Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to the Criteria for Securities That Underlie Options Traded on the Exchange, 51281-51283 [E7-17544]

Download as PDF Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Notices provisions for recapture of any Credit Enhancement under the Contracts does not violate Section 2(a)(32) and 27(i)(2)(A) of the 1940 Act and Rule 22c–1 thereunder. Applicants hereby request that the Commission issue an order pursuant to Section 6(c) of the 1940 Act to exempt the Applicants with respect to (1) the Contracts, (2) Future Accounts that support the Contracts, and (3) Future Underwriters from the provisions of Sections 2(a)(32) and 27(i)(2)(A) of the 1940 Act and Rule 22c–1 thereunder, to the extent necessary to permit the recapture of all or a portion of the Credit Enhancement(s) (previously applied to purchase payments) where the credit was applied and (1) the Contract owner exercises his or her ‘‘free look’’ right, (2) in the event of death within twelve months of the Credit Enhancement being applied (unless the Contract is continued under the surviving spouse benefit continuation option), or (3) partial withdrawal, annuitization, or surrender of the Contract in the first seven Contract Years (pursuant to the Credit Enhancement recapture formula described above). For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–17573 Filed 9–5–07; 8:45 am] mstockstill on PROD1PC66 with NOTICES Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94–409, that the Securities and Exchange Commission will hold the following meeting during the week of September 10, 2007: A Closed Meeting will be held on Monday, September 10, 2007 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters may also be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), (9)(B), and (10) and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Jkt 211001 BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting; Federal Register Citation of Previous Announcement: [to be published] STATUS: Open Meeting. PLACE: 100 F Street, NE., L–002, Auditorium, Washington, DC. SECURITIES AND EXCHANGE COMMISSION 18:25 Sep 05, 2007 August 31, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–17640 Filed 9–5–07; 8:45 am] Sunshine Act Meeting BILLING CODE 8010–01–P VerDate Aug<31>2005 Commissioner Atkins, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the Closed Meeting scheduled for Monday, September 10, 2007 will be: Formal orders of investigations; Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings of an enforcement nature; and Resolution of litigation claims. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. ANNOUNCEMENT OF ADDITIONAL MEETING: Open Meeting. The Commission has scheduled an Open Meeting for Monday, September 10, 2007 at 10 a.m. in the Auditorium, Room L–002. The SEC will hold its second annual Seniors Summit at its headquarters, 100 F Street, NE., Washington DC 20549. The event will further examine how regulators, community organizations, and others can increasingly coordinate efforts to protect older Americans from abusive sales practices and investment fraud. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Dated: August 30, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–17672 Filed 9–5–07; 8:45 am] BILLING CODE 8010–01–P PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 51281 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56336; File No. SR–Amex– 2007–35] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to the Criteria for Securities That Underlie Options Traded on the Exchange 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 April 5, 2007, the American Stock Exchange LLC (‘‘Amex’’ 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 Amex. On August 20, 2007, the Exchange filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to permit the initial and continued listing and trading on the Exchange of options on Index Multiple Exchange Traded Fund Shares (‘‘Multiple Fund Shares’’) and Index Inverse Exchange Traded Fund Shares (‘‘Inverse Fund Shares’’) (collectively, the ‘‘Fund Shares’’). The text of the proposed rule change is available at Amex, the Commission’s Public Reference Room, and www.amex.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 Amex 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 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 superseded and replaced the original filing in its entirety. 2 17 E:\FR\FM\06SEN1.SGM 06SEN1 51282 Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change mstockstill on PROD1PC66 with NOTICES 1. Purpose The purpose of the proposed rule change is to revise Amex Rules 915 and 916 to enable the listing and trading on the Exchange of options on Multiple Fund Shares and Inverse Fund Shares. Multiple Fund Shares seek to provide investment results, before fees and expenses, that correspond to a specified multiple of the percentage performance on a given day of a particular foreign or domestic stock index. Inverse Fund Shares seek to provide investment results, before fees and expenses, that correspond to the inverse (opposite) of the percentage performance on a given day of a particular foreign or domestic stock index by a specified multiple. Multiple and Index Fund Shares differ from traditional exchange-traded fund (‘‘ETFs’’) shares in that they do not merely correspond to the performance of a given index, but rather attempt to match a multiple or inverse of such underlying index performance. Current Multiple Fund Shares trading on the Exchange include the ProShares Ultra Funds while the Index Inverse Fund Shares include the Short Funds and UltraShort Funds.4 In order to achieve investment results that provide either a positive multiple or inverse of the benchmark index, Multiple Fund Shares or Inverse Fund Shares may hold a combination of financial instruments, including, among other things, stock index futures contracts; options on futures; options on securities and indices; equity caps, collars and floors; swap agreements; forward contracts; repurchase agreements; and reverse repurchase agreements (the ‘‘Financial Instruments’’). The underlying portfolios of Multiple Fund Shares generally will hold at least 85% of their 4 See Securities Exchange Act Release Nos. 52553 (October 3, 2005), 70 FR 59100 (October 11, 2005) (SR–Amex–2004–62) (approving the listing and trading of the Ultra Funds and Short Funds) and 54040 (June 23, 2006), 71 FR 37629 (June 30, 2006) (SR–Amex–2006–41) (approving the listing and trading of the UltraShort Funds). The Ultra Funds are expected to gain, on a percentage basis, approximately twice (200%) as much as the underlying benchmark index and should lose approximately twice (200%) as much as the underlying benchmark index when such prices decline. The Short Funds are expected to achieve investment results, before fees and expenses, that correspond to the inverse or opposite of the daily performance (–100%) of an underlying benchmark index. Lastly, the UltraShort Funds are expected to achieve investment results, before fees and expenses that correspond to twice the inverse or opposite of the daily performance (–200%) of the underlying benchmark index. VerDate Aug<31>2005 18:25 Sep 05, 2007 Jkt 211001 assets in the component securities of the underlying relevant benchmark index. The remainder of any assets are devoted to Financial Instruments that are intended to create the additional needed exposure to such Underlying Index necessary to pursue its investment objective. Normally, 100% of the value of the underlying portfolios of Inverse Fund Shares will be devoted to Financial Instruments and money market instruments, including U.S. government securities and repurchase agreements (the ‘‘Money Market Instruments’’). Currently, Commentary .06 to Amex Rule 915 provides securities deemed appropriate for options trading shall include shares or other securities (‘‘Exchange-Traded Fund Shares’’) that are principally traded on a national securities exchange or through the facilities of a national securities association and defined as an ‘‘NMS stock’’ under Rule 600 of Regulation NMS, and that (i) represent an interest in a registered investment company organized as an open-end management investment company, a unit investment trust or a similar entity which holds securities constituting or otherwise based on or representing an investment in an index or portfolio of securities; (ii) represent interest in a trust or other similar entity that holds a specified nonU.S. currency and/or currencies deposited with the trust or similar entity when aggregated in some specified minimum number may be surrendered to the trust by the beneficial owner to receive the specified non-U.S. currency and/or currencies and pays the beneficial owner interest and other distributions on the deposited non-U.S. currency and/or currencies, if any, declared and paid by the trust; or (iii) represent commodity pool interests principally engaged, directly or indirectly, in holding and/or managing portfolios or baskets of securities, commodity futures contracts, options on commodity futures contracts, swaps, forward contracts and/or options on physical commodities and/or non-U.S. currency (‘‘Commodity Pool ETFs’’). The Exchange proposes to amend Commentary .06 to Amex Rule 915 to expand the type of options to include the listing and trading of options based on Multiple Fund Shares and Inverse Fund Shares 5 that may hold or invest in any combination of securities, Financial Instruments and/or Money Market Instruments. Multiple Fund Shares and Inverse Fund Shares will continue to otherwise satisfy the listing standards in Commentary .06 to Amex Rule 915. In 5 See PO 00000 Amex Rule 1000A—AEMI(b)(2). Frm 00071 Fmt 4703 Sfmt 4703 addition, the Exchange proposes to remove the reference to a ‘‘national securities association’’ in Commentary .06 to Amex Rule 915. As set forth in proposed amended Commentary .06 to Amex Rule 915, Multiple Fund Shares and Inverse Fund Shares must be traded on a national securities exchange and must be an ‘‘NMS stock’’ as defined under Rule 600 of Regulation NMS. In addition, Multiple Fund Shares and Inverse Fund Shares must meet either: (i) The criteria and guidelines under Commentary .01 to Amex Rule 915; or (ii) be available for creation or redemption each business day in cash or in kind from the investment company at a price related to net asset value. In addition, the investment company shall provide that shares may be created even though some or all of the securities and/or cash (in lieu of the Financial Instruments) needed to be deposited have not been received by the investment company, provided the authorized creation participant has undertaken to deliver the shares and/or cash as soon as possible and such undertaking has been secured by the delivery and maintenance of collateral consisting of cash or cash equivalents satisfactory to the fund which underlies the option as described in the prospectus. The current continuing or maintenance listing standards for options on Exchange Traded Fund Shares will continue to apply. The Exchange proposes to amend Commentary .07 to Amex Rule 916 to indicate that the index or portfolio may consist of securities, Financial Instruments and/or Money Market Instruments. The Exchange also seeks to delete references to ‘‘national market securities,’’ ‘‘national securities association’’, and ‘‘national market association’’ set forth in Commentary .07 to Amex Rule 916. Under the applicable continued listing criteria in Commentary .07 to Amex Rule 916, options on Fund Shares may be subject to the suspension of opening transactions as follows: (1) Following the initial twelve-month period beginning upon the commencement of trading of the Fund Shares, there are fewer than 50 record and/or beneficial holders of the Fund Shares for 30 or more consecutive trading days; (2) the value of the index, non-U.S. currency, portfolio of commodities including commodity futures contracts, options on commodity futures contracts, swaps, forward contracts and/or options on physical commodities, or portfolio of securities and/or Financial Instruments on which the Fund Shares are based is no longer E:\FR\FM\06SEN1.SGM 06SEN1 Federal Register / Vol. 72, No. 172 / Thursday, September 6, 2007 / Notices mstockstill on PROD1PC66 with NOTICES calculated or available; or (3) such other event occurs or condition exists that in the opinion of the Exchange makes further dealing on the Exchange inadvisable. Additionally, the Fund Shares shall not be deemed to meet the requirements for continued approval, and the Exchange shall not open for trading any additional series of option contracts of the class covering such Multiple Fund Shares or Inverse Fund Shares, if the Shares are halted from trading on their primary market or if the Shares are delisted in accordance with the terms of Amex Rule 916 or the value of the index or portfolio on which the Shares are based is no longer calculated or available. The expansion of the types of investments that may be held by Multiple Fund Shares or Inverse Fund Shares under Commentary .06 to Amex Rule 915 will not have any effect on the rules pertaining to position and exercise limits 6 or margin.7 This proposal is necessary to enable the Exchange to list and trade options on the shares of the Ultra Fund, Short Fund and UltraShort Fund of the ProShares Trust.8 We believe the ability to trade options on Multiple and Inverse Fund Shares will provide investors with greater risk management tools. The proposed amendment to the Exchange’s listing criteria for options on Exchange Traded Fund Shares is necessary to ensure that the Exchange will be able to list options on the Funds of the ProShares Trust as well as other Multiple Fund Shares or Inverse Fund Shares that may be introduced in the future. The Exchange in this proposal also seeks to add ‘‘reverse repurchase agreements’’ within the rule text of Amex Rule 1000A–AEMI(b)(2)(ii) in order to correct the definition of Financial Instruments. The Exchange represents that its existing surveillance procedures applicable to trading in options are adequate to properly monitor the trading in Multiple Fund Shares options and Inverse Fund Shares options. 2. Statutory Basis 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 prevent fraudulent and manipulative acts and practices, to promote just and 6 See Amex Rules 904 and 905. Amex Rule 462. 8 See supra, note 4. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 7 See VerDate Aug<31>2005 18:25 Sep 05, 2007 Jkt 211001 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. 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 Written comments on the proposed rule change 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 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. IV. Solicitation of Comments 51283 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 at 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 No. SR–Amex–2007–35 and should be submitted on or before September 27, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–17544 Filed 9–5–07; 8:45 am] 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: BILLING CODE 8010–01–P Electronic Comments Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the ORS Order Cancellation Fee • Use the Commission’s Internet comment form https://www.sec.gov/ rules/sro.shtml; or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–Amex–2007–35 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–Amex–2007–35. This file number should be included on the subject line if e-mail is used. To help the PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56338; File No. SR–CBOE– 2007–94] 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 1, 2007, the Chicago Board Options Exchange, Incorporated (the ‘‘CBOE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\06SEN1.SGM 06SEN1

Agencies

[Federal Register Volume 72, Number 172 (Thursday, September 6, 2007)]
[Notices]
[Pages 51281-51283]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17544]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56336; File No. SR-Amex-2007-35]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change as Modified by Amendment No. 1 
Thereto Relating to the Criteria for Securities That Underlie Options 
Traded on the Exchange

 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 April 5, 2007, the American Stock Exchange LLC (``Amex'' 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 
Amex. On August 20, 2007, the Exchange filed Amendment No. 1 to the 
proposed rule change.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 superseded and replaced the original filing 
in its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to permit the initial and continued listing 
and trading on the Exchange of options on Index Multiple Exchange 
Traded Fund Shares (``Multiple Fund Shares'') and Index Inverse 
Exchange Traded Fund Shares (``Inverse Fund Shares'') (collectively, 
the ``Fund Shares'').
    The text of the proposed rule change is available at Amex, the 
Commission's Public Reference Room, and www.amex.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 Amex 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.

[[Page 51282]]

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

1. Purpose
    The purpose of the proposed rule change is to revise Amex Rules 915 
and 916 to enable the listing and trading on the Exchange of options on 
Multiple Fund Shares and Inverse Fund Shares. Multiple Fund Shares seek 
to provide investment results, before fees and expenses, that 
correspond to a specified multiple of the percentage performance on a 
given day of a particular foreign or domestic stock index. Inverse Fund 
Shares seek to provide investment results, before fees and expenses, 
that correspond to the inverse (opposite) of the percentage performance 
on a given day of a particular foreign or domestic stock index by a 
specified multiple. Multiple and Index Fund Shares differ from 
traditional exchange-traded fund (``ETFs'') shares in that they do not 
merely correspond to the performance of a given index, but rather 
attempt to match a multiple or inverse of such underlying index 
performance. Current Multiple Fund Shares trading on the Exchange 
include the ProShares Ultra Funds while the Index Inverse Fund Shares 
include the Short Funds and UltraShort Funds.\4\
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    \4\ See Securities Exchange Act Release Nos. 52553 (October 3, 
2005), 70 FR 59100 (October 11, 2005) (SR-Amex-2004-62) (approving 
the listing and trading of the Ultra Funds and Short Funds) and 
54040 (June 23, 2006), 71 FR 37629 (June 30, 2006) (SR-Amex-2006-41) 
(approving the listing and trading of the UltraShort Funds). The 
Ultra Funds are expected to gain, on a percentage basis, 
approximately twice (200%) as much as the underlying benchmark index 
and should lose approximately twice (200%) as much as the underlying 
benchmark index when such prices decline. The Short Funds are 
expected to achieve investment results, before fees and expenses, 
that correspond to the inverse or opposite of the daily performance 
(-100%) of an underlying benchmark index. Lastly, the UltraShort 
Funds are expected to achieve investment results, before fees and 
expenses that correspond to twice the inverse or opposite of the 
daily performance (-200%) of the underlying benchmark index.
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    In order to achieve investment results that provide either a 
positive multiple or inverse of the benchmark index, Multiple Fund 
Shares or Inverse Fund Shares may hold a combination of financial 
instruments, including, among other things, stock index futures 
contracts; options on futures; options on securities and indices; 
equity caps, collars and floors; swap agreements; forward contracts; 
repurchase agreements; and reverse repurchase agreements (the 
``Financial Instruments''). The underlying portfolios of Multiple Fund 
Shares generally will hold at least 85% of their assets in the 
component securities of the underlying relevant benchmark index. The 
remainder of any assets are devoted to Financial Instruments that are 
intended to create the additional needed exposure to such Underlying 
Index necessary to pursue its investment objective. Normally, 100% of 
the value of the underlying portfolios of Inverse Fund Shares will be 
devoted to Financial Instruments and money market instruments, 
including U.S. government securities and repurchase agreements (the 
``Money Market Instruments'').
    Currently, Commentary .06 to Amex Rule 915 provides securities 
deemed appropriate for options trading shall include shares or other 
securities (``Exchange-Traded Fund Shares'') that are principally 
traded on a national securities exchange or through the facilities of a 
national securities association and defined as an ``NMS stock'' under 
Rule 600 of Regulation NMS, and that (i) represent an interest in a 
registered investment company organized as an open-end management 
investment company, a unit investment trust or a similar entity which 
holds securities constituting or otherwise based on or representing an 
investment in an index or portfolio of securities; (ii) represent 
interest in a trust or other similar entity that holds a specified non-
U.S. currency and/or currencies deposited with the trust or similar 
entity when aggregated in some specified minimum number may be 
surrendered to the trust by the beneficial owner to receive the 
specified non-U.S. currency and/or currencies and pays the beneficial 
owner interest and other distributions on the deposited non-U.S. 
currency and/or currencies, if any, declared and paid by the trust; or 
(iii) represent commodity pool interests principally engaged, directly 
or indirectly, in holding and/or managing portfolios or baskets of 
securities, commodity futures contracts, options on commodity futures 
contracts, swaps, forward contracts and/or options on physical 
commodities and/or non-U.S. currency (``Commodity Pool ETFs'').
    The Exchange proposes to amend Commentary .06 to Amex Rule 915 to 
expand the type of options to include the listing and trading of 
options based on Multiple Fund Shares and Inverse Fund Shares \5\ that 
may hold or invest in any combination of securities, Financial 
Instruments and/or Money Market Instruments. Multiple Fund Shares and 
Inverse Fund Shares will continue to otherwise satisfy the listing 
standards in Commentary .06 to Amex Rule 915. In addition, the Exchange 
proposes to remove the reference to a ``national securities 
association'' in Commentary .06 to Amex Rule 915.
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    \5\ See Amex Rule 1000A--AEMI(b)(2).
---------------------------------------------------------------------------

    As set forth in proposed amended Commentary .06 to Amex Rule 915, 
Multiple Fund Shares and Inverse Fund Shares must be traded on a 
national securities exchange and must be an ``NMS stock'' as defined 
under Rule 600 of Regulation NMS. In addition, Multiple Fund Shares and 
Inverse Fund Shares must meet either: (i) The criteria and guidelines 
under Commentary .01 to Amex Rule 915; or (ii) be available for 
creation or redemption each business day in cash or in kind from the 
investment company at a price related to net asset value. In addition, 
the investment company shall provide that shares may be created even 
though some or all of the securities and/or cash (in lieu of the 
Financial Instruments) needed to be deposited have not been received by 
the investment company, provided the authorized creation participant 
has undertaken to deliver the shares and/or cash as soon as possible 
and such undertaking has been secured by the delivery and maintenance 
of collateral consisting of cash or cash equivalents satisfactory to 
the fund which underlies the option as described in the prospectus.
    The current continuing or maintenance listing standards for options 
on Exchange Traded Fund Shares will continue to apply.
    The Exchange proposes to amend Commentary .07 to Amex Rule 916 to 
indicate that the index or portfolio may consist of securities, 
Financial Instruments and/or Money Market Instruments. The Exchange 
also seeks to delete references to ``national market securities,'' 
``national securities association'', and ``national market 
association'' set forth in Commentary .07 to Amex Rule 916.
    Under the applicable continued listing criteria in Commentary .07 
to Amex Rule 916, options on Fund Shares may be subject to the 
suspension of opening transactions as follows: (1) Following the 
initial twelve-month period beginning upon the commencement of trading 
of the Fund Shares, there are fewer than 50 record and/or beneficial 
holders of the Fund Shares for 30 or more consecutive trading days; (2) 
the value of the index, non-U.S. currency, portfolio of commodities 
including commodity futures contracts, options on commodity futures 
contracts, swaps, forward contracts and/or options on physical 
commodities, or portfolio of securities and/or Financial Instruments on 
which the Fund Shares are based is no longer

[[Page 51283]]

calculated or available; or (3) such other event occurs or condition 
exists that in the opinion of the Exchange makes further dealing on the 
Exchange inadvisable. Additionally, the Fund Shares shall not be deemed 
to meet the requirements for continued approval, and the Exchange shall 
not open for trading any additional series of option contracts of the 
class covering such Multiple Fund Shares or Inverse Fund Shares, if the 
Shares are halted from trading on their primary market or if the Shares 
are delisted in accordance with the terms of Amex Rule 916 or the value 
of the index or portfolio on which the Shares are based is no longer 
calculated or available.
    The expansion of the types of investments that may be held by 
Multiple Fund Shares or Inverse Fund Shares under Commentary .06 to 
Amex Rule 915 will not have any effect on the rules pertaining to 
position and exercise limits \6\ or margin.\7\
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    \6\ See Amex Rules 904 and 905.
    \7\ See Amex Rule 462.
---------------------------------------------------------------------------

    This proposal is necessary to enable the Exchange to list and trade 
options on the shares of the Ultra Fund, Short Fund and UltraShort Fund 
of the ProShares Trust.\8\ We believe the ability to trade options on 
Multiple and Inverse Fund Shares will provide investors with greater 
risk management tools. The proposed amendment to the Exchange's listing 
criteria for options on Exchange Traded Fund Shares is necessary to 
ensure that the Exchange will be able to list options on the Funds of 
the ProShares Trust as well as other Multiple Fund Shares or Inverse 
Fund Shares that may be introduced in the future.
---------------------------------------------------------------------------

    \8\ See supra, note 4.
---------------------------------------------------------------------------

    The Exchange in this proposal also seeks to add ``reverse 
repurchase agreements'' within the rule text of Amex Rule 1000A-
AEMI(b)(2)(ii) in order to correct the definition of Financial 
Instruments.
    The Exchange represents that its existing surveillance procedures 
applicable to trading in options are adequate to properly monitor the 
trading in Multiple Fund Shares options and Inverse Fund Shares 
options.
2. Statutory Basis
    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 prevent 
fraudulent and manipulative acts and practices, 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    Written comments on the proposed rule change 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 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.

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 No. SR-Amex-2007-35 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-Amex-2007-35. 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 at 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 No. SR-Amex-2007-35 and should be 
submitted on or before September 27, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E7-17544 Filed 9-5-07; 8:45 am]
BILLING CODE 8010-01-P
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