Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating To Requirements for Listing of Commodity-Linked Securities and Currency-Linked Securities, 51285-51287 [E7-17543]
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Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Notices
the principal office of CBOE. 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–CBOE–2007–94 and should
be submitted on or before September 27,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–17572 Filed 9–5–07; 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. 34–56332; File No. SR–NYSE–
2007–76]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change
Relating To Requirements for Listing
of Commodity-Linked Securities and
Currency-Linked Securities
August 29, 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 August
22, 2007, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Section 703.22 of the NYSE Listed
Company Manual (the ‘‘Manual’’),
which permits the listing of commoditylinked securities (‘‘Commodity-Linked
Securities’’) and currency-linked
securities (‘‘Currency-Linked
Securities’’), among other securities.
The text of the proposed rule change is
available at NYSE, the Commission’s
Public Reference Room, and https://
www.nyse.com.
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change 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 IV 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
The Exchange proposes to amend
Section 703.22(B)(II)(1)(b) and Section
703.22(B)(III)(1)(b) of the Manual to
permit the listing and trading of
Commodity-Linked Securities and
Currency-Linked Securities,
respectively, where the underlying
Commodity Reference Asset 3 or
Currency Reference Asset,4 as the case
may be, may include components
representing not more than 10% of the
dollar weight of such Commodity
Reference Asset or Currency Reference
Asset, for which the pricing information
is derived from markets which do not
meet the general requirements of the
respective rule, as described below. In
addition, the Exchange proposes that no
single component of a Commodity
Reference Asset or Currency Reference
Asset, as the case may be, subject to the
foregoing proposed exception may
exceed 7% of the dollar weight of such
Commodity Reference Asset or Currency
Reference Asset.
Under Section 703.22(B)(II)(1) of the
Manual, an issuance of CommodityLinked Securities currently cannot be
listed unless either:
• The Commodity Reference Asset to
which the security is linked shall have
been reviewed and approved for the
trading of Commodity Trust Shares or
options or other derivatives by the
Commission under Section 19(b)(2) 5 of
3 Commodity Reference Asset is defined as one or
more physical commodities or commodity futures,
options or other commodity derivatives or
Commodity Trust Shares (as defined in NYSE Rule
1300B) or a basket or index of any of the foregoing.
See Section 703.22 of the Manual.
4 Currency Reference Asset is defined as one or
more currencies, options or currency futures or
other currency derivatives or Currency Trust Shares
(as defined in NYSE Rule 1300A) or a basket or
index of any of the foregoing. See id.
5 15 U.S.C. 78s(b)(2).
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51285
the Act and rules thereunder and the
conditions set forth in the Commission’s
approval order, including with respect
to comprehensive surveillance sharing
agreements (‘‘CSSAs’’), continue to be
satisfied; or
• The pricing information for each
component of a Commodity Reference
Asset is derived from a market which is
an Intermarket Surveillance Group
(‘‘ISG’’) member or affiliate or with
which the Exchange has a CSSA.
Notwithstanding the previous sentence,
pricing information for gold and silver
may be derived from the London
Bullion Market Association.
Similarly, under Section
703.22(B)(III)(1) of the Manual, an
issuance of Currency-Linked Securities
currently cannot be listed unless either:
• The Currency Reference Asset to
which the security is linked shall have
been reviewed and approved for the
trading of Currency Trust Shares or
options or other derivatives by the
Commission under Section 19(b)(2) of
the Act and rules thereunder and the
conditions set forth in the Commission’s
approval order, including with respect
to CSSAs, continue to be satisfied; or
• The pricing information for each
component of a Currency Reference
Asset must be (1) the generally accepted
spot price for the currency exchange
rate in question or (2) derived from a
market which is (a) an ISG member or
affiliate or with which the Exchange has
a CSSA and (b) the pricing source for
components of a Currency Reference
Asset that has previously been approved
by the Commission.
The Exchange proposes to amend the
requirements as to the source of pricing
information for components of
Commodity-Linked Securities and
Currency-Linked Securities so as to
permit the listing of such securities
where a maximum of 10% of the dollar
weight of the Commodity Reference
Asset or Currency Reference Asset, as
the case may be, is made up of
components that do not meet the
respective general pricing information
requirements. In addition, the Exchange
proposes that no single component
subject to the proposed exception may
exceed 7% of the dollar weight of the
Commodity Reference Asset or Currency
Reference Asset, as the case may be.
The Exchange states that many
commodity and currency markets are
not members or affiliates of ISG, and the
Exchange frequently experiences
difficulty entering into CSSAs with such
markets. The Exchange believes that its
surveillance procedures are not
materially hampered as long as it has
access to trading information of
underlying components that constitute
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Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Notices
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at least 90% of the dollar weight of the
Commodity Reference Asset or Currency
Reference Asset, as the case may be, and
so long as the remaining 10% of the
dollar weight of the Commodity
Reference Asset or Currency Reference
Asset, as the case may be, is comprised
of more than one component. In
addition, with respect to CurrencyLinked Securities, the Exchange
believes that the fact that the pricing
information of a Currency Reference
Asset is not based on the generally
accepted spot price for the relevant
currency or the Commission has not
approved a particular market as a
pricing source for components of a
Currency Reference Asset does not
constitute a material risk to investors
where the pricing information for at
least 90% of the dollar weight of the
Currency Reference Asset is either based
on the generally accepted spot price or
derived from Commission-approved
markets.6
The Exchange believes that the
proposed amendment would provide
the Exchange with greater flexibility to
list securities under Section 703.22 of
the Manual that are linked to a broader
range of underlying assets, thereby
providing issuers with a faster and less
cumbersome means of listing new
Commodity-Linked Securities and
Currency-Linked Securities and
benefiting the investing public. The
Exchange notes that the Commission
has previously approved similar
approaches to the instant proposal,
including another provision in Section
703.22 of the Manual permitting the
listing of Equity Index-Linked
Securities,7 where the underlying equity
index may include foreign country
securities or foreign country securities
underlying American Depositary
Receipts having their primary trading
market outside the United States on
foreign trading markets that are not
members or affiliates of ISG or parties to
CSSAs with the Exchange, as long as
such securities do not, in the aggregate,
represent more than 20% of the dollar
weight of such underlying index.8
6 E-mail from John Carey, Assistant General
Counsel, NYSE Euronext, to Edward Cho, Special
Counsel, Division of Market Regulation,
Commission, dated August 27, 2007 (confirming the
basis of the proposal with respect to CurrencyLinked Securities).
7 Equity Index-Linked Securities are defined as
securities that provide for the payment at maturity
of a cash amount based on the performance of an
underlying index or indexes of equity securities.
See Section 703.22 of the Manual.
8 See Section 703.22(B)(I)(2)(vii) of the Manual.
See also Securities Exchange Act Release Nos.
55687 (May 1, 2007), 72 FR 25824 (May 7, 2007)
(SR–NYSE–2007–27) (approving the generic listing
and trading standards for Index-Linked Securities,
including Equity Index-Linked Securities); and
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,10 in particular, in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. 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 Exchange 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.
The Exchange has requested
accelerated approval of this proposed
rule change prior to the 30th day after
the date of publication of the notice of
the filing thereof. The Commission is
considering granting accelerated
54013 (June 16, 2006), 71 FR 36372 (June 26, 2006)
(SR–NYSE–2006–17) (approving the listing and
trading of shares of the iShares GSCI Commodity
Indexed Trust and providing that if a new
component is added to the underlying index that
constitutes more than 10% of the overall weight of
the index and with whose principal trading market
the Exchange does not have a comprehensive
surveillance sharing agreement, the Exchange
would seek to delist such shares).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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approval of the proposed rule change at
the end of a 15-day comment period.
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–NYSE–2007–76 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2007–76. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the 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–NYSE–2007–76 and should
be submitted on or before September 21,
2007.
E:\FR\FM\06SEN1.SGM
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Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–17543 Filed 9–5–07; 8:45 am]
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
BILLING CODE 8010–01–P
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56337; File No. SR–NYSE–
2007–78]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Institute a
Revised System of Payments to
Specialist Firms
August 29, 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 August
28, 2007, the New York Stock Exchange
LLC (‘‘Exchange’’ or ‘‘NYSE’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to change its
system of payments to specialist firms
by aligning specialist firms’
compensation with their performance.
The text of the proposed rule change is
available on the Exchange’s Web site
(https://www.nyse.com), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
mstockstill on PROD1PC66 with NOTICES
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change. The text of
these statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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On December 1, 2006, the Exchange
instituted a six-month revenue sharing
program for specialist firms 3 in
connection with the adoption of
Exchange Rule 104B, which prohibits
specialist firms from charging
commissions.4 The program was
subsequently extended for an additional
three-month period ending August 31,
2007.5 The Exchange now proposes to
replace the revenue sharing program
with a system that provides variable
payments to specialist firms for
liquidity provision (‘‘Liquidity
Provision Payment’’ or ‘‘LPP’’).
LPPs will be based on two revenue
sources in NYSE-listed securities
(excluding exchange traded funds): (a)
The Exchange’s share of market data
revenue derived from its quoting share;
and (b) the Exchange’s transaction fee
revenue.
a. Share of Market Data Revenue
Derived From Its Quoting Share
Pursuant to Regulation NMS,6 the
Commission revised the formula for the
distribution by the Consolidated Tape
Association (‘‘CTA’’) of market data
quote revenue in NYSE-listed securities
(Network A) among the various markets
(the ‘‘Revenue Allocation Formula’’).
The Revenue Allocation Formula
established a ‘‘Quoting Share’’ to reward
markets that quote at the National Best
Bid and Offer (‘‘NBBO’’).7 The Exchange
3 See Securities Exchange Act Release No. 54856
(December 1, 2006); 71 FR 71215 (December 8,
2006) (SR–NYSE–2006–106).
4 See Securities Exchange Act Release No. 54850
(November 30, 2006); 71 FR 71217 (December 8,
2006) (SR–NYSE–2006–105).
5 See Securities Exchange Act Release No. 55904
(June 13, 2007), 72 FR 34054 (June 20, 2007) (SR–
NYSE–2007–50).
6 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
7 See Regulation NMS Adopting Release at page
37568. Under Regulation NMS, a market’s Quoting
Share in a particular security is equal to: (1) 50%
of the Security Income Allocation for the security,
multiplied by (2) the applicable market’s Quote
Rating in the security. The Security Income
Allocation is the method by which the total
distributable revenues are allocated among the
eligible securities. Revenues are allocated based on
the square root of the dollar volume of trading in
each security, capped at $4 per qualified transaction
report to limit disproportionate allocations for
inactively traded securities. A transaction report
with a dollar volume of $5,000 or more constitutes
one qualified report; transaction reports with dollar
volumes of less than $5,000 are calculated as
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51287
proposes to base a portion of its total
LPP to specialist firms on the actual
revenue associated with its market data
Quoting Share. The Exchange will use
the actual CTA-derived results from the
Revenue Allocation Formula’s Security
Income Allocation and Quoting Share
components and determine its revenue
associated from the Quoting Share on a
symbol-by-symbol basis, which is then
aggregated by specialist firms. The
Exchange will then use the results to
provide each specialist firm with their
quoting component of the LPP payment.
In effect, the Exchange will pass through
to the specialist firm for each security
all of the Quoting Share revenue
associated with that security. The
Exchange believes that this will provide
an additional incentive to the specialist
firms to post quotes more frequently at
the NBBO and also to increase the size
of the quote at the NBBO, as they will
benefit directly from the related increase
in the Exchange’s Quoting Share
revenue. The LPPs are consistent with
the goal of the Revenue Allocation
Formula to reward markets for quoting
at the NBBO and to provide incentives
to specialist firms for displaying
significant liquidity at the best price.
b. Transaction Fee Revenue
The Exchange further proposes to
create a payment pool (the ‘‘LPP Pool’’)
consisting of the Exchange’s NYSElisted stock transaction revenue on
matched volume (excluding crossing
services) in both electronic and
manually executed transactions to
provide LPPs to the specialist firms. The
LPP Pool size has been set at 25% of the
above-noted Exchange transaction
revenue and this percentage may change
if the Exchange adjusts its pricing and/
or based on other conditions such as
specialist performance, including
liquidity-enhancing participation
levels.8 The size of the LPP Pool will
vary month-to-month as Exchange
volume changes. Each individual
specialist firm will be allocated a
proportional fractions of qualified transaction
reports. The Quote Rating represents a market’s
percentage of all best bids and best offers equaling
the NBBO price during the year (‘‘Quote Credits’’).
A market earns one Quote Credit for each second
of time and dollar value of size that the market’s
automated best bid or best offer equals the NBBO
price during regular trading hours without locking
or crossing a previously displayed automated
quotation. To qualify for credits, the quoted price
must be displayed for at least one full second, and
the relevant size is the minimum size that was
displayed during the second. Transactions executed
manually are excluded from the Revenue Allocation
Formula and, thus, the market’s manual quotes will
not be entitled to earn any Quote Credits.
8 The Exchange states that it would file a rule
filing with the Commission pursuant to the Act and
the rules thereunder in relation to any such changes
prior to their implementation.
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]]>Agencies
[Federal Register Volume 72, Number 172 (Thursday, September 6, 2007)]
[Notices]
[Pages 51285-51287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17543]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56332; File No. SR-NYSE-2007-76]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Relating To Requirements for
Listing of Commodity-Linked Securities and Currency-Linked Securities
August 29, 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 August 22, 2007, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section 703.22 of the NYSE Listed
Company Manual (the ``Manual''), which permits the listing of
commodity-linked securities (``Commodity-Linked Securities'') and
currency-linked securities (``Currency-Linked Securities''), among
other securities. The text of the proposed rule change is available at
NYSE, the Commission's Public Reference Room, and https://www.nyse.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 IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Section 703.22(B)(II)(1)(b) and
Section 703.22(B)(III)(1)(b) of the Manual to permit the listing and
trading of Commodity-Linked Securities and Currency-Linked Securities,
respectively, where the underlying Commodity Reference Asset \3\ or
Currency Reference Asset,\4\ as the case may be, may include components
representing not more than 10% of the dollar weight of such Commodity
Reference Asset or Currency Reference Asset, for which the pricing
information is derived from markets which do not meet the general
requirements of the respective rule, as described below. In addition,
the Exchange proposes that no single component of a Commodity Reference
Asset or Currency Reference Asset, as the case may be, subject to the
foregoing proposed exception may exceed 7% of the dollar weight of such
Commodity Reference Asset or Currency Reference Asset.
---------------------------------------------------------------------------
\3\ Commodity Reference Asset is defined as one or more physical
commodities or commodity futures, options or other commodity
derivatives or Commodity Trust Shares (as defined in NYSE Rule
1300B) or a basket or index of any of the foregoing. See Section
703.22 of the Manual.
\4\ Currency Reference Asset is defined as one or more
currencies, options or currency futures or other currency
derivatives or Currency Trust Shares (as defined in NYSE Rule 1300A)
or a basket or index of any of the foregoing. See id.
---------------------------------------------------------------------------
Under Section 703.22(B)(II)(1) of the Manual, an issuance of
Commodity-Linked Securities currently cannot be listed unless either:
The Commodity Reference Asset to which the security is
linked shall have been reviewed and approved for the trading of
Commodity Trust Shares or options or other derivatives by the
Commission under Section 19(b)(2) \5\ of the Act and rules thereunder
and the conditions set forth in the Commission's approval order,
including with respect to comprehensive surveillance sharing agreements
(``CSSAs''), continue to be satisfied; or
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
The pricing information for each component of a Commodity
Reference Asset is derived from a market which is an Intermarket
Surveillance Group (``ISG'') member or affiliate or with which the
Exchange has a CSSA. Notwithstanding the previous sentence, pricing
information for gold and silver may be derived from the London Bullion
Market Association.
Similarly, under Section 703.22(B)(III)(1) of the Manual, an
issuance of Currency-Linked Securities currently cannot be listed
unless either:
The Currency Reference Asset to which the security is
linked shall have been reviewed and approved for the trading of
Currency Trust Shares or options or other derivatives by the Commission
under Section 19(b)(2) of the Act and rules thereunder and the
conditions set forth in the Commission's approval order, including with
respect to CSSAs, continue to be satisfied; or
The pricing information for each component of a Currency
Reference Asset must be (1) the generally accepted spot price for the
currency exchange rate in question or (2) derived from a market which
is (a) an ISG member or affiliate or with which the Exchange has a CSSA
and (b) the pricing source for components of a Currency Reference Asset
that has previously been approved by the Commission.
The Exchange proposes to amend the requirements as to the source of
pricing information for components of Commodity-Linked Securities and
Currency-Linked Securities so as to permit the listing of such
securities where a maximum of 10% of the dollar weight of the Commodity
Reference Asset or Currency Reference Asset, as the case may be, is
made up of components that do not meet the respective general pricing
information requirements. In addition, the Exchange proposes that no
single component subject to the proposed exception may exceed 7% of the
dollar weight of the Commodity Reference Asset or Currency Reference
Asset, as the case may be.
The Exchange states that many commodity and currency markets are
not members or affiliates of ISG, and the Exchange frequently
experiences difficulty entering into CSSAs with such markets. The
Exchange believes that its surveillance procedures are not materially
hampered as long as it has access to trading information of underlying
components that constitute
[[Page 51286]]
at least 90% of the dollar weight of the Commodity Reference Asset or
Currency Reference Asset, as the case may be, and so long as the
remaining 10% of the dollar weight of the Commodity Reference Asset or
Currency Reference Asset, as the case may be, is comprised of more than
one component. In addition, with respect to Currency-Linked Securities,
the Exchange believes that the fact that the pricing information of a
Currency Reference Asset is not based on the generally accepted spot
price for the relevant currency or the Commission has not approved a
particular market as a pricing source for components of a Currency
Reference Asset does not constitute a material risk to investors where
the pricing information for at least 90% of the dollar weight of the
Currency Reference Asset is either based on the generally accepted spot
price or derived from Commission-approved markets.\6\
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\6\ E-mail from John Carey, Assistant General Counsel, NYSE
Euronext, to Edward Cho, Special Counsel, Division of Market
Regulation, Commission, dated August 27, 2007 (confirming the basis
of the proposal with respect to Currency-Linked Securities).
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The Exchange believes that the proposed amendment would provide the
Exchange with greater flexibility to list securities under Section
703.22 of the Manual that are linked to a broader range of underlying
assets, thereby providing issuers with a faster and less cumbersome
means of listing new Commodity-Linked Securities and Currency-Linked
Securities and benefiting the investing public. The Exchange notes that
the Commission has previously approved similar approaches to the
instant proposal, including another provision in Section 703.22 of the
Manual permitting the listing of Equity Index-Linked Securities,\7\
where the underlying equity index may include foreign country
securities or foreign country securities underlying American Depositary
Receipts having their primary trading market outside the United States
on foreign trading markets that are not members or affiliates of ISG or
parties to CSSAs with the Exchange, as long as such securities do not,
in the aggregate, represent more than 20% of the dollar weight of such
underlying index.\8\
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\7\ Equity Index-Linked Securities are defined as securities
that provide for the payment at maturity of a cash amount based on
the performance of an underlying index or indexes of equity
securities. See Section 703.22 of the Manual.
\8\ See Section 703.22(B)(I)(2)(vii) of the Manual. See also
Securities Exchange Act Release Nos. 55687 (May 1, 2007), 72 FR
25824 (May 7, 2007) (SR-NYSE-2007-27) (approving the generic listing
and trading standards for Index-Linked Securities, including Equity
Index-Linked Securities); and 54013 (June 16, 2006), 71 FR 36372
(June 26, 2006) (SR-NYSE-2006-17) (approving the listing and trading
of shares of the iShares GSCI Commodity Indexed Trust and providing
that if a new component is added to the underlying index that
constitutes more than 10% of the overall weight of the index and
with whose principal trading market the Exchange does not have a
comprehensive surveillance sharing agreement, the Exchange would
seek to delist such shares).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. 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 Exchange 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.
The Exchange has requested accelerated approval of this proposed
rule change prior to the 30th day after the date of publication of the
notice of the filing thereof. The Commission is considering granting
accelerated approval of the proposed rule change at the end of a 15-day
comment period.
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 rule-comments@sec.gov. Please include
File Number SR-NYSE-2007-76 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2007-76. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the 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-NYSE-2007-76 and should be
submitted on or before September 21, 2007.
[[Page 51287]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-17543 Filed 9-5-07; 8:45 am]
BILLING CODE 8010-01-P
