Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Accelerated Approval of Proposed Rule Change as Modified by Amendment No. 1 To List and Trade Nine Series of Exchange-Traded Notes of Barclays Bank PLC Linked to the Performance of Sub-Indices of the Dow Jones-AIG Commodity Index SM, 16392-16395 [E7-6189]

Download as PDF 16392 Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices become a part of its identity to investors.9 Nasdaq believes that this proposal is also consistent with the historical practice of companies that have switched among national securities exchanges. Since August 2001, approximately 200 issues have transferred their listing between the Amex, the New York Stock Exchange (‘‘NYSE’’), and NYSE Arca, while maintaining their original ticker symbol upon transfer.10 Now that Nasdaq is also a national securities exchange,11 allowing companies to maintain their symbol when transferring to Nasdaq would be consistent with the current practices of other exchanges. Finally, Nasdaq believes that the changes to its systems to accommodate one-, two-, and three-character symbols will enhance the strength of the U.S. capital markets. As a result of these technological changes, all Nasdaq systems, including the Securities Information Processor (SIP), are able to support all NYSE- and Amex-listed securities using their original symbols over its core transaction and data platforms. Nasdaq notes that this provides an added level of redundancy and resiliency for the U.S. capital markets, and is key to Nasdaq’s ability to provide a full back-up for other equity markets in the event of a national or local emergency thereby enhancing the strength of the U.S. capital markets. jlentini on PROD1PC65 with NOTICES 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,12 in 9 Nasdaq states that a market transfer will be transparent to investors because, under the Commission’s rules, a company must announce the transfer of its listing on a Form 8–K. See Form 8–K, item 3.01(d). In addition, the issuer must publish notice of its intent to delist its securities from the current market, in a press release and on its Web site. See 17 CFR 240.12d2–2(c)(2)(iii). 10 See, e.g., Allis-Chambers Energy (announced on March 7, 2007 its intent to switch from Amex to NYSE keeping the symbol ALY), Yamana Gold Inc. (announced on December 21, 2006 its intent to switch from Amex to NYSE keeping the symbol AUY), VAALCO Energy (announced on October 2, 2006 its intent to switch from Amex to NYSE keeping the symbol EGY), the transfer of 15 iShares ETFs from the Amex to NYSE Arca keeping their symbols announced on September 27, 2006, and the transfer of The Latin America Equity Fund, Inc., Credit Suisse Asset Management Income Fund, Inc., The Chile Fund, among others, from NYSE to AMEX on May 11, 2006 keeping their respective symbols CIK, LAQ and CH. A complete list of these transfers is available from Nasdaq upon request. 11 Nasdaq became operational as an exchange for Nasdaq-listed securities on August 1, 2006. See Nasdaq Issuer Alert 2006–001, available at: https:// www.complinet.com/file_store/pdf/rulebooks/ nasdaq_ia2006-001.pdf. See also Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006). 12 15 U.S.C. 78f. VerDate Aug<31>2005 18:47 Apr 03, 2007 Jkt 211001 general and with Section 6(b)(5) of the Act,13 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. Nasdaq believes that the proposal will reduce investor confusion and encourage competition among exchanges. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2007–031 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, 13 15 PO 00000 U.S.C. 78f(b)(5). Frm 00068 Fmt 4703 Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASDAQ–2007–031. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal 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–NASDAQ–2007–031 and should be submitted on or before April 25, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–6335 Filed 4–3–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55548; File No. SR–NYSE– 2006–71] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Accelerated Approval of Proposed Rule Change as Modified by Amendment No. 1 To List and Trade Nine Series of Exchange-Traded Notes of Barclays Bank PLC Linked to the Performance of Sub-Indices of the Dow Jones—AIG Commodity Index SM March 28, 2007. On August 24, 2006, the New York Stock Exchange LLC (‘‘Exchange’’ or 14 17 Sfmt 4703 E:\FR\FM\04APN1.SGM CFR 200.30–3(a)(12). 04APN1 Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices ‘‘NYSE’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade notes linked to the performance of subindices of the Dow Jones—AIG Commodity IndexSM. On February 20, 2007, the Exchange submitted Amendment No. 1.3 The proposed rule change was published for comment in the Federal Register on March 2, 2007.4 The Commission received no comments on the proposal. This order approves the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. Under Section 703.19 of NYSE’s Listed Company Manual (the ‘‘Manual’’),5 the Exchange proposes to list and trade nine series of notes (‘‘Notes’’) issued by Barclays Bank PLC (‘‘Barclays’’ or ‘‘Issuer’’), which are linked to the performance of the following sub-indices (each sub-index herein referred to as the ‘‘Index’’ with respect to the corresponding series of Notes) of the Dow Jones—AIG Commodity IndexSM: the Dow Jones— AIG Petroleum Total Return SubIndexSM; the Dow Jones—AIG Livestock Total Return Sub-IndexSM; the Dow Jones—AIG Agriculture Total Return Sub-IndexSM; the Dow Jones—AIG Grains Total Return Sub-IndexSM; the Dow Jones—AIG Energy Total Return Sub-IndexSM; the Dow Jones—AIG Precious Metals Total Return SubIndexSM; the Dow Jones—AIG ExEnergy Total Return Sub-IndexSM; the Dow Jones—AIG Industrial Metals Total Return Sub-IndexSM; and the Dow Jones—AIG Softs Total Return SubIndexSM. Barclays intends to issue the Notes under the name ‘‘iPathSM Exchange-Traded Notes.’’ The Indexes Each Index is comprised of constituents making up the Dow Jones— AIG Commodity IndexSM, which the Commission has previously reviewed in connection with the listing of exchangetraded notes.6 Each Index is comprised 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 replaced and superseded the Exchange’s original filing in its entirety. 4 See Securities Exchange Act Release No. 55352 (February 26, 2007), 72 FR 9599 (‘‘Notice’’). 5 Section 703.19 of the Manual provides that the Exchange may approve for listing and trading securities not otherwise covered by the criteria of Sections 1 and 7 of the Manual, provided the issue is suited for auction market trading. 6 See Securities Exchange Act Release No. 53876 (May 25, 2006), 71 FR 32158 (June 2, 2006) (SR– NYSE–2006–16). As set out in that filing, the Dow Jones—AIG Commodity IndexSM is designed to be jlentini on PROD1PC65 with NOTICES 2 17 VerDate Aug<31>2005 17:57 Apr 03, 2007 Jkt 211001 of commodity contracts relating to a specific industry or sector.7 For example, the Dow Jones—AIG Petroleum Total Return Sub-IndexSM includes those contracts in the Dow Jones—AIG Commodity IndexSM that relate to petroleum-related commodities: crude oil, heating oil and unleaded gasoline. Each Index is determined annually by AIG–FP and calculated daily by Dow Jones. The weightings of each Index component are a function of their weighting in the Dow Jones—AIG Commodity IndexSM, which, in turn, derives from liquidity and world production data. Dow Jones disseminates the Index value of each sub-index every 15 seconds (assuming the Index value has changed within such 15 second interval) from 8 a.m. to 3 p.m. ET and publishes a daily Index value at approximately 4 p.m. ET on each day on which the Index is calculated. The sub-index values can still be retrieved after 3 p.m. until the end of the Exchange trading day but their values are generally static after 3 p.m., although they may change if settlement values for Index components become available after that time. 16393 This credit risk is addressed by the listing standards in § 703.19(1) of NYSE’s Manual, which provide that a security may not be listed on the Exchange unless its issuer satisfies certain financial requirements. Section 703.19(2) of NYSE’s Manual requires a market value of $4 million for initial listing of debt securities. In addition, the Notes would have to comply with continued listing standards in Section 802.01D of NYSE’s Manual. The Exchange would remove from listing any security where the public distribution or aggregate market value has fallen below the specified thresholds or become so reduced to make further dealings on the Exchange inadvisable, or where such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. Pricing Information An intraday Indicative Value meant to approximate the intrinsic economic value of the Notes will be calculated and published via the facilities of the Consolidated Tape Association (‘‘CTA’’) every 15 seconds throughout the NYSE trading day on each day on which the Notes are traded on the Exchange. Additionally, Barclays or an affiliate will calculate and publish the closing Indicative Value of the Notes on each trading day at https://www.ipathetn.com. The last sale price of the Notes will also be disseminated over the consolidated tape, subject to a 20-minute delay.9 The Notes The Notes will offer investors exposure to specific commodity sectors. The Notes are debt securities of Barclays with a term of 30 years that provide for a cash payment at maturity or upon earlier exchange at the holder’s option, based on the performance of the relevant Index according to a formula set forth in the notice of NYSE’s proposal.8 Unlike traditional debt securities, the Notes would not have a minimum principal amount that would be repaid prior to or at maturity. Accordingly, the return could be less than the original issue price. Also, holders of the Notes will not receive any interest payments from the Notes. Prior to maturity, Notes may be redeemed in large aggregations as described further in the notice of NYSE’s proposal. Because the Notes will be debt securities of Barclays, the Notes are dependent upon its creditworthiness. Trading Rules The Notes will trade as equity securities, subject to NYSE rules governing, among other things, priority, parity, and precedence of orders; specialist responsibilities; margin; 10 and customer suitability requirements. The Notes will trade between the hours of 9:30 a.m. and 4 p.m. ET. The Exchange would halt trading in the Securities if the circuit breaker parameters of Exchange Rule 80B have been reached and may halt trading pursuant to Exchange Rule 123D a diversified benchmark for commodities as an asset class and reflects the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the Index plus the rate of interest that could be earned on cash collateral invested Treasury Bills. The Dow Jones—AIG Commodity IndexSM was developed by AIGI International Inc., each year is determined by AIG Financial Products Corp. (‘‘AIG-FP’’), and is calculated by Dow Jones. The relative weightings of each component commodity is determined annually according to liquidity and dollar adjusted production data in 2⁄3 and 1⁄3 shares, respectively. 7 See Notice, supra note 4, 72 FR at 9602–9604. 8 See Notice, supra note 4, 72 FR at 9601. 9 As described in the notice of the NYSE’s proposal, the Indicative Value will not reflect price changes to the price of an underlying commodity between the close of trading of the futures contract at the relevant futures exchange and the close of trading on the NYSE at 4 p.m. ET. While the market for futures trading for each of the Index commodities is open, the Indicative Value can be expected to closely approximate the redemption value of the Notes. However, during NYSE trading hours when the futures contracts have ceased trading, spreads and resulting premiums or discounts may widen, and therefore, increase the difference between the price of the Notes and their redemption value. 10 See NYSE Rule 431. PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 E:\FR\FM\04APN1.SGM 04APN1 16394 Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices pending the dissemination of material news with respect to the issuer. If the Index value or the Indicative Value is not being disseminated as required, the Exchange may halt trading during the day on which the interruption to the dissemination of the Index value or the Indicative Value first occurs. If the interruption to the dissemination of the Index value or the Indicative Value persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. Surveillance The NYSE has represented that it would rely on its existing surveillance procedures governing equities, which it represented are adequate to monitor trading of the Notes. Through information sharing agreements and its membership in the Intermarket Surveillance Group, the Exchange stated that it has access to all relevant trading information in connection with commodity futures comprising each Index. Further, the Exchange stated that it currently has the authority under NYSE Rule 476 to request the Exchange specialist in the Notes to provide NYSE Regulation with information that the specialist uses in connection with pricing the Notes on the Exchange, including specialist proprietary or other information regarding securities, commodities, futures, options on futures or other derivative instruments. The Exchange believes it also has authority to request any other information from its members—including floor brokers, specialists and ‘‘upstairs’’ firms—to fulfill its regulatory obligations. jlentini on PROD1PC65 with NOTICES Suitability Pursuant to Exchange Rule 405, the Exchange will impose a duty of due diligence on its members and member firms to learn the essential facts relating to every customer prior to trading the Notes.11 With respect to suitability recommendations and risks, the Exchange will require members, member organizations and employees thereof recommending a transaction in the Notes: (1) To determine that such transaction is suitable for the customer, and (2) to have a reasonable basis for believing that the customer can evaluate the special characteristics of, and is able to bear the financial risks of, such transaction. 11 NYSE Rule 405 requires that every member, member firm or member corporation use due diligence to learn the essential facts relative to every customer and to every order or account accepted. VerDate Aug<31>2005 17:57 Apr 03, 2007 Jkt 211001 Discussion and Commission Findings After careful consideration, 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.12 In particular the Commission finds that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act,13 which requires among other things, that the Exchange’s rules be designed to promote just and equitable principles of trade, to facilitate transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission notes that it has previously approved the listing and trading of other index-linked securities that have a structure similar to the Notes.14 The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act,15 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 Notes will be disseminated through the facilities of the Consolidated Tape Association (‘‘CTA’’). The value of each Index is calculated and disseminated daily and, because the composition of each Index is public and pricing of the constituents is transparent, it may be verified by a number of independent sources. In addition, an intraday Indicative Value for each Note series will be available through the CTA. Furthermore, financial information regarding the Issuer is publicly available, allowing investors to evaluate 12 In approving the rule, 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). 14 See, e.g., Securities Exchange Act Release Nos. 54177 (July 19, 2006), 71 FR 54177 (July 27, 2006) (SR–NYSE–2006–19) (relating to the trading of the Index-Linked Securities of Barclays Bank PLC linked to the Performance of the Goldman Sachs Crude Oil Total Return IndexTM); 53876 (May 25, 2006), 71 FR 32158 (June 2, 2006) (SR–NYSE–2006– 16) (relating to the trading of the Index-Linked Securities of Barclays Bank PLC linked to the performance of the Dow Jones—AIG Commodity Index Total Return); and 53849 (May 22, 2006), 71 FR 30706 (May 30, 2006) (SR–NYSE–2006–20) (relating to the trading of the Index-Linked Securities of Barclays Bank PLC linked to the performance of the GSCI Total Return Index). 15 15 U.S.C. 78k–1(a)(1)(C)(iii). PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 the creditworthiness of the Issuer. The Commission also believes that sufficient venues exist for obtaining reliable information so that holders of the Notes can track the value of their investment. Accordingly, the Commission finds that NYSE’s proposal is reasonably designed to promote transparency in the pricing of the Notes, and to prevent trading when a reasonable degree of transparency cannot be assured. The proposal also appears reasonably designed to prevent conveyance of inside information from the Index Calculator to market participants who may trade the Notes. In support of this proposal, the Exchange has made the following representations: (1) NYSE has received a representation from AIG–FP, the Index Sponsor, that it will (a) Implement and maintain procedures reasonably designed to prevent the use and dissemination by relevant employees of AIG–FP, in violation of applicable laws, rules and regulations, of material non-public information relating to changes in the composition or method of computation or calculation of the Index and (b) periodically check the application of such procedures as they relate to officers and directors of AIG–FP directly responsible for such changes.16 (2) NYSE will, prior to trading the Notes, distribute an information memorandum to the membership providing guidance with regard to member firm compliance responsibilities (including suitability recommendations) when handling transactions in the Notes and highlighting the special risks and characteristics of the Notes. In addition, during the initial distribution of the Notes and during any subsequent distribution of the Notes, NYSE member organizations will deliver a prospectus to investors purchasing Notes from distributors. (3) NYSE will rely on its existing surveillance procedures governing equities with regard to surveillance of the Notes, which are adequate to properly monitor trading of the Notes 16 AIG–FP is a wholly-owned guaranteed subsidiary of American International Group, Inc. It is not a broker-dealer or futures commission merchant; however, AIG–FP may have such affiliates. The Exchange has stated that Dow Jones does not have any affiliates engaged in the securities or commodities trading businesses and, as such, Dow Jones does not believe that such firewall procedures are necessary in its case. Dow Jones and the Dow Jones—AIG Commodity IndexSM Oversight Committee will adopt and maintain policies that acknowledge their obligations with respect to material non-public information. See supra note 6, 71 FR at 32159–32160 nn.10,15. E:\FR\FM\04APN1.SGM 04APN1 jlentini on PROD1PC65 with NOTICES Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices and detect violations of Exchange rules, thereby deterring manipulation. (4) With regard to the Index components, the Exchange can obtain market all relevant trading information, including customer identity information, with respect to transactions through agreements with futures exchanges and participation in the Intermarket Surveillance Group. (5) NYSE prohibits the initial and/or continued listing of any security that is not in compliance with Rule 10A–3 under the Act.17 This order is conditioned on NYSE’s adherence to these representations. Under the proposal, the Exchange will delist any series of the Notes under the following circumstances: (1) (a) If, following the initial twelve month period from the date of commencement of trading of the Notes, the Notes have more than 60 days remaining until maturity and there are fewer than 50 beneficial holders of the Notes for 30 or more consecutive trading days; (b) if fewer than 100,000 Notes remain issued and outstanding; or (c) if the market value of all outstanding Notes is less than $1,000,000. (2) If the Index value ceases to be calculated or available during the time the Notes trade on the Exchange on at least a 15 second basis through one or more major market data vendors or the sponsors of the Index. (3) If, during the time the Notes trade on the Exchange, the Indicative Value ceases to be available on a 15 second delayed basis. In addition, NYSE has represented that it would delist the Notes (unless the Commission approved a proposed rule change submitted pursuant to Rule 19b– 4 under the Act) if: (1) Dow Jones and AIG–FP substantially change either the Index component selection methodology or the weighting methodology; (2) a new component is added to the Index (or pricing information is used for a new or existing component) that constitutes more than 10% of the weight of the Index with whose principal trading market the Exchange does not have a comprehensive surveillance sharing agreement; or (3) a successor or substitute index is used in connection with the Notes. The Commission believes that each of these circumstances represents material changes to the characteristics of the Index described herein and on which the Commission is basing its findings. Under these circumstances, the Exchange could not rely on this approval to list and trade the Notes. Acceleration The Commission finds good cause to approve the proposal, as amended, prior to the thirtieth day after the amended proposal was published for comment in the Federal Register. Accelerating approval of the proposal should benefit investors who desire to participate in the designated Indexes by expediting the listing and trading of the Notes by the Exchange. The Commission also notes that the proposal is similar to others previously approved by the Commission, and does not appear to raise any new regulatory issues. Thus, the Commission finds good cause, consistent with Section 19(b)(2) of the Act,18 to grant accelerated approval of the proposed rule change, as amended. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–NYSE–2006– 71), as modified by Amendment No. 1, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.19 J. Lynn Taylor, Assistant Secretary. [FR Doc. E7–6189 Filed 4–3–07; 8:45 am] BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION Data Collection Available for Public Comments and Recommendations Notice and request for comments. ACTION: SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Small Business Administration’s intentions to request approval on a new and/or currently approved information collection. DATES: Submit comments on or before June 4, 2007. ADDRESSES: Send all comments regarding whether this information collection is necessary for the proper performance of the function of the agency, whether the burden estimates are accurate, and if there are ways to minimize the estimated burden and enhance the quality of the collection, to Janet Tasker, Deputy Associate Administrator, Office of Capital Access, Small Business Administration, 409 3rd Street SW., 8th Floor, Washington, DC 20416 FOR FURTHER INFORMATION CONTACT: Janet Tasker, Tasker, Office of Capitol 18 15 17 See 17 CFR 240.10A–3. VerDate Aug<31>2005 17:57 Apr 03, 2007 19 17 Jkt 211001 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00071 Fmt 4703 Sfmt 4703 16395 Access, 202–205–6657, janet.tasker@sba.gov. Curtis B. Rich, Management Analyst, 202–205–7030, curtis.rich@sba.gov. SUPPLEMENTARY INFORMATION: Title: ‘‘Office of Capital Access Online Survey.’’ Description of Respondents: Finance Lenders, International Finance Lenders, 7(a) Lenders and CDC’s in the 504 program, Small Business Investment Companies, Surety Bond Guarantee Companies. Form No: N/A. Annual Responses: 23,396. Annual Burden: 1,204. Jacqueline White, Chief, Administrative Information Branch. [FR Doc. E7–6247 Filed 4–3–07; 8:45 am] BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10830] Florida Disaster #FL–00021 Declaration of Economic Injury U.S. Small Business Administration. ACTION: Notice. AGENCY: SUMMARY: This is a notice of an Economic Injury Disaster Loan (EIDL) declaration for the State of Florida, dated 3/26/2007. Incident: Fire. Incident Period: 11/19/2006. Effective Date: 3/26/2007. EIDL Loan Application Deadline Date: 12/26/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator’s EIDL declaration, applications for economic injury disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary County: Miami-Dade. Contiguous Counties: Florida: Broward, Collier, Monroe. The Interest Rate is: 4.000. The number assigned to this disaster for economic injury is 108300. E:\FR\FM\04APN1.SGM 04APN1

Agencies

[Federal Register Volume 72, Number 64 (Wednesday, April 4, 2007)]
[Notices]
[Pages 16392-16395]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6189]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55548; File No. SR-NYSE-2006-71]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Granting Accelerated Approval of Proposed Rule Change as Modified by 
Amendment No. 1 To List and Trade Nine Series of Exchange-Traded Notes 
of Barclays Bank PLC Linked to the Performance of Sub-Indices of the 
Dow Jones--AIG Commodity Index \SM\

March 28, 2007.
    On August 24, 2006, the New York Stock Exchange LLC (``Exchange'' 
or

[[Page 16393]]

``NYSE'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to list and trade notes linked to the performance 
of sub-indices of the Dow Jones--AIG Commodity IndexSM. On 
February 20, 2007, the Exchange submitted Amendment No. 1.\3\ The 
proposed rule change was published for comment in the Federal Register 
on March 2, 2007.\4\ The Commission received no comments on the 
proposal. This order approves the proposed rule change, as modified by 
Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the Exchange's 
original filing in its entirety.
    \4\ See Securities Exchange Act Release No. 55352 (February 26, 
2007), 72 FR 9599 (``Notice'').
---------------------------------------------------------------------------

    Under Section 703.19 of NYSE's Listed Company Manual (the 
``Manual''),\5\ the Exchange proposes to list and trade nine series of 
notes (``Notes'') issued by Barclays Bank PLC (``Barclays'' or 
``Issuer''), which are linked to the performance of the following sub-
indices (each sub-index herein referred to as the ``Index'' with 
respect to the corresponding series of Notes) of the Dow Jones--AIG 
Commodity IndexSM: the Dow Jones--AIG Petroleum Total Return 
Sub-IndexSM; the Dow Jones--AIG Livestock Total Return Sub-
IndexSM; the Dow Jones--AIG Agriculture Total Return Sub-
IndexSM; the Dow Jones--AIG Grains Total Return Sub-
IndexSM; the Dow Jones--AIG Energy Total Return Sub-
IndexSM; the Dow Jones--AIG Precious Metals Total Return 
Sub-IndexSM; the Dow Jones--AIG ExEnergy Total Return Sub-
IndexSM; the Dow Jones--AIG Industrial Metals Total Return 
Sub-IndexSM; and the Dow Jones--AIG Softs Total Return Sub-
IndexSM. Barclays intends to issue the Notes under the name 
``iPathSM Exchange-Traded Notes.''
---------------------------------------------------------------------------

    \5\ Section 703.19 of the Manual provides that the Exchange may 
approve for listing and trading securities not otherwise covered by 
the criteria of Sections 1 and 7 of the Manual, provided the issue 
is suited for auction market trading.
---------------------------------------------------------------------------

The Indexes

    Each Index is comprised of constituents making up the Dow Jones--
AIG Commodity IndexSM, which the Commission has previously 
reviewed in connection with the listing of exchange-traded notes.\6\ 
Each Index is comprised of commodity contracts relating to a specific 
industry or sector.\7\ For example, the Dow Jones--AIG Petroleum Total 
Return Sub-IndexSM includes those contracts in the Dow 
Jones--AIG Commodity IndexSM that relate to petroleum-
related commodities: crude oil, heating oil and unleaded gasoline. Each 
Index is determined annually by AIG-FP and calculated daily by Dow 
Jones. The weightings of each Index component are a function of their 
weighting in the Dow Jones--AIG Commodity IndexSM, which, in 
turn, derives from liquidity and world production data.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 53876 (May 25, 
2006), 71 FR 32158 (June 2, 2006) (SR-NYSE-2006-16). As set out in 
that filing, the Dow Jones--AIG Commodity IndexSM is 
designed to be a diversified benchmark for commodities as an asset 
class and reflects the returns that are potentially available 
through an unleveraged investment in the futures contracts on 
physical commodities comprising the Index plus the rate of interest 
that could be earned on cash collateral invested Treasury Bills. The 
Dow Jones--AIG Commodity IndexSM was developed by AIGI 
International Inc., each year is determined by AIG Financial 
Products Corp. (``AIG-FP''), and is calculated by Dow Jones. The 
relative weightings of each component commodity is determined 
annually according to liquidity and dollar adjusted production data 
in \2/3\ and \1/3\ shares, respectively.
    \7\ See Notice, supra note 4, 72 FR at 9602-9604.
---------------------------------------------------------------------------

    Dow Jones disseminates the Index value of each sub-index every 15 
seconds (assuming the Index value has changed within such 15 second 
interval) from 8 a.m. to 3 p.m. ET and publishes a daily Index value at 
approximately 4 p.m. ET on each day on which the Index is calculated. 
The sub-index values can still be retrieved after 3 p.m. until the end 
of the Exchange trading day but their values are generally static after 
3 p.m., although they may change if settlement values for Index 
components become available after that time.

The Notes

    The Notes will offer investors exposure to specific commodity 
sectors. The Notes are debt securities of Barclays with a term of 30 
years that provide for a cash payment at maturity or upon earlier 
exchange at the holder's option, based on the performance of the 
relevant Index according to a formula set forth in the notice of NYSE's 
proposal.\8\ Unlike traditional debt securities, the Notes would not 
have a minimum principal amount that would be repaid prior to or at 
maturity. Accordingly, the return could be less than the original issue 
price. Also, holders of the Notes will not receive any interest 
payments from the Notes. Prior to maturity, Notes may be redeemed in 
large aggregations as described further in the notice of NYSE's 
proposal.
---------------------------------------------------------------------------

    \8\ See Notice, supra note 4, 72 FR at 9601.
---------------------------------------------------------------------------

    Because the Notes will be debt securities of Barclays, the Notes 
are dependent upon its creditworthiness. This credit risk is addressed 
by the listing standards in Sec.  703.19(1) of NYSE's Manual, which 
provide that a security may not be listed on the Exchange unless its 
issuer satisfies certain financial requirements.
    Section 703.19(2) of NYSE's Manual requires a market value of $4 
million for initial listing of debt securities. In addition, the Notes 
would have to comply with continued listing standards in Section 
802.01D of NYSE's Manual. The Exchange would remove from listing any 
security where the public distribution or aggregate market value has 
fallen below the specified thresholds or become so reduced to make 
further dealings on the Exchange inadvisable, or where such other event 
shall occur or condition exists which in the opinion of the Exchange 
makes further dealings on the Exchange inadvisable.

Pricing Information

    An intraday Indicative Value meant to approximate the intrinsic 
economic value of the Notes will be calculated and published via the 
facilities of the Consolidated Tape Association (``CTA'') every 15 
seconds throughout the NYSE trading day on each day on which the Notes 
are traded on the Exchange. Additionally, Barclays or an affiliate will 
calculate and publish the closing Indicative Value of the Notes on each 
trading day at https://www.ipathetn.com. The last sale price of the 
Notes will also be disseminated over the consolidated tape, subject to 
a 20-minute delay.\9\
---------------------------------------------------------------------------

    \9\ As described in the notice of the NYSE's proposal, the 
Indicative Value will not reflect price changes to the price of an 
underlying commodity between the close of trading of the futures 
contract at the relevant futures exchange and the close of trading 
on the NYSE at 4 p.m. ET. While the market for futures trading for 
each of the Index commodities is open, the Indicative Value can be 
expected to closely approximate the redemption value of the Notes. 
However, during NYSE trading hours when the futures contracts have 
ceased trading, spreads and resulting premiums or discounts may 
widen, and therefore, increase the difference between the price of 
the Notes and their redemption value.
---------------------------------------------------------------------------

Trading Rules

    The Notes will trade as equity securities, subject to NYSE rules 
governing, among other things, priority, parity, and precedence of 
orders; specialist responsibilities; margin; \10\ and customer 
suitability requirements. The Notes will trade between the hours of 
9:30 a.m. and 4 p.m. ET. The Exchange would halt trading in the 
Securities if the circuit breaker parameters of Exchange Rule 80B have 
been reached and may halt trading pursuant to Exchange Rule 123D

[[Page 16394]]

pending the dissemination of material news with respect to the issuer. 
If the Index value or the Indicative Value is not being disseminated as 
required, the Exchange may halt trading during the day on which the 
interruption to the dissemination of the Index value or the Indicative 
Value first occurs. If the interruption to the dissemination of the 
Index value or the Indicative Value persists past the trading day in 
which it occurred, the Exchange will halt trading no later than the 
beginning of the trading day following the interruption.
---------------------------------------------------------------------------

    \10\ See NYSE Rule 431.
---------------------------------------------------------------------------

Surveillance

    The NYSE has represented that it would rely on its existing 
surveillance procedures governing equities, which it represented are 
adequate to monitor trading of the Notes. Through information sharing 
agreements and its membership in the Intermarket Surveillance Group, 
the Exchange stated that it has access to all relevant trading 
information in connection with commodity futures comprising each Index. 
Further, the Exchange stated that it currently has the authority under 
NYSE Rule 476 to request the Exchange specialist in the Notes to 
provide NYSE Regulation with information that the specialist uses in 
connection with pricing the Notes on the Exchange, including specialist 
proprietary or other information regarding securities, commodities, 
futures, options on futures or other derivative instruments. The 
Exchange believes it also has authority to request any other 
information from its members--including floor brokers, specialists and 
``upstairs'' firms--to fulfill its regulatory obligations.

Suitability

    Pursuant to Exchange Rule 405, the Exchange will impose a duty of 
due diligence on its members and member firms to learn the essential 
facts relating to every customer prior to trading the Notes.\11\ With 
respect to suitability recommendations and risks, the Exchange will 
require members, member organizations and employees thereof 
recommending a transaction in the Notes: (1) To determine that such 
transaction is suitable for the customer, and (2) to have a reasonable 
basis for believing that the customer can evaluate the special 
characteristics of, and is able to bear the financial risks of, such 
transaction.
---------------------------------------------------------------------------

    \11\ NYSE Rule 405 requires that every member, member firm or 
member corporation use due diligence to learn the essential facts 
relative to every customer and to every order or account accepted.
---------------------------------------------------------------------------

Discussion and Commission Findings

    After careful consideration, 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.\12\ In particular the Commission finds that the proposed rule 
change is consistent with the requirements of Section 6(b)(5) of the 
Act,\13\ which requires among other things, that the Exchange's rules 
be designed to promote just and equitable principles of trade, to 
facilitate transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
The Commission notes that it has previously approved the listing and 
trading of other index-linked securities that have a structure similar 
to the Notes.\14\
---------------------------------------------------------------------------

    \12\ In approving the rule, 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).
    \14\ See, e.g., Securities Exchange Act Release Nos. 54177 (July 
19, 2006), 71 FR 54177 (July 27, 2006) (SR-NYSE-2006-19) (relating 
to the trading of the Index-Linked Securities of Barclays Bank PLC 
linked to the Performance of the Goldman Sachs Crude Oil Total 
Return IndexTM); 53876 (May 25, 2006), 71 FR 32158 (June 
2, 2006) (SR-NYSE-2006-16) (relating to the trading of the Index-
Linked Securities of Barclays Bank PLC linked to the performance of 
the Dow Jones--AIG Commodity Index Total Return); and 53849 (May 22, 
2006), 71 FR 30706 (May 30, 2006) (SR-NYSE-2006-20) (relating to the 
trading of the Index-Linked Securities of Barclays Bank PLC linked 
to the performance of the GSCI[supreg] Total Return Index).
---------------------------------------------------------------------------

    The Commission further believes that the proposal is consistent 
with Section 11A(a)(1)(C)(iii) of the Act,\15\ 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 
Notes will be disseminated through the facilities of the Consolidated 
Tape Association (``CTA''). The value of each Index is calculated and 
disseminated daily and, because the composition of each Index is public 
and pricing of the constituents is transparent, it may be verified by a 
number of independent sources. In addition, an intraday Indicative 
Value for each Note series will be available through the CTA. 
Furthermore, financial information regarding the Issuer is publicly 
available, allowing investors to evaluate the creditworthiness of the 
Issuer. The Commission also believes that sufficient venues exist for 
obtaining reliable information so that holders of the Notes can track 
the value of their investment. Accordingly, the Commission finds that 
NYSE's proposal is reasonably designed to promote transparency in the 
pricing of the Notes, and to prevent trading when a reasonable degree 
of transparency cannot be assured.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The proposal also appears reasonably designed to prevent conveyance 
of inside information from the Index Calculator to market participants 
who may trade the Notes.
    In support of this proposal, the Exchange has made the following 
representations:
    (1) NYSE has received a representation from AIG-FP, the Index 
Sponsor, that it will
    (a) Implement and maintain procedures reasonably designed to 
prevent the use and dissemination by relevant employees of AIG-FP, in 
violation of applicable laws, rules and regulations, of material non-
public information relating to changes in the composition or method of 
computation or calculation of the Index and (b) periodically check the 
application of such procedures as they relate to officers and directors 
of AIG-FP directly responsible for such changes.\16\
---------------------------------------------------------------------------

    \16\ AIG-FP is a wholly-owned guaranteed subsidiary of American 
International Group, Inc. It is not a broker-dealer or futures 
commission merchant; however, AIG-FP may have such affiliates. The 
Exchange has stated that Dow Jones does not have any affiliates 
engaged in the securities or commodities trading businesses and, as 
such, Dow Jones does not believe that such firewall procedures are 
necessary in its case. Dow Jones and the Dow Jones--AIG Commodity 
IndexSM Oversight Committee will adopt and maintain 
policies that acknowledge their obligations with respect to material 
non-public information. See supra note 6, 71 FR at 32159-32160 
nn.10,15.
---------------------------------------------------------------------------

    (2) NYSE will, prior to trading the Notes, distribute an 
information memorandum to the membership providing guidance with regard 
to member firm compliance responsibilities (including suitability 
recommendations) when handling transactions in the Notes and 
highlighting the special risks and characteristics of the Notes. In 
addition, during the initial distribution of the Notes and during any 
subsequent distribution of the Notes, NYSE member organizations will 
deliver a prospectus to investors purchasing Notes from distributors.
    (3) NYSE will rely on its existing surveillance procedures 
governing equities with regard to surveillance of the Notes, which are 
adequate to properly monitor trading of the Notes

[[Page 16395]]

and detect violations of Exchange rules, thereby deterring 
manipulation.
    (4) With regard to the Index components, the Exchange can obtain 
market all relevant trading information, including customer identity 
information, with respect to transactions through agreements with 
futures exchanges and participation in the Intermarket Surveillance 
Group.
    (5) NYSE prohibits the initial and/or continued listing of any 
security that is not in compliance with Rule 10A-3 under the Act.\17\
---------------------------------------------------------------------------

    \17\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    This order is conditioned on NYSE's adherence to these 
representations.
    Under the proposal, the Exchange will delist any series of the 
Notes under the following circumstances:
    (1) (a) If, following the initial twelve month period from the date 
of commencement of trading of the Notes, the Notes have more than 60 
days remaining until maturity and there are fewer than 50 beneficial 
holders of the Notes for 30 or more consecutive trading days; (b) if 
fewer than 100,000 Notes remain issued and outstanding; or (c) if the 
market value of all outstanding Notes is less than $1,000,000.
    (2) If the Index value ceases to be calculated or available during 
the time the Notes trade on the Exchange on at least a 15 second basis 
through one or more major market data vendors or the sponsors of the 
Index.
    (3) If, during the time the Notes trade on the Exchange, the 
Indicative Value ceases to be available on a 15 second delayed basis.
    In addition, NYSE has represented that it would delist the Notes 
(unless the Commission approved a proposed rule change submitted 
pursuant to Rule 19b-4 under the Act) if: (1) Dow Jones and AIG-FP 
substantially change either the Index component selection methodology 
or the weighting methodology; (2) a new component is added to the Index 
(or pricing information is used for a new or existing component) that 
constitutes more than 10% of the weight of the Index with whose 
principal trading market the Exchange does not have a comprehensive 
surveillance sharing agreement; or (3) a successor or substitute index 
is used in connection with the Notes. The Commission believes that each 
of these circumstances represents material changes to the 
characteristics of the Index described herein and on which the 
Commission is basing its findings. Under these circumstances, the 
Exchange could not rely on this approval to list and trade the Notes.

Acceleration

    The Commission finds good cause to approve the proposal, as 
amended, prior to the thirtieth day after the amended proposal was 
published for comment in the Federal Register. Accelerating approval of 
the proposal should benefit investors who desire to participate in the 
designated Indexes by expediting the listing and trading of the Notes 
by the Exchange. The Commission also notes that the proposal is similar 
to others previously approved by the Commission, and does not appear to 
raise any new regulatory issues. Thus, the Commission finds good cause, 
consistent with Section 19(b)(2) of the Act,\18\ to grant accelerated 
approval of the proposed rule change, as amended.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSE-2006-71), as modified by 
Amendment No. 1, be, and it hereby is, approved on an accelerated 
basis.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E7-6189 Filed 4-3-07; 8:45 am]
BILLING CODE 8010-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.