSE–2006–16) (iPath Dow-Jones AIG
Commodity Index Total Return Exchange-Traded
Notes); Securities Exchange Act Release No. 53849
(May 22, 2006), 71 FR 30706 (May 30, 2006) (SR–
NYSE–2006–20) (iPath GSCI Total Return Index
Exchange-Traded Notes); Securities Exchange Act
Release No. 54177 (July 19, 2006), 71 FR 42700
(July 27, 2006) (SR–NYSE–2006–19) (iPath
PO 00000
Frm 00172
Fmt 4703
Sfmt 4703
10801
time of their listing on NYSE or Amex,
the Covered Securities have traded on
an over-the-counter (‘‘OTC’’) basis on
systems operated as facilities of NASD
by Nasdaq and its affiliates. Specifically,
the products are currently traded on the
ITS/CAES System, which Nasdaq
operates for NASD pursuant to a
Transitional System and Regulatory
Services Agreement (the ‘‘Transitional
Agreement’’).
Under Rule 602 of Regulation NMS
(the ‘‘Quote Rule’’),4 NASD is required
to collect the best bid, best offer, and
quotation sizes communicated
otherwise than on an exchange by each
NASD member acting in the capacity of
an ‘‘OTC market maker’’ for any ‘‘NMS
stock,’’ 5 unless the executed volume of
such member, during the most recent
calendar quarter, comprised one percent
or less of the aggregate trading volume
for such security (the ‘‘1% Rule’’).6
Nasdaq has operated ITS/CAES under
the Transitional Agreement in order to
allow NASD to fulfill its Quote Rule
obligation to provide a quotation facility
for non-Nasdaq exchange-listed
securities (‘‘CQS Securities’’). On March
5, 2007, NASD expects to begin to fulfill
its obligation to provide a quotation
facility for CQS Securities without
Nasdaq’s assistance through its
Alternative Display Facility (the
‘‘ADF’’).7 Also at that time, Nasdaq
expects to stop operating the ITS/CAES
System.
On July 28, 2006, the Commission
granted NASD a limited exemption 8
Goldman Sachs Crude Oil Total Return Index
Exchange-Traded Notes); Securities Exchange Act
Release No. 54013 (June 16, 2006), 71 FR 36372
(June 26, 2006) (SR–NYSE–2006–17) (iShares GSCI
Commodity-Indexed Trust); Securities Exchange
Act Release No. 53582 (March 31, 2006), 71 FR
17510 (April 6, 2006) (SR–Amex–2005–127)
(United States Oil Fund, LP); Securities Exchange
Act Release No. 54839 (November 29, 2006), 71 FR
70804 (December 6, 2006) (SR–Amex–2006–82)
(MACROShares Oil Up and Oil Down Tradeable
Shares).
4 17 CFR 242.602.
5 ‘‘OTC market maker’’ means any dealer that
holds itself out as being willing to buy from and sell
to its customers, or others, in the United States, an
NMS stock for its own account on a regular or
continuous basis otherwise than on a national
securities exchange in amounts of less than block
size. See 17 CFR 242.600(b)(52). ‘‘NMS stock’’
means any security or class of securities for which
transaction reports are collected, processed, and
made available pursuant to an effective transaction
reporting plan. See 17 CFR 242.600(b)(47).
6 OTC market makers that are not subject to the
1% Rule may nevertheless elect to communicate
quotations in exchange-listed securities to NASD, in
which case NASD must disseminate such
quotations.
7 NASD already uses the ADF to fulfill its
obligations under the Quote Rule with respect to
Nasdaq-listed securities.
8 See Letter from Robert L.D. Colby, Acting
Director, Division of Market Regulation,
E:\FR\FM\09MRN1.SGM
Continued
09MRN1
]]>Agencies
[Federal Register Volume 72, Number 46 (Friday, March 9, 2007)]
[Notices]
[Pages 10797-10801]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4192]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55385; File No. SR-NASDAQ-2007-018]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change to Trade iShares Silver Trust Pursuant to Unlisted Trading
Privileges
March 2, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 10798]]
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 1, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') 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 Nasdaq. This order provides notice of the
proposed rule change and approves it 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
Nasdaq is proposing to trade shares (``Shares'') of the iShares
Silver Trust (``Trust'') pursuant to unlisted trading privileges
(``UTP''). The text of the proposed rule change is available from
Nasdaq's Web site at https://www.nasdaq.complinet.com, at Nasdaq's
principal office, 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, Nasdaq 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. Nasdaq 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
Nasdaq proposes to trade the Shares on a UTP basis. Nasdaq is
submitting this filing because its current listing standards do not
extend to the Shares. However, systems operated by Nasdaq and its
affiliates currently trade the Shares on an over-the-counter basis as
facilities of NASD. This filing will allow Nasdaq to trade the Shares
as an exchange.
The Shares represent beneficial ownership interests in the net
assets of the Trust, consisting primarily of silver bullion. The
investment objective of the Trust is for the Shares to reflect the
performance of the price of silver, less the Trust's expenses. The
Trust is not an investment company under the Investment Company Act of
1940.
The Commission previously approved the listing and trading of the
Shares on the American Stock Exchange LLC (``Amex'').\3\ Nasdaq deems
the Shares to be equity securities, thus rendering trading in the
Shares subject to Nasdaq's existing rules governing the trading of
equity securities, including Nasdaq Rule 4630.\4\ The primary trading
hours for the Shares on Nasdaq would be 9:30 a.m. to 4 p.m. ET.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 53521 (March 20,
2006), 71 FR 14967 (March 24, 2006) (SR-AMEX-2005-072) (``Amex
Order'').
\4\ On November 16, 2006, the Commission approved a filing by
Nasdaq to adopt Rule 4630, which governs the trading of and
surveillance procedures applicable to Commodity-Based Trust Shares.
Securities Exchange Act Release No. 54765 (November 16, 2006), 71 FR
67668 (November 22, 2006) (SR-NASDAQ-2006-009). Because silver is
included within the rule's definition of a commodity, Rule 4630 is
applicable to the Shares.
---------------------------------------------------------------------------
Issuances of Shares will be made only in baskets of 50,000 Shares
or multiples thereof (``Baskets'' or ``Basket Aggregations''). The
Trust issues and redeems the Shares on a continuous basis, by or
through participants that have entered into participant agreements
(each, an ``Authorized Participant'').\5\ Baskets are issued as an in-
kind exchange for a corresponding amount of silver. The basket amount
of silver, measured in ounces (the ``Basket Silver Amount'') is
determined on each business day by Bank of New York, as trustee for the
Trust (``Trustee'').\6\ Authorized Participants are the only persons
that may place orders to create and redeem Baskets. An Authorized
Participant purchasing a Basket is able to separate it into individual
Shares for resale.
---------------------------------------------------------------------------
\5\ An ``Authorized Participant'' is a person, who at the time
of submitting to the trustee of the Trust an order to create or
redeem one or more Baskets: (a) Is a registered broker-dealer; (b)
is a Depository Trust Company Participant or Indirect Participant;
and (c) has in effect a valid Authorized Participant Agreement.
\6\ On each business day, the Trustee makes available,
immediately prior to the opening of trading on Amex, the Indicative
Basket Silver Amount for the creation of a Basket. The sponsor of
the Trust also makes the next day's Indicative Basket Silver Amount
available on the Trust's Web site at https://www.iShares.com shortly
after 4 p.m. ET each business day.
---------------------------------------------------------------------------
When calculating the net asset value (``NAV'') per Share, the
Trustee values the silver held by the Trust on the basis of the day's
announced London silver fix price. The calculation methodology for the
NAV is described in more detail in the Amex Order. After the NAV is
determined, at or about 4 p.m. ET each business day, the Trustee then
determines the Basket Silver Amount for orders placed by Authorized
Participants received before 4 p.m. ET that day. The Trustee at the
same time determines an ``Indicative Basket Silver Amount'' that
Authorized Participants can use as an indicative amount of silver to be
deposited for issuance of the Shares on the next business day. Thus,
although Authorized Participants place orders to purchase Shares
throughout the trading day, the actual Basket Silver Amount is
determined at 4 p.m. ET or shortly thereafter.
After 4 p.m. ET each business day, the Trustee and the sponsor of
the Trust disseminate the NAV for the Shares, the Basket Silver Amount
(for orders properly placed by 4 p.m. ET during the day), and the next
day's Indicative Basket Silver Amount. The Basket Silver Amount, the
Indicative Basket Silver Amount, and the NAV are communicated by the
Trustee to all Authorized Participants via facsimile or electronic mail
and on the Trust's Web Site at https://www.iShares.com (to which Nasdaq
will link from its Web site at https://www.nasdaq.com).
Quotations for and last sale information regarding the Shares are
disseminated through the Consolidated Tape System. The Web site for the
Trust, which is publicly accessible at no charge, contains the
following information: (a) The prior business day's NAV and the
reported closing price; (b) the mid-point of the bid-ask price in
relation to the NAV as of the time the NAV is calculated (the ``Bid-Ask
Price''); (c) calculation of the premium or discount of such price
against such NAV; (d) data in chart form displaying the frequency
distribution of discounts and premiums of the Bid-Ask Price against the
NAV, within appropriate ranges for each of the four previous calendar
quarters; (e) the Basket Silver Amount; (f) the Indicative Basket
Silver Amount; (g) the Prospectus; and (h) other applicable
quantitative information, such as expense ratios, trading volumes, and
the total returns of the Shares.
The Trust's Web site also provides at no charge continuously
updated bids and offers indicative of the spot price of silver.\7\
Complete real-time data for silver futures contracts and options prices
traded on the COMEX, a division of the New York Mercantile Exchange,
Inc. (``NYMEX''), is available by subscription from Reuters and
Bloomberg and also on a delayed basis free of charge on the NYMEX Web
site at https://www.nymex.com. The London silver fix price is readily
available from the LBMA at https://www.lbma.org.uk, automated quotation
systems, published or other public sources, or online
[[Page 10799]]
information services such as Bloomberg or Reuters.
---------------------------------------------------------------------------
\7\ The Trust's Web site's silver spot price is provided by The
Bullion Desk (https://thebulliondesk.com), which is not affiliated
with Amex, the Trust, the Trustee, or the sponsor of the Trust.
---------------------------------------------------------------------------
According to the Amex Order, Amex also disseminates for the Trust
on a daily basis by means of CTA/CQ High Speed Lines information with
respect to the Indicative Trust Value (``ITV'') for the Trust. The ITV
is disseminated on a per-Share basis at least every 15 seconds from
9:30 a.m. to 4:15 p.m. ET. The ITV is calculated based on the amount of
silver required for creations and redemptions and a price of silver
derived from updated bids and offers indicative of the spot price of
silver.
Nasdaq will halt trading in the Shares under the conditions
specified in Nasdaq Rules 4120 and 4121. The conditions for a halt
include a regulatory halt by the listing market. UTP trading in the
Shares will also be governed by provisions of Nasdaq Rule 4120(b)
relating to temporary interruptions in the calculation or wide
dissemination of the Indicative Trust Value (which is comparable to the
IIV or IOPV of an ETF) or the value of the spot price of silver.
Additionally, Nasdaq may cease trading the Shares if other unusual
conditions or circumstances exist which, in the opinion of Nasdaq, make
further dealings on Nasdaq detrimental to the maintenance of a fair and
orderly market. Nasdaq will also follow any procedures with respect to
trading halts as set forth in Nasdaq Rule 4120(c). Finally, Nasdaq will
stop trading the Shares if the listing market delists them.
Nasdaq believes that its surveillance procedures are adequate to
address any concerns about the trading of the Shares on Nasdaq. Trading
of the Shares through NASD facilities operated by Nasdaq is currently
subject to NASD's surveillance procedures for equity securities in
general and ETFs in particular. After Nasdaq begins to trade the Shares
as an exchange, NASD, on behalf of Nasdaq, will continue to surveil
Nasdaq trading, including Nasdaq trading of the Shares. Nasdaq's
transition to exchange status will not result in any change in the
surveillance process with respect to the Shares.\8\ In addition, Nasdaq
has entered into an information sharing agreement with NYMEX for the
purpose of providing information in connection with trading in or
related to COMEX silver futures contracts.
---------------------------------------------------------------------------
\8\ Surveillance of all trading on NASD facilities operated by
Nasdaq, including the trading of the Shares, is currently being
conducted by NASD. After Nasdaq begins to trade the Shares as an
exchange, NASD will continue to surveil trading pursuant to a
regulatory services agreement. Nasdaq is responsible for NASD's
performance under this regulatory services agreement.
---------------------------------------------------------------------------
In connection with the trading of the Shares, Nasdaq will inform
its members in an Information Circular of the special characteristics
and risks associated with trading the Shares. Specifically, the
Information Circular will discuss the following: (a) The procedures for
purchases and redemptions of Shares in Baskets (including noting that
Shares are not individually redeemable); (b) Nasdaq Rule 2310, which
imposes suitability obligations on Nasdaq members with respect to
recommending transactions in the Shares to customers; (c) how
information regarding the ITV is disseminated; (d) the requirement that
members deliver a prospectus to investors purchasing the Shares prior
to or concurrently with the confirmation of a transaction; and (e)
trading information. Nasdaq notes that investors purchasing Shares
directly from the Trust (by delivery of the Basket Silver Amount) will
receive a prospectus. Members purchasing Shares from the Trust for
resale to investors will deliver a prospectus to such investors.
In addition, the Information Circular will reference that the Trust
is subject to various fees and expenses described in the Registration
Statement and that the number of ounces of silver required to create a
Basket or to be delivered upon redemption of a Basket will gradually
decrease over time because the Shares comprising a Basket will
represent a decreasing amount of silver due to the sale of the Trust's
silver to pay Trust expenses. The Information Circular will also
reference the fact that there is no regulated source of last-sale
information regarding physical silver, that the Commission has no
jurisdiction over the trading of silver as a physical commodity, and
that the CFTC has regulatory jurisdiction over the trading of silver
futures contracts and options on silver futures contracts. The
Information Circular will also discuss any relief granted by the
Commission or the staff from any rules under the Act.
2. Statutory Basis
Nasdaq believes that the proposal is consistent with Section 6(b)
of the Act \9\ in general and Section 6(b)(5) of the Act \10\ in
particular in that in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, remove impediments to a free and open market and a
national market system, and, in general, to protect investors and the
public interest. In addition, Nasdaq believes that the proposal is
consistent with Rule 12f-5 under the Act \11\ because it deems the
Shares to be equity securities, thus rendering trading in the Shares
subject to Nasdaq's existing rules governing the trading of equity
securities.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq 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
Written comments on the proposed rule change were neither solicited
nor received.
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-NASDAQ-2007-018 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2007-018.
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
[[Page 10800]]
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 Nasdaq. 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-NASDAQ-2007-018 and should
be submitted on or before March 30, 2007.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
The Commission finds that the proposed rule change, as amended, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\12\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\13\ 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 should benefit
investors by increasing competition among markets that trade the
Shares.
---------------------------------------------------------------------------
\12\ 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).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In addition, the Commission finds that the proposal is consistent
with Section 12(f) of the Act,\14\ which permits an exchange to trade,
pursuant to UTP, a security that is listed and registered on another
exchange.\15\ The Commission notes that it previously approved the
listing and trading of the Shares on Amex.\16\ The Commission also
finds that the proposal is consistent with Rule 12f-5 under the
Act,\17\ 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. Nasdaq has represented that it meets this requirement
because it deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities, including Nasdaq Rule 4630 which governs
the trading of and surveillance procedures applicable to Commodity-
based trust shares such as the Shares.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78l(f).
\15\ 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.
\16\ See supra note 3.
\17\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------
The Commission further believes that the proposal is consistent
with Section 11A(a)(1)(C)(iii) of the Act,\18\ which sets forth
Congress' finding that it is in the public interest and appropriate for
the protection of investors and the maintenance of fair and orderly
markets to assure the availability to brokers, dealers, and investors
of information with respect to quotations for and transactions in
securities. Quotations for and last sale information regarding the
Shares are disseminated through the Consolidated Tape System.
Furthermore, an ITV for each Trust on a per-Share basis is disseminated
by Amex through the CTA/CQ High Speed Lines at least every 15-seconds
during Nasdaq's regular trading hours. In addition, the Trustee
disseminates the Basket Silver Amount, the Indicative Basket Silver
Amount, and the NAV to all Authorized Participants via facsimile or e-
mail. This information--as well as additional trading data such as the
prior business day's NAV and reported closing price, the Bid-Ask Price
and updated bids and offers indicative of the spot price of silver--is
also available on the Trust's Web site to which Nasdaq's Web site will
link. Furthermore, complete real-time data for silver future contracts
and option prices traded on COMEX is available by subscription from
Bloomberg and Reuters and also on a delayed basis free of charge on
NYMEX's Web site. The London silver fix price is readily available from
the LBMA Web site, automated quotation systems, published or other
public sources, or on-line information services. If the listing market
halts trading in the Shares, or if the ITV or the value of the spot
price of silver is not being calculated or disseminated, Nasdaq would
halt trading in the Shares.
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\18\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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The Commission notes that, if the Shares should be delisted by the
listing exchange, Nasdaq would no longer have authority to trade the
Shares pursuant to this order.
In support of this proposal, Nasdaq has made the following
representations:
(1) Nasdaq's surveillance procedures are adequate to address any
concerns associated with the trading of the Shares on Nasdaq.
(2) Nasdaq has entered into an Information Sharing Agreement with
NYMEX for the purpose of providing information in connection with
trading in or related to COMEX silver futures contracts.
(3) Nasdaq would inform its members in an Information Circular of
the special characteristics and risks associated with trading the
Shares, including procedures for purchases and redemptions of Shares,
suitability recommendation requirements, dissemination of the ITV, and
trading information.
(4) Nasdaq would require its members to deliver a prospectus to
investors purchasing Shares prior to or concurrently with a transaction
in such Shares and will note this prospectus delivery requirement in
the Information Circular.
This approval order is conditioned on Nasdaq'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 above, the Commission previously found that
the listing and trading of the Shares on Amex is consistent with the
Act. The Commission presently is not aware of any regulatory issue that
should cause it to revisit that finding or would preclude the trading
of the Shares on Nasdaq pursuant to UTP. Furthermore, accelerated
approval of this proposal will facilitate Nasdaq's ability to continue
trading these securities as Nasdaq becomes an exchange with respect to
non-Nasdaq-listed securities, where there appears to be no regulatory
concerns about such trading. Therefore, accelerating approval of this
proposal should benefit investors by creating, without undue delay,
additional competition in the market for such Shares.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\19\ that the proposed rule change (SR-NASDAQ-2007-018),
be, and it hereby is, approved on an accelerated basis.
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\19\ Id.
[[Page 10801]]
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4192 Filed 3-8-07; 8:45 am]
BILLING CODE 8010-01-P
