Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change to Trade Three iPath Exchange-Traded Notes Pursuant to Unlisted Trading Privileges, 28736-28739 [E7-9739]

Download as PDF 28736 Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices jlentini on PROD1PC65 with NOTICES 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–2007–051 and should be submitted on or before June 12, 2007. 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. The Exchange has represented that it meets this requirement because it deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange’s existing rules governing the trading of equity securities. IV. Commission’s Findings and Order The Commission further believes that Granting Accelerated Approval of the the proposal is consistent with Section Proposed Rule Change 11A(a)(1)(C)(iii) of the Act,19 which sets After careful review, the Commission forth Congress’ finding that it is in the finds that the proposed rule change is public interest and appropriate for the consistent with the requirements of the protection of investors and the Act and the rules and regulations maintenance of fair and orderly markets thereunder applicable to a national to assure the availability to brokers, 13 In particular, the securities exchange. dealers, and investors of information Commission finds that the proposed with respect to quotations for and rule change is consistent with Section transactions in securities. Quotations for 6(b)(5) of the Act,14 which requires that and last-sale information regarding the an exchange have rules designed, among Shares are disseminated through the other things, to promote just and facilities of the CTA and the equitable principles of trade, to remove Consolidated Quotation System. impediments to and perfect the Furthermore, the IFV, updated to reflect mechanism of a free and open market changes in currency exchange rates, is and a national market system, and in calculated by Amex and published via general to protect investors and the the facilities of the Consolidated Tape public interest. The Commission Association on a 15-second delayed believes that this proposal should basis throughout the trading hours for benefit investors by increasing the Shares. In addition, if the listing competition among markets that trade market halts trading when the IFV is not the Shares. being calculated or disseminated, the In addition, the Commission finds Exchange would halt trading in the that the proposal is consistent with Section 12(f) of the Act,15 which permits Shares. The Commission notes that, if the an exchange to trade, pursuant to UTP, a security that is listed and registered on Shares should be delisted by the listing exchange, the Exchange would no another exchange.16 The Commission longer have authority to trade the Shares notes that it previously approved the pursuant to this order. listing and trading of the Shares on In support of this proposal, the Amex and the trading of the Shares on Exchange has represented that its NYSE Arca pursuant to UTP.17 The Commission also finds that the proposal surveillance procedures are adequate to properly monitor Exchange trading of is consistent with Rule 12f–5 under the Act,18 which provides that an exchange the Shares. This approval order is conditioned on the Exchange’s shall not extend UTP to a security adherence to this representation. 13 In approving this rule change, the Commission In addition, the Commission recently notes that it has considered the proposal’s impact approved the trading of the Shares on on efficiency, competition, and capital formation. the Exchange pursuant to UTP for a See 15 U.S.C. 78c(f). pilot period of three months.20 In the 14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78l(f). Pilot Order, the Commission noted that 16 Section 12(a) of the Act, 15 U.S.C. 78l(a), exchanges that trade commodity-related generally prohibits a broker-dealer from trading a securities generally have in place security on a national securities exchange unless surveillance arrangements with markets the security is registered on that exchange pursuant that trade the underlying securities. In to Section 12 of the Act. Section 12(f) of the Act its proposal to trade the Shares for a excludes from this restriction trading in any security to which an exchange ‘‘extends UTP.’’ pilot period, the Exchange represented When an exchange extends UTP to a security, it that it was in the process of completing allows its members to trade the security as if it were these surveillance arrangements and listed and registered on the exchange even though it is not so listed and registered. expected to do so ‘‘in the near future.’’ 17 See supra note 4 (approving listing and trading The Exchange recently provided the of Shares on Amex). See also Securities Exchange Commission with evidence that it has Act Release No. 53736 (April 27, 2006) 71 FR 26582 (May 5, 2006) (approving UTP trading of Shares on Pacific Exchange, Inc. n/k/a NYSE Arca). 18 17 CFR 240.12f–5. VerDate Aug<31>2005 18:21 May 21, 2007 Jkt 211001 completed these surveillance arrangements. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the Federal Register. As noted previously, the Commission previously found that the listing and trading of the Shares on Amex and the trading of the Shares on NYSE Arca pursuant to UTP are consistent with the Act. The Commission presently is not aware of any regulatory issue that should cause it to revisit those findings or would preclude the continued trading of the Shares on the Exchange pursuant to UTP. Therefore, accelerating approval of this proposal should benefit investors by continuing the additional competition in the market for the Shares. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,21 that the proposed rule change (SR–NASDAQ– 2007–049), be and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.22 Jill M. Peterson, Assistant Secretary. [FR Doc. E7–9738 Filed 5–21–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55760; File No. SR– NASDAQ–2007–046] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change to Trade Three iPath Exchange-Traded Notes Pursuant to Unlisted Trading Privileges May 15, 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 May 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 21 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 22 17 19 15 U.S.C. 78k–1(a)(1)(C)(iii). supra note 3. 20 See PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 E:\FR\FM\22MYN1.SGM 22MYN1 Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices 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 trade, pursuant to unlisted trading privileges (‘‘UTP’’), index-linked securities (‘‘Securities’’) of Barclays Bank PLC (‘‘Barclays’’) linked to the performance of certain commodities indexes. The specific Securities to be traded are the iPath Exchange-Traded Notes (‘‘GSCI Securities’’) Linked to the Performance of the GSCI Total Return Index (‘‘GSCI Index’’); the iPath Exchange-Traded Notes (‘‘AIG Securities’’) Linked to the Performance of the Dow Jones—AIG Commodity Index Total Return (‘‘AIG Index’’); and the iPath Exchange Traded Notes (‘‘Oil Securities’’) Linked to the Performance of the Goldman Sachs Crude Oil Total Return Index (‘‘Oil Index’’) (the GSCI Index, the AIG Index, and the Oil Index collectively, ‘‘Indexes’’). The text of the proposed rule change is available at Nasdaq, the Commission’s Public Reference Room, and http://nasdaq.complinet.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 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 Pursuant to Rule 4630, Nasdaq proposes to trade the Securities pursuant to UTP. The Securities are currently trading on Nasdaq on a threemonth pilot basis.3 Approval of this filing would allow the Securities to continue to trade after the expiration of the pilot. The Securities are medium-term debt securities of Barclays that provide for a cash payment at maturity or upon earlier exchange at the holder’s option, 3 See Securities Exchange Act Release No. 55386 (March 2, 2007), 72 FR 10801 (March 9, 2007) (SR– NASDAQ–2007–016). VerDate Aug<31>2005 18:21 May 21, 2007 Jkt 211001 28737 a regulatory halt by the listing market. UTP trading in the Securities will also be governed by provisions of Nasdaq Rule 4120 relating to temporary interruptions in the calculation or wide dissemination of the IIV or Indexes. Additionally, Nasdaq may cease trading the Securities 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 would stop trading the Securities if the listing market delists them. Nasdaq believes that its surveillance procedures are adequate to address any concerns about the trading of the Securities on Nasdaq. Trading of the Securities through Nasdaq systems is currently subject to NASD’s surveillance procedures for equity securities in general and index-linked securities in particular.5 Nasdaq is able to obtain information regarding trading in the Securities and the underlying Index components through its members in connection with the proprietary or customer trades that such members effect on any relevant market. In addition, Nasdaq may obtain trading information via the Intermarket Surveillance Group (‘‘ISG’’) from other exchanges who are members or affiliates of the ISG. Finally, Nasdaq is party to Information Sharing Agreements with NYMEX, ICE Futures, the London Metal Exchange, and the Kansas Board of Trade relating to the trading of commodity-based instruments on those markets. In connection with trading the Securities on a pilot basis, Nasdaq has informed its members in an Information Circular of the special characteristics and risks associated with trading the Securities. based on the performance of the applicable Index. The AIG Index is designed to be a diversified benchmark for commodities as an asset class; the AIG Index is currently composed of the prices of 19 exchange-traded futures contracts on physical commodities, namely aluminum, coffee, copper, corn, cotton, crude oil, gold, heating oil, hogs, live cattle, natural gas, nickel, silver, soybeans, soybean oil, sugar, unleaded gasoline, wheat, and zinc. The GSCI Index is also designed as a diversified benchmark for physical commodities as an asset class; the composition of the GSCI is modified on a monthly basis by Goldman, Sachs & Co., its sponsor. The Oil Index is a sub-index of the GSCI Index that reflects a portion of the crude oil component of the GSCI Index (currently the WTI Crude Oil future contract traded on the New York Mercantile Exchange (‘‘NYMEX’’)). The Commission previously approved the original listing and trading of the Securities by the New York Stock Exchange LLC (‘‘NYSE’’).4 Nasdaq deems the Securities to be equity securities, thus rendering trading in the Securities subject to its existing rules governing the trading of equity securities, including Nasdaq Rule 4630, which governs the trading of Commodity-Related Securities such as the Securities. The primary trading hours for the Securities on Nasdaq will be 7 a.m. to 8 p.m. Eastern Time (‘‘ET’’). Quotations for and last-sale information regarding the Securities are disseminated through the Consolidated Quotation System. An ‘‘Intraday Indicative Value’’ (‘‘IIV’’) meant to approximate the intrinsic economic value of the Securities is calculated and published via the facilities of the Consolidated Tape Association every 15 seconds from 9:30 a.m. to 4 p.m. ET on each day on which the Securities are traded on NYSE. Additionally, Barclays or an affiliate calculates and publishes the closing IIV of the Securities on each trading day at http://www.ipathetn.com. The providers of the Indexes disseminate updated Index values approximately every 15 seconds during applicable portions of the trading day and publish a daily Index value between 4 p.m. and 6 p.m. ET, in each case through Reuters. Nasdaq would halt trading in the Securities under the conditions specified in Nasdaq Rules 4120 and 4121. The conditions for a halt include 2. Statutory Basis Nasdaq believes that the proposal is consistent with Section 6(b) of the Act,6 in general, and Section 6(b)(5) of the Act,7 in particular, 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 4 See Securities Exchange Act Release Nos. 53849 (May 22, 2006), 71 FR 30706 (May 30, 2006) (SR– NYSE–2006–20); 53876 (May 25, 2006), 71 FR 32158 (June 2, 2006) (SR–NYSE–2006–16); and 54177 (July 19, 2006), 71 FR 42700 (July 27, 2006) (SR–NYSE–2006–19) (‘‘NYSE Orders’’). 5 NASD surveils trading pursuant to a regulatory services agreement. Nasdaq is responsible for NASD’s performance under this regulatory services agreement. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\22MYN1.SGM 22MYN1 28738 Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices jlentini on PROD1PC65 with NOTICES 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–2007–046 and should be submitted on or before June 12, 2007. 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. The Exchange has represented that it meets this requirement because it B. Self-Regulatory Organization’s deems the Securities to be equity Statement on Burden on Competition securities, thus rendering trading in the Nasdaq does not believe that the Securities subject to the Exchange’s proposed rule change will impose any existing rules governing the trading of burden on competition that is not equity securities. The Commission further believes that necessary or appropriate in furtherance the proposal is consistent with Section of the purposes of the Act. 11A(a)(1)(C)(iii) of the Act,15 which sets C. Self-Regulatory Organization’s forth Congress’ finding that it is in the Statement on Comments on the public interest and appropriate for the IV. Commission’s Findings and Order Proposed Rule Change Received From protection of investors and the Granting Accelerated Approval of the Members, Participants or Others maintenance of fair and orderly markets Proposed Rule Change Written comments on the proposed to assure the availability to brokers, The Commission finds that the rule change were neither solicited nor dealers, and investors of information proposed rule change is consistent with with respect to quotations for and received. the requirements of the Act and the transactions in securities. III. Solicitation of Comments rules and regulations thereunder In support of this proposal, the Interested persons are invited to applicable to a national securities Exchange represents that its submit written data, views, and exchange.9 In particular, the surveillance procedures are adequate to arguments concerning the foregoing, Commission finds that the proposed properly monitor the trading of the including whether the proposed rule rule change is consistent with Section Securities on the Exchange. In addition, change is consistent with the Act. 6(b)(5) of the Act,10 which requires that the Exchange represents that it is party Comments may be submitted by any of an exchange have rules designed, among to Information Sharing Agreements with the following methods: other things, to promote just and NYMEX, ICE Futures, the London Metal equitable principles of trade, to remove Exchange, and the Kansas Board of Electronic Comments impediments to and perfect the Trade relating to the trading of • Use the Commission’s Internet mechanism of a free and open market commodity-based instruments on those comment form (http://www.sec.gov/ and a national market system, and in markets. This approval order is rules/sro.shtml); or general to protect investors and the conditioned on the Exchange’s • Send an e-mail to rulepublic interest. The Commission adherence to these representations. comments@sec.gov. Please include File believes that this proposal should The Commission finds good cause for Number SR–NASDAQ–2007–046 on the benefit investors by increasing approving this proposal before the subject line. competition among markets that trade thirtieth day after the publication of the Securities. notice thereof in the Federal Register. Paper Comments In addition, the Commission finds As noted previously, the Commission • Send paper comments in triplicate that the proposal is consistent with previously found that the listing and to Nancy M. Morris, Secretary, Section 12(f) of the Act,11 which permits trading of the Securities by NYSE is Securities and Exchange Commission, an exchange to trade, pursuant to UTP, consistent with the Act. In addition, the 100 F Street, NE., Washington, DC a security that is listed and registered on Commission previously found that the 20549–1090. another exchange.12 The Commission trading of the Securities by Nasdaq All submissions should refer to File notes that it previously approved the pursuant to UTP on a three-month pilot Number SR–NASDAQ–2007–046. This listing and trading of the Securities on basis was consistent with the Act. The file number should be included on the NYSE.13 The Commission also finds that Commission presently is not aware of subject line if e-mail is used. To help the the proposal is consistent with Rule any regulatory issue that should cause it Commission process and review your 12f–5 under the Act,14 which provides to revisit these earlier findings or would comments more efficiently, please use preclude the trading of the Securities on 9 In approving this rule change, the Commission only one method. The Commission will the Exchange pursuant to UTP. post all comments on the Commission’s notes that it has considered the proposal’s impact Therefore, accelerating approval of this on efficiency, competition, and capital formation. Internet Web site (http://www.sec.gov/ proposed rule change should benefit See 15 U.S.C. 78c(f). rules/sro.shtml). Copies of the 10 15 U.S.C. 78f(b)(5). investors by creating, without undue submission, all subsequent 11 15 U.S.C. 78f(b)(5). delay, additional competition in the 12 Section 12(a) of the Act, 15 U.S.C. 78l(a), amendments, all written statements market for the Securities. For these generally prohibits a broker-dealer from trading a with respect to the proposed rule reasons, the Commission finds good security on a national securities exchange unless change that are filed with the cause to approve the proposal on an the security is registered on that exchange pursuant Commission, and all written accelerated basis. to Section 12 of the Act. Section 12(f) of the Act communications relating to the excludes from this restriction trading in any V. Conclusion security to which an exchange ‘‘extends UTP.’’ proposed rule change between the Commission and any person, other than When an exchange extends UTP to a security, it It is therefore ordered, pursuant to allows its members to trade the security as if it were those that may be withheld from the Section 19(b)(2) of the Act,16 that the listed and registered on the exchange even though public in accordance with the it is not so listed and registered. with Rule 12f-5 under the Act 8 because it deems the Securities to be equity securities, thus rendering trading in the Securities subject to Nasdaq’s existing rules governing the trading of equity securities. 13 See 6 17 VerDate Aug<31>2005 18:21 May 21, 2007 Jkt 211001 15 15 14 17 CFR 240.12f–5. 16 15 PO 00000 NYSE Orders, supra note 4. CFR 240.12f–5. Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\22MYN1.SGM U.S.C. 78k–1(a)(1)(C)(iii). U.S.C. 78s(b)(2). 22MYN1 Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices proposed rule change (SR–NASDAQ– 2007–046), be and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Jill M. Peterson, Assistant Secretary. [FR Doc. E7–9739 Filed 5–21–07; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55761; File No. SR– NASDAQ–2007–045] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment No. 1 Thereto To Trade the United States Oil Fund, LP Pursuant to Unlisted Trading Privileges May 15, 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 April 30, 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. On May 1, 2007, Nasdaq submitted Amendment No. 1 to the proposed rule change. This order provides notice of the proposed rule change as modified by Amendment No. 1 and approves the proposed rule change as amended on an accelerated basis. jlentini on PROD1PC65 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to trade, pursuant to unlisted trading privileged (‘‘UTP’’), units (‘‘Units’’) of the United States Oil Fund, LP (‘‘USOF’’ or ‘‘Partnership’’). The text of the proposed rule change is available at Nasdaq, the Commission’s Public Reference Room, and http:// nasdaq.complinet.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, 17 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 19:44 May 21, 2007 Jkt 211001 the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1. Purpose Nasdaq proposes to trade pursuant to UTP the Units, which represent ownership of a fractional undivided interest in the net assets of USOF.3 The Units are currently trading on Nasdaq on a three-month pilot basis.4 Approval of this filing will allow the Units to continue to trade after the expiration of the pilot. The investment objective of USOF is for its net asset value (‘‘NAV’’) 5 to reflect the performance of the spot price of West Texas Intermediate light, sweet crude oil delivered to Cushing, Oklahoma (the ‘‘WTI light, sweet crude oil’’), as represented by the performance of the price of the ‘‘Benchmark Oil Futures Contract,’’ less the expense of operation of USOF. The ‘‘Benchmark Oil Futures Contract’’ is the near-month (i.e., spot month) futures contract for delivery of WTI light, sweet crude oil traded on the New York Mercantile Exchange (‘‘NYMEX’’).6 The Commission previously approved the original listing and trading of the Units by the American Stock Exchange LLC (‘‘Amex’’).7 Issuances of the Units of USOF are made only in baskets of 100,000 Units or multiples thereof (‘‘Basket’’). A basket would be issued in exchange for Treasuries and/or cash in an amount 3 USOF, a Delaware limited partnership, is a commodity pool. USOF is not an investment company as defined in Section 3(a) of the Investment Company Act of 1940. The offering of the Units of the Partnership is registered with the Commission under the Securities Act of 1933. 4 See Securities Exchange Act Release No. 55386 (March 2, 2007), 72 FR 10801 (March 9, 2007) (SR– NASDAQ–2007–016). 5 NAV is the total assets, less total liabilities, of USOF determined on the basis of generally accepted accounting principles. NAV per Unit is the NAV of USOF divided by the number of outstanding Units. 6 USOF will primarily purchase WTI light, sweet crude Oil Futures Contracts traded on the NYMEX, but may also purchase Oil Futures Contracts on other exchanges, including the Intercontinental Exchange, which operates its futures business through ICE Futures (‘‘ICE Futures’’) and the Singapore Oil Exchange. 7 See Securities Exchange Act Release No. 53582 (March 31, 2006), 71 FR 17510 (April 6, 2006) (SR– Amex–2005–127) (‘‘Amex Order’’). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 28739 equal to the NAV per Unit times 100,000 Units (‘‘Basket Amount’’). An Authorized Purchaser 8 that wishes to purchase a Basket must transfer the Basket Amount to the Administrator (‘‘Deposit Amount’’). An Authorized Purchaser that wishes to redeem a Basket would receive an amount of Treasuries and cash in exchange for each Basket surrendered in an amount equal to the NAV per Basket (‘‘Redemption Amount’’). On each business day, the administrator for USOF makes available, prior to 9:30 a.m. Eastern Time (‘‘ET’’), the estimated Basket Amount for the creation of a Basket based on the prior day’s NAV. According to the Amex Order, Amex disseminates at least every 15 seconds from 9:30 a.m. to 4:15 p.m., via the facilities of the Consolidated Tape Association (‘‘CTA’’), an amount representing, on a per-Unit basis, the current indicative value of the Basket Amount (‘‘Indicative Partnership Value’’).9 Shortly after 4 p.m. ET, the administrator determines the NAV for USOF as described below. At or about 4 p.m. ET on each business day, the administrator determines the Actual Basket Amount for orders placed by Authorized Purchasers received before 12 p.m. ET that day. Quotations for and last-sale information regarding USOF is disseminated through the Consolidated Quotation System. The daily settlement prices for the NYMEX-traded oil futures contracts held by USOF are publicly available on the NYMEX Web site at http://www.nymex.com. Nasdaq’s Web site at http://www.nasdaq.com will include a hyperlink to the NYMEX Web site for the purpose of disclosing futures contract pricing. According to the Amex Order, last-sale information for the Benchmark Oil Futures Contract is updated and disseminated at least every 15 seconds by one or more major market data vendors during the time the Units trade. However, from 2:30 p.m. ET to the opening of NYMEX ACCESS at 3:15 p.m. ET, the pricing for the Benchmark Oil Futures Contract is not updated. 8 An ‘‘Authorized Purchaser’’ is a person who, at the time of submitting to the general partner of USOF an order to create or redeem one or more Baskets, (i) is a registered broker-dealer or other market participant, such as a bank or other financial institution that is exempt from broker-dealer registration; (ii) is a Depository Trust Company Participant; and (iii) has in effect a valid Authorized Purchaser Agreement. 9 The Indicative Partnership Value is calculated based on the Treasuries and cash required for creations and redemptions (i.e., NAV per Unit x 100,000) adjusted to reflect the price changes of the current Benchmark Oil Futures Contract. E:\FR\FM\22MYN1.SGM 22MYN1

Agencies

[Federal Register Volume 72, Number 98 (Tuesday, May 22, 2007)]
[Notices]
[Pages 28736-28739]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-9739]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55760; File No. SR-NASDAQ-2007-046]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change to Trade Three iPath Exchange-Traded Notes Pursuant to 
Unlisted Trading Privileges

May 15, 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 May 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

[[Page 28737]]

proposed rule change and approves the proposal on an accelerated basis.
---------------------------------------------------------------------------

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

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

    Nasdaq proposes to trade, pursuant to unlisted trading privileges 
(``UTP''), index-linked securities (``Securities'') of Barclays Bank 
PLC (``Barclays'') linked to the performance of certain commodities 
indexes. The specific Securities to be traded are the iPath Exchange-
Traded Notes (``GSCI Securities'') Linked to the Performance of the 
GSCI Total Return Index (``GSCI Index''); the iPath Exchange-Traded 
Notes (``AIG Securities'') Linked to the Performance of the Dow Jones--
AIG Commodity Index Total Return (``AIG Index''); and the iPath 
Exchange Traded Notes (``Oil Securities'') Linked to the Performance of 
the Goldman Sachs Crude Oil Total Return Index (``Oil Index'') (the 
GSCI Index, the AIG Index, and the Oil Index collectively, 
``Indexes''). The text of the proposed rule change is available at 
Nasdaq, the Commission's Public Reference Room, and http://
nasdaq.complinet.com.

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

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

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

1. Purpose
    Pursuant to Rule 4630, Nasdaq proposes to trade the Securities 
pursuant to UTP. The Securities are currently trading on Nasdaq on a 
three-month pilot basis.\3\ Approval of this filing would allow the 
Securities to continue to trade after the expiration of the pilot.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 55386 (March 2, 
2007), 72 FR 10801 (March 9, 2007) (SR-NASDAQ-2007-016).
---------------------------------------------------------------------------

    The Securities are medium-term debt securities of Barclays that 
provide for a cash payment at maturity or upon earlier exchange at the 
holder's option, based on the performance of the applicable Index. The 
AIG Index is designed to be a diversified benchmark for commodities as 
an asset class; the AIG Index is currently composed of the prices of 19 
exchange-traded futures contracts on physical commodities, namely 
aluminum, coffee, copper, corn, cotton, crude oil, gold, heating oil, 
hogs, live cattle, natural gas, nickel, silver, soybeans, soybean oil, 
sugar, unleaded gasoline, wheat, and zinc. The GSCI Index is also 
designed as a diversified benchmark for physical commodities as an 
asset class; the composition of the GSCI is modified on a monthly basis 
by Goldman, Sachs & Co., its sponsor. The Oil Index is a sub-index of 
the GSCI Index that reflects a portion of the crude oil component of 
the GSCI Index (currently the WTI Crude Oil future contract traded on 
the New York Mercantile Exchange (``NYMEX'')). The Commission 
previously approved the original listing and trading of the Securities 
by the New York Stock Exchange LLC (``NYSE'').\4\
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    \4\ See Securities Exchange Act Release Nos. 53849 (May 22, 
2006), 71 FR 30706 (May 30, 2006) (SR-NYSE-2006-20); 53876 (May 25, 
2006), 71 FR 32158 (June 2, 2006) (SR-NYSE-2006-16); and 54177 (July 
19, 2006), 71 FR 42700 (July 27, 2006) (SR-NYSE-2006-19) (``NYSE 
Orders'').
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    Nasdaq deems the Securities to be equity securities, thus rendering 
trading in the Securities subject to its existing rules governing the 
trading of equity securities, including Nasdaq Rule 4630, which governs 
the trading of Commodity-Related Securities such as the Securities. The 
primary trading hours for the Securities on Nasdaq will be 7 a.m. to 8 
p.m. Eastern Time (``ET'').
    Quotations for and last-sale information regarding the Securities 
are disseminated through the Consolidated Quotation System. An 
``Intraday Indicative Value'' (``IIV'') meant to approximate the 
intrinsic economic value of the Securities is calculated and published 
via the facilities of the Consolidated Tape Association every 15 
seconds from 9:30 a.m. to 4 p.m. ET on each day on which the Securities 
are traded on NYSE. Additionally, Barclays or an affiliate calculates 
and publishes the closing IIV of the Securities on each trading day at 
http://www.ipathetn.com. The providers of the Indexes disseminate 
updated Index values approximately every 15 seconds during applicable 
portions of the trading day and publish a daily Index value between 4 
p.m. and 6 p.m. ET, in each case through Reuters.
    Nasdaq would halt trading in the Securities 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 
Securities will also be governed by provisions of Nasdaq Rule 4120 
relating to temporary interruptions in the calculation or wide 
dissemination of the IIV or Indexes. Additionally, Nasdaq may cease 
trading the Securities 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 would stop trading the 
Securities if the listing market delists them.
    Nasdaq believes that its surveillance procedures are adequate to 
address any concerns about the trading of the Securities on Nasdaq. 
Trading of the Securities through Nasdaq systems is currently subject 
to NASD's surveillance procedures for equity securities in general and 
index-linked securities in particular.\5\
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    \5\ NASD surveils trading pursuant to a regulatory services 
agreement. Nasdaq is responsible for NASD's performance under this 
regulatory services agreement.
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    Nasdaq is able to obtain information regarding trading in the 
Securities and the underlying Index components through its members in 
connection with the proprietary or customer trades that such members 
effect on any relevant market. In addition, Nasdaq may obtain trading 
information via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members or affiliates of the ISG. Finally, Nasdaq is 
party to Information Sharing Agreements with NYMEX, ICE Futures, the 
London Metal Exchange, and the Kansas Board of Trade relating to the 
trading of commodity-based instruments on those markets. In connection 
with trading the Securities on a pilot basis, Nasdaq has informed its 
members in an Information Circular of the special characteristics and 
risks associated with trading the Securities.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b) 
of the Act,\6\ in general, and Section 6(b)(5) of the Act,\7\ in 
particular, 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

[[Page 28738]]

with Rule 12f-5 under the Act \8\ because it deems the Securities to be 
equity securities, thus rendering trading in the Securities subject to 
Nasdaq's existing rules governing the trading of equity securities.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \6\ 17 CFR 240.12f-5.
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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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2007-046 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-2007-046. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NASDAQ-2007-046 and should be submitted on or before 
June 12, 2007.

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

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\9\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\10\ which requires that an 
exchange have rules designed, among other things, to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and 
in general to protect investors and the public interest. The Commission 
believes that this proposal should benefit investors by increasing 
competition among markets that trade the Securities.
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    \9\ In approving this rule change, the Commission notes that it 
has considered the proposal's impact on efficiency, competition, and 
capital formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    In addition, the Commission finds that the proposal is consistent 
with Section 12(f) of the Act,\11\ which permits an exchange to trade, 
pursuant to UTP, a security that is listed and registered on another 
exchange.\12\ The Commission notes that it previously approved the 
listing and trading of the Securities on NYSE.\13\ The Commission also 
finds that the proposal is consistent with Rule 12f-5 under the 
Act,\14\ which provides that an exchange shall not extend UTP to a 
security unless the exchange has in effect a rule or rules providing 
for transactions in the class or type of security to which the exchange 
extends UTP. The Exchange has represented that it meets this 
requirement because it deems the Securities to be equity securities, 
thus rendering trading in the Securities subject to the Exchange's 
existing rules governing the trading of equity securities.
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    \11\ 15 U.S.C. 78f(b)(5).
    \12\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally 
prohibits a broker-dealer from trading a security on a national 
securities exchange unless the security is registered on that 
exchange pursuant to Section 12 of the Act. Section 12(f) of the Act 
excludes from this restriction trading in any security to which an 
exchange ``extends UTP.'' When an exchange extends UTP to a 
security, it allows its members to trade the security as if it were 
listed and registered on the exchange even though it is not so 
listed and registered.
    \13\ See NYSE Orders, supra note 4.
    \14\ 17 CFR 240.12f-5.
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    The Commission further believes that the proposal is consistent 
with Section 11A(a)(1)(C)(iii) of the Act,\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.
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    \15\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    In support of this proposal, the Exchange represents that its 
surveillance procedures are adequate to properly monitor the trading of 
the Securities on the Exchange. In addition, the Exchange represents 
that it is party to Information Sharing Agreements with NYMEX, ICE 
Futures, the London Metal Exchange, and the Kansas Board of Trade 
relating to the trading of commodity-based instruments on those 
markets. This approval order is conditioned on the Exchange's adherence 
to these representations.
    The Commission finds good cause for approving this proposal before 
the thirtieth day after the publication of notice thereof in the 
Federal Register. As noted previously, the Commission previously found 
that the listing and trading of the Securities by NYSE is consistent 
with the Act. In addition, the Commission previously found that the 
trading of the Securities by Nasdaq pursuant to UTP on a three-month 
pilot basis was consistent with the Act. The Commission presently is 
not aware of any regulatory issue that should cause it to revisit these 
earlier findings or would preclude the trading of the Securities on the 
Exchange pursuant to UTP. Therefore, accelerating approval of this 
proposed rule change should benefit investors by creating, without 
undue delay, additional competition in the market for the Securities. 
For these reasons, the Commission finds good cause to approve the 
proposal on an accelerated basis.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the

[[Page 28739]]

proposed rule change (SR-NASDAQ-2007-046), be and it hereby is, 
approved on an accelerated basis.
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    \16\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
Jill M. Peterson,
Assistant Secretary.
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    \17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E7-9739 Filed 5-21-07; 8:45 am]
BILLING CODE 8010-01-P