Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Closing Auction Time for Exchange Traded Funds, 70366-70367 [E7-23918]

Download as PDF 70366 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices rule change to be effective and operative upon filing with the Commission.16 should be submitted on or before January 2, 2008. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23922 Filed 12–10–07; 8:45 am] Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2007–109 on the subject line. pwalker on PROD1PC71 with NOTICES Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2007–109. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro/shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 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 the NYSE. 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–2007–109 and 16 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 19:12 Dec 10, 2007 Jkt 214001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56888; File No. SR– NYSEArca–2007–124] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Closing Auction Time for Exchange Traded Funds 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 30, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’), 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 NYSE Arca. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. 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 amend NYSE Arca Equities Rule 7.35(e)(3)(E) in order to change the closing auction time for Exchange Traded Funds (‘‘ETFs’’) from 1:15 p.m. Pacific Time (‘‘PT’’) to 1 p.m. PT. The text of the proposed rule change is available at the Exchange’s principal office, the Commission’s Public Reference Room, and http:// www.nysearca.com. 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 15 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Arca Equities Rule 7.35(e)(3)(E) in order to change the closing auction time for Exchange Traded Funds (‘‘ETFs’’) from 1:15 p.m. PT to 1 p.m. PT.5 Presently, closing auctions for ETFs listed on NYSE Arca are conducted at 1:15 p.m. PT. Historically, ETFs were frequently hedged by transactions in futures traded on the Chicago Mercantile Exchange, which closes its equity futures trading session at 1:15 p.m. PT. Certain marketplaces, however, such as the American Stock Exchange (‘‘Amex’’), which previously was the only exchange actively pursuing these listings, does not offer after-hours trading. Instead, conducting the closing auction for ETFs at 1:15 p.m. PT was the means by which Amex accommodated this hedge strategy. Other marketplaces simply followed this arbitrary timing structure, including NYSE Arca. Now, however, there is no longer any meaningful reason for NYSE Arca to conduct its Closing Auctions for ETFs at 1:15 p.m. PT as opposed to 1 p.m. PT for all equities. The historical reasoning is outdated and is not practical for securities listed on NYSE Arca, because it offers no benefit to investors in our marketplace that offers trading in three distinct sessions, one of which extends until 5 p.m. PT. Indeed, the arbitrary time for closing auctions for ETFs may lead to unnecessary confusion. For starters, NYSE Arca offers a Late Trading Session for all equities, including ETFs, from the close of the Core Trading Session until 5 p.m. PT. In addition, fund managers calculate the 5 The Exchange is not proposing to amend the manner in which the closing auction operates, merely the time at which the closing auction for ETFs will occur. See NYSE Arca Equities Rule 7.35(e). E:\FR\FM\11DEN1.SGM 11DEN1 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices daily net asset value (‘‘NAV’’) of ETFs when equity markets close, typically 1 p.m. PT. Since ETFs trade until 1:15 p.m. PT, their closing price, which is the recorded price of the last trade, is often different than its NAV, calculated 15 minutes earlier. By synchronizing the closing auctions for ETFs with the close of the Exchange’s Core Trading Session, an ETF’s closing price will be better aligned with its NAV. The Exchange intends this system change to be effective on filing and operative on January 1, 2008. By amending the time of the Closing Auction for ETFs from 1:15 p.m. PT to 1 p.m. PT, users will benefit from a better alignment of an ETF’s NAV and closing price. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 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. pwalker on PROD1PC71 with NOTICES 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 Because the foregoing proposed rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 19:12 Dec 10, 2007 Jkt 214001 become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b– 4(f)(6) thereunder.9 At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2007–124 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2007–124. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, NYSE Arca has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date on which the Exchange filed the proposed rule change. See 17 CFR 240.19b–4(f)(6)(iii). 9 17 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 70367 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 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–NYSEArca–2007–124 and should be submitted on or before January 2, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23918 Filed 12–10–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56899; File No. SR– NYSEArca–2007–120] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of a Proposed Rule Change Relating to Restrictions on Acting as Market Makers and Floor Broker December 5, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’)1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 27, 2007, the NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend certain Exchange rules to restrict an OTP Holder from concurrently registering as both a Market Maker and a Floor Broker. The text of the proposed rule change is available at the Exchange, at the Commission’s Public Reference Room, and http://www.nyse.com. 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\11DEN1.SGM 11DEN1

Agencies

[Federal Register Volume 72, Number 237 (Tuesday, December 11, 2007)]
[Notices]
[Pages 70366-70367]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23918]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56888; File No. SR-NYSEArca-2007-124]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the 
Closing Auction Time for Exchange Traded Funds

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 30, 2007, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange''), through its wholly owned subsidiary, NYSE Arca Equities, 
Inc. (``NYSE Arca Equities''), 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 NYSE Arca. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders it effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 NYSE Arca Equities Rule 
7.35(e)(3)(E) in order to change the closing auction time for Exchange 
Traded Funds (``ETFs'') from 1:15 p.m. Pacific Time (``PT'') to 1 p.m. 
PT. The text of the proposed rule change is available at the Exchange's 
principal office, the Commission's Public Reference Room, and http://
www.nysearca.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, NYSE Arca 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 those 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 parts of such 
statements.

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

1. Purpose
    The Exchange proposes to amend NYSE Arca Equities Rule 
7.35(e)(3)(E) in order to change the closing auction time for Exchange 
Traded Funds (``ETFs'') from 1:15 p.m. PT to 1 p.m. PT.\5\
---------------------------------------------------------------------------

    \5\ The Exchange is not proposing to amend the manner in which 
the closing auction operates, merely the time at which the closing 
auction for ETFs will occur. See NYSE Arca Equities Rule 7.35(e).
---------------------------------------------------------------------------

    Presently, closing auctions for ETFs listed on NYSE Arca are 
conducted at 1:15 p.m. PT. Historically, ETFs were frequently hedged by 
transactions in futures traded on the Chicago Mercantile Exchange, 
which closes its equity futures trading session at 1:15 p.m. PT. 
Certain marketplaces, however, such as the American Stock Exchange 
(``Amex''), which previously was the only exchange actively pursuing 
these listings, does not offer after-hours trading. Instead, conducting 
the closing auction for ETFs at 1:15 p.m. PT was the means by which 
Amex accommodated this hedge strategy. Other marketplaces simply 
followed this arbitrary timing structure, including NYSE Arca.
    Now, however, there is no longer any meaningful reason for NYSE 
Arca to conduct its Closing Auctions for ETFs at 1:15 p.m. PT as 
opposed to 1 p.m. PT for all equities. The historical reasoning is 
outdated and is not practical for securities listed on NYSE Arca, 
because it offers no benefit to investors in our marketplace that 
offers trading in three distinct sessions, one of which extends until 5 
p.m. PT. Indeed, the arbitrary time for closing auctions for ETFs may 
lead to unnecessary confusion. For starters, NYSE Arca offers a Late 
Trading Session for all equities, including ETFs, from the close of the 
Core Trading Session until 5 p.m. PT. In addition, fund managers 
calculate the

[[Page 70367]]

daily net asset value (``NAV'') of ETFs when equity markets close, 
typically 1 p.m. PT. Since ETFs trade until 1:15 p.m. PT, their closing 
price, which is the recorded price of the last trade, is often 
different than its NAV, calculated 15 minutes earlier. By synchronizing 
the closing auctions for ETFs with the close of the Exchange's Core 
Trading Session, an ETF's closing price will be better aligned with its 
NAV.
    The Exchange intends this system change to be effective on filing 
and operative on January 1, 2008. By amending the time of the Closing 
Auction for ETFs from 1:15 p.m. PT to 1 p.m. PT, users will benefit 
from a better alignment of an ETF's NAV and closing price.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \7\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 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

    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

    Because the foregoing proposed rule change does not: (1) 
Significantly affect the protection of investors or the public 
interest; (2) impose any significant burden on competition; and (3) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, NYSE Arca has given the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date on which the 
Exchange filed the proposed rule change. See 17 CFR 240.19b-
4(f)(6)(iii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in the furtherance of the purposes of the Act.

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2007-124 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2007-124. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room, 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 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-NYSEArca-2007-124 and should 
be submitted on or before January 2, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-23918 Filed 12-10-07; 8:45 am]
BILLING CODE 8011-01-P