Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change Relating to Certain Modifications to the Initial Listing and Trading Standards for Equity Index-Linked Securities, 69271-69272 [E7-23750]

Download as PDF Federal Register / Vol. 72, No. 235 / Friday, December 7, 2007 / Notices 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 such filing also will be available for inspection and copying at the principal office of NSX. 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–NSX–2007–11 and should be submitted on or before December 28, 2007. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23753 Filed 12–6–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION December 3, 2007. pwalker on PROD1PC71 with NOTICES I. Introduction On October 18, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’), filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 VerDate Aug<31>2005 16:30 Dec 06, 2007 Jkt 214001 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 NYSE Arca Equities Rule 5.2(j)(6) defines Equity Index-Linked Securities 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, also referred to as the ‘‘Equity Reference Asset.’’ See NYSE Arca Equities Rule 5.2(j)(6). 4 See Securities Exchange Act Release No. 56696 (October 24, 2007), 72 FR 61927 (‘‘Notice’’). 5 See 17 CFR 240.19b–4(e). Rule 19b–4(e) provides that the listing and trading of a new derivative securities product by a self-regulatory organization (‘‘SRO’’) shall not be deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b–4, if the Commission has approved, pursuant to Section 19(b) of the Act (15 U.S.C. 78s(b)), the SRO’s trading rules, procedures, and listing standards for the product class that would include the new derivative securities product, and the SRO has a surveillance program for such product class. 6 See 17 CFR 242.600(b)(47). NMS stock means any security or class of securities (other than options) for which transaction reports are collected, processed, and made available pursuant to an effective transaction reporting plan. 2 17 Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change Relating to Certain Modifications to the Initial Listing and Trading Standards for Equity Index-Linked Securities CFR 200.30–3(a)(12). II. Description of the Proposal NYSE Arca Equities Rule 5.2(j)(6)(B)(I) currently permits the Exchange to list and trade, pursuant to Rule 19b–4(e) under the Act,5 Equity Index-Linked Securities if, among other requirements, all component securities included in the underlying index are either: (1) Securities (other than foreign country securities and American Depository Receipts (‘‘ADRs’’)) that are (a) issued by a reporting company under the Act that is listed on a national securities exchange and (b) an ‘‘NMS stock,’’ as defined in Rule 600 of Regulation NMS; 6 or (2) foreign country securities or ADRs, subject to certain limitations. The Exchange proposes to amend NYSE Arca Equities Rule 5.2(j)(6)(B)(I) to permit the listing and trading of Equity Index-Linked Securities where the underlying index consists, in whole or in part, of (1) securities of closed-end management investment companies (‘‘Closed-End Fund Securities’’) or (2) investment company units (‘‘ETF Securities’’), which, in each case, are registered under the Investment Company Act of 1940 (the ‘‘1940 Act’’) and listed on a national securities exchange. In its proposal, the Exchange stated its belief that trading in exchange-listed Closed-End Fund Securities and ETF Securities is subject to the same level of 1 15 [Release No. 34–56879; File No. SR– NYSEArca–2007–110] 12 17 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposal to modify certain initial listing and trading standards for Equity IndexLinked Securities.3 The proposed rule change was published for comment in the Federal Register on November 1, 2007.4 The Commission received no comments on the proposal. This order approves the proposed rule change. PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 69271 regulation as trading in exchange-listed equity securities. In addition, the Exchange stated that Closed-End Fund Securities and ETF Securities trade on the same exchange platforms as equity securities registered under the Act and are subject to the same exchange trading rules as equity securities. As such, the Exchange believes that it is appropriate to permit their inclusion as components of indexes underlying Equity IndexLinked Securities. The Exchange also proposes to amend NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(v) to incorporate a limited exception to the requirement that 90% of the index’s numerical value and at least 80% of the total number of component securities underlying an Equity Reference Asset must meet the then current criteria for standardized options trading set forth in NYSE Arca Rule 5.3. The Exchange proposes that an underlying index would not be subject to such requirement if (1) no underlying component security represents more than 10% of the dollar weight of such index, and (2) such index has a minimum of 20 component securities. All of the options exchanges apply the same criteria to securities underlying exchange-traded options.7 These criteria relate primarily to the distribution and trading volume of the securities underlying an option,8 and, as such, the Exchange believes that such criteria are duplicative of the minimum market capitalization and trading volume requirements for securities underlying Equity Index-Linked Securities set forth in NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(i) and (ii), respectively. The Exchange notes that the current requirement of NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(ii), in particular, that relates to minimum trading volume for each component security is more stringent than the trading volume requirement related to options trading.9 Notwithstanding the 7 See, e.g., Rule 1009 of the Philadelphia Stock Exchange, Inc.; Rule 5.3 of the Chicago Board Options Exchange, Incorporated; Rule 5.3 of NYSE Arca; and Rule 502 of the International Securities Exchange, LLC. 8 The rules generally require a minimum of 7,000,000 publicly-held shares, 2,000 holders, a trading volume of at least 2,400,000 shares in the preceding 12 months, and a market price per share of the underlying security of at least $3.00 per share for securities that are ‘‘covered securities,’’ as defined in Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)), and a market price per share of the underlying security of at least $7.50 for securities that are not ‘‘covered securities.’’ See, e.g., NYSE Arca Rule 5.3. 9 NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(ii) requires that each component security must have trading volume in each of the last six months or not less than 1,000,000 shares per month, except that for each of E:\FR\FM\07DEN1.SGM Continued 07DEN1 69272 Federal Register / Vol. 72, No. 235 / Friday, December 7, 2007 / Notices foregoing, while a significant number of listed equity securities meet the minimum market capitalization and trading volume requirements for components of equity indexes under NYSE Arca Equities Rule 5.2(j)(6), the Exchange represents that many do not meet the current criteria for standardized options trading. The Exchange believes that the explicit market capitalization and trading volume requirements of NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(i) and (ii), respectively, are sufficient to ensure that any component security comprising an Equity Reference Asset underlying a series of Equity IndexLinked Securities will have an adequate liquid trading market. In addition, the Exchange believes that, by requiring that both proposed conditions to NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(v) (i.e., enhancing concentration limits for component securities and increasing the minimum number of component securities) be met in order to avail of the proposed exemption to such rule, the proposal would significantly reduce the possibility of manipulation of the index. Based on the foregoing, the Exchange believes that the protection of requiring such securities to be qualified for options trading is unnecessary. III. Commission’s Findings and Order Granting Approval of the Proposed Rule Change pwalker on PROD1PC71 with NOTICES After careful review and based on the Exchange’s representations, 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.10 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act 11 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 the lowest dollar weighted component securities in the index that, in the aggregate, account for no more than 10% of the dollar weight of the index, the trading volume shall be at least 500,000 shares per month in each of the last six months. In contrast, the options criteria for underlying securities generally require a minimum trading volume (in all markets in which the underlying security is traded) of 2,400,000 shares in the preceding twelve months, as stated above. 10 In approving this proposed rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 11 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 16:30 Dec 06, 2007 Jkt 214001 open market and a national market system, and, in general, to protect investors and the public interest. With respect to the proposal to permit the inclusion of Closed-End Fund Securities and ETF Securities in an underlying index of a series of Equity Index-Linked Securities, the Commission notes that issuers of Closed-End Fund Securities and ETF Securities must register under the 1940 Act, and such securities must be listed on a national securities exchange. The Commission also notes that Closed-End Securities and ETF Securities trade on the same platforms as equity securities and are generally subject to the same exchange trading rules as equity securities. In addition, in order for such securities to be included in an underlying index of an issue of Equity Index-Linked Securities, it must be an NMS stock, as defined in Rule 600(b)(47) of Regulation NMS.12 The Commission believes that this proposal should benefit investors by creating additional alternatives to investing in such regulated products and competition in the market for Equity Index-Linked Securities, while maintaining transparency of the underlying components comprising an index. The Commission further believes that the proposal to provide for a limited exception to NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(v) reasonably balances the removal of impediments to a free and open market with the protection of investors and the public interest, two principles set forth in Section 6(b)(5) of the Act. The Commission notes that the minimum trading volume standard relating to the eligibility of securities underlying options overlaps with, and is less stringent than, the equivalent trading volume standards provided in NYSE Arca Equities Rules 5.2(j)(6)(B)(I)(1)(b)(2)(ii) and (iii). Because the overall purpose of the current criteria for standardized options trading is to ensure proper liquidity of the underlying security, the Commission believes that the minimum market value thresholds of NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(i), the minimum trading volume requirements provided in NYSE Arca Equities Rules 5.2(j)(6)(B)(I)(1)(b)(2)(ii) and (iii), together with the enhanced concentration limits and increased minimum number of component securities needed in order to avail of the proposed exemption to NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(v), will help ensure adequate liquidity of 12 See PO 00000 supra note 6. Frm 00092 Fmt 4703 Sfmt 4703 each component comprising an underlying index of Equity IndexLinked Securities. As such, the Commission believes it is reasonable and consistent with the Act for the Exchange to modify the listing standards for Equity Index-Linked Securities in the manner described in the proposal. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,13 that the proposed rule change (SR–NYSEArca– 2007–110), be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23750 Filed 12–6–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56885; File No. SR– NYSEArca–2007–123] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment No. 1 Relating to the Extension of the Pilot Program for Initial and Continued Financial Listing Standards for Common Stock of Operating Companies Until May 31, 2008 December 3, 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 November 29, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 November 30, 2007, the Exchange filed Amendment No. 1 to the proposed rule change.3 The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b–4(f)(6) thereunder,5 which renders 13 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. 3 In Amendment No. 1, the Exchange corrected a typographical error on the proposed Pilot Program (as defined below) extension date and explained the amendment to the Pilot Program. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). 14 17 E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 235 (Friday, December 7, 2007)]
[Notices]
[Pages 69271-69272]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23750]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56879; File No. SR-NYSEArca-2007-110]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of a Proposed Rule Change Relating to Certain Modifications to 
the Initial Listing and Trading Standards for Equity Index-Linked 
Securities

December 3, 2007.

I. Introduction

    On October 18, 2007, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange''), through its wholly owned subsidiary, NYSE Arca Equities, 
Inc. (``NYSE Arca Equities''), filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposal to modify certain initial listing and trading 
standards for Equity Index-Linked Securities.\3\ The proposed rule 
change was published for comment in the Federal Register on November 1, 
2007.\4\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ NYSE Arca Equities Rule 5.2(j)(6) defines Equity Index-
Linked Securities 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, also referred to as the 
``Equity Reference Asset.'' See NYSE Arca Equities Rule 5.2(j)(6).
    \4\ See Securities Exchange Act Release No. 56696 (October 24, 
2007), 72 FR 61927 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    NYSE Arca Equities Rule 5.2(j)(6)(B)(I) currently permits the 
Exchange to list and trade, pursuant to Rule 19b-4(e) under the Act,\5\ 
Equity Index-Linked Securities if, among other requirements, all 
component securities included in the underlying index are either: (1) 
Securities (other than foreign country securities and American 
Depository Receipts (``ADRs'')) that are (a) issued by a reporting 
company under the Act that is listed on a national securities exchange 
and (b) an ``NMS stock,'' as defined in Rule 600 of Regulation NMS; \6\ 
or (2) foreign country securities or ADRs, subject to certain 
limitations. The Exchange proposes to amend NYSE Arca Equities Rule 
5.2(j)(6)(B)(I) to permit the listing and trading of Equity Index-
Linked Securities where the underlying index consists, in whole or in 
part, of (1) securities of closed-end management investment companies 
(``Closed-End Fund Securities'') or (2) investment company units (``ETF 
Securities''), which, in each case, are registered under the Investment 
Company Act of 1940 (the ``1940 Act'') and listed on a national 
securities exchange.
---------------------------------------------------------------------------

    \5\ See 17 CFR 240.19b-4(e). Rule 19b-4(e) provides that the 
listing and trading of a new derivative securities product by a 
self-regulatory organization (``SRO'') shall not be deemed a 
proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, if 
the Commission has approved, pursuant to Section 19(b) of the Act 
(15 U.S.C. 78s(b)), the SRO's trading rules, procedures, and listing 
standards for the product class that would include the new 
derivative securities product, and the SRO has a surveillance 
program for such product class.
    \6\ See 17 CFR 242.600(b)(47). NMS stock means any security or 
class of securities (other than options) for which transaction 
reports are collected, processed, and made available pursuant to an 
effective transaction reporting plan.
---------------------------------------------------------------------------

    In its proposal, the Exchange stated its belief that trading in 
exchange-listed Closed-End Fund Securities and ETF Securities is 
subject to the same level of regulation as trading in exchange-listed 
equity securities. In addition, the Exchange stated that Closed-End 
Fund Securities and ETF Securities trade on the same exchange platforms 
as equity securities registered under the Act and are subject to the 
same exchange trading rules as equity securities. As such, the Exchange 
believes that it is appropriate to permit their inclusion as components 
of indexes underlying Equity Index-Linked Securities.
    The Exchange also proposes to amend NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(2)(v) to incorporate a limited exception to the 
requirement that 90% of the index's numerical value and at least 80% of 
the total number of component securities underlying an Equity Reference 
Asset must meet the then current criteria for standardized options 
trading set forth in NYSE Arca Rule 5.3. The Exchange proposes that an 
underlying index would not be subject to such requirement if (1) no 
underlying component security represents more than 10% of the dollar 
weight of such index, and (2) such index has a minimum of 20 component 
securities.
    All of the options exchanges apply the same criteria to securities 
underlying exchange-traded options.\7\ These criteria relate primarily 
to the distribution and trading volume of the securities underlying an 
option,\8\ and, as such, the Exchange believes that such criteria are 
duplicative of the minimum market capitalization and trading volume 
requirements for securities underlying Equity Index-Linked Securities 
set forth in NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(i) and 
(ii), respectively. The Exchange notes that the current requirement of 
NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(ii), in particular, 
that relates to minimum trading volume for each component security is 
more stringent than the trading volume requirement related to options 
trading.\9\ Notwithstanding the

[[Page 69272]]

foregoing, while a significant number of listed equity securities meet 
the minimum market capitalization and trading volume requirements for 
components of equity indexes under NYSE Arca Equities Rule 5.2(j)(6), 
the Exchange represents that many do not meet the current criteria for 
standardized options trading. The Exchange believes that the explicit 
market capitalization and trading volume requirements of NYSE Arca 
Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(i) and (ii), respectively, are 
sufficient to ensure that any component security comprising an Equity 
Reference Asset underlying a series of Equity Index-Linked Securities 
will have an adequate liquid trading market. In addition, the Exchange 
believes that, by requiring that both proposed conditions to NYSE Arca 
Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(v) (i.e., enhancing 
concentration limits for component securities and increasing the 
minimum number of component securities) be met in order to avail of the 
proposed exemption to such rule, the proposal would significantly 
reduce the possibility of manipulation of the index. Based on the 
foregoing, the Exchange believes that the protection of requiring such 
securities to be qualified for options trading is unnecessary.
---------------------------------------------------------------------------

    \7\ See, e.g., Rule 1009 of the Philadelphia Stock Exchange, 
Inc.; Rule 5.3 of the Chicago Board Options Exchange, Incorporated; 
Rule 5.3 of NYSE Arca; and Rule 502 of the International Securities 
Exchange, LLC.
    \8\ The rules generally require a minimum of 7,000,000 publicly-
held shares, 2,000 holders, a trading volume of at least 2,400,000 
shares in the preceding 12 months, and a market price per share of 
the underlying security of at least $3.00 per share for securities 
that are ``covered securities,'' as defined in Section 18(b)(1) of 
the Securities Act of 1933 (15 U.S.C. 77r(b)(1)), and a market price 
per share of the underlying security of at least $7.50 for 
securities that are not ``covered securities.'' See, e.g., NYSE Arca 
Rule 5.3.
    \9\ NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(2)(ii) 
requires that each component security must have trading volume in 
each of the last six months or not less than 1,000,000 shares per 
month, except that for each of the lowest dollar weighted component 
securities in the index that, in the aggregate, account for no more 
than 10% of the dollar weight of the index, the trading volume shall 
be at least 500,000 shares per month in each of the last six months. 
In contrast, the options criteria for underlying securities 
generally require a minimum trading volume (in all markets in which 
the underlying security is traded) of 2,400,000 shares in the 
preceding twelve months, as stated above.
---------------------------------------------------------------------------

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

    After careful review and based on the Exchange's representations, 
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.\10\ In particular, the 
Commission finds that the proposed rule change is consistent with 
Section 6(b)(5) of the Act \11\ 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.
---------------------------------------------------------------------------

    \10\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    With respect to the proposal to permit the inclusion of Closed-End 
Fund Securities and ETF Securities in an underlying index of a series 
of Equity Index-Linked Securities, the Commission notes that issuers of 
Closed-End Fund Securities and ETF Securities must register under the 
1940 Act, and such securities must be listed on a national securities 
exchange. The Commission also notes that Closed-End Securities and ETF 
Securities trade on the same platforms as equity securities and are 
generally subject to the same exchange trading rules as equity 
securities. In addition, in order for such securities to be included in 
an underlying index of an issue of Equity Index-Linked Securities, it 
must be an NMS stock, as defined in Rule 600(b)(47) of Regulation 
NMS.\12\ The Commission believes that this proposal should benefit 
investors by creating additional alternatives to investing in such 
regulated products and competition in the market for Equity Index-
Linked Securities, while maintaining transparency of the underlying 
components comprising an index.
---------------------------------------------------------------------------

    \12\ See supra note 6.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to provide for a 
limited exception to NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(2)(v) reasonably balances the removal of 
impediments to a free and open market with the protection of investors 
and the public interest, two principles set forth in Section 6(b)(5) of 
the Act. The Commission notes that the minimum trading volume standard 
relating to the eligibility of securities underlying options overlaps 
with, and is less stringent than, the equivalent trading volume 
standards provided in NYSE Arca Equities Rules 
5.2(j)(6)(B)(I)(1)(b)(2)(ii) and (iii). Because the overall purpose of 
the current criteria for standardized options trading is to ensure 
proper liquidity of the underlying security, the Commission believes 
that the minimum market value thresholds of NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(2)(i), the minimum trading volume requirements 
provided in NYSE Arca Equities Rules 5.2(j)(6)(B)(I)(1)(b)(2)(ii) and 
(iii), together with the enhanced concentration limits and increased 
minimum number of component securities needed in order to avail of the 
proposed exemption to NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(2)(v), will help ensure adequate liquidity of 
each component comprising an underlying index of Equity Index-Linked 
Securities. As such, the Commission believes it is reasonable and 
consistent with the Act for the Exchange to modify the listing 
standards for Equity Index-Linked Securities in the manner described in 
the proposal.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-NYSEArca-2007-110), be, and 
it hereby is, approved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-23750 Filed 12-6-07; 8:45 am]
BILLING CODE 8011-01-P

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