Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Listing Standards for Index-Linked Exchangeable Notes in NYSE Arca Equities Rule 5.2(j)(4), 6542-6544 [E8-1961]
Download as PDF
<![CDATA[
6542
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 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, the
proposed rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),14 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. NYSE has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes the waiver
of this period will allow it to continue
the Pilots without undue delay, which
it believes is in the public interest as it
will avoid inconvenience and
interruption to the public. The
Commission believes such waiver is
consistent with the protection of
investors and the public interest
because it presents no new issues and
would allow the Pilots to operate
without interruption. For this reason,
the Commission designates the proposal
to be operative upon filing with the
Commission.15
At any time within 60 days of the
filing of the 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 furtherance of the
purposes of the Act.
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 Rule 19b–4(f)(6) also requires the Exchange to
give 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 of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied the pre-filing requirement.
14 17 CFR 240.19b–4(f)(6)(iii).
15 For purposes only of waiving the 30-day preoperative period, the Commission has considered
the proposed rule’s impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
ebenthall on PRODPC61 with NOTICES
12 17
VerDate Aug<31>2005
15:15 Feb 01, 2008
Jkt 214001
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Nancy M. Morris,
Secretary.
[FR Doc. E8–1879 Filed 2–1–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2008–07 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.
[Release No. 34–57219; File No. SR–
NYSEArca–2008–13]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Listing
Standards for Index-Linked
Exchangeable Notes in NYSE Arca
Equities Rule 5.2(j)(4)
January 29, 2008.
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 January
22, 2008, NYSE Arca, Inc. (‘‘NYSE
All submissions should refer to File
Arca’’ or ‘‘Exchange’’), through its
Number SR–NYSE–2008–07. This file
wholly-owned subsidiary NYSE Arca
number should be included on the
subject line if e-mail is used. To help the Equities, Inc. (‘‘NYSE Arca Equities’’),
filed with the Securities and Exchange
Commission process and review your
Commission (‘‘Commission’’) the
comments more efficiently, please use
only one method. The Commission will proposed rule change as described in
post all comments on the Commission’s Items I, II, and III below, which Items
have been substantially prepared by the
Internet Web site (https://www.sec.gov/
Exchange. The Exchange filed the
rules/sro/shtml). Copies of the
proposal pursuant to section 19(b)(3)(A)
submission, all subsequent
of the Act 3 and Rule 19b–4(f)(6)
amendments, all written statements
thereunder,4 which renders the proposal
with respect to the proposed rule
effective upon filing with the
change that are filed with the
Commission. The Commission is
Commission, and all written
publishing this notice to solicit
communications relating to the
comments on the proposed rule change
proposed rule change between the
from interested persons.
Commission and any person, other than
I. Self-Regulatory Organization’s
those that may be withheld from the
Statement of the Terms of Substance of
public in accordance with the
the Proposed Rule Change
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
The Exchange proposes to amend its
the Commission’s Public Reference
rules governing NYSE Arca, LLC (also
referred to as the ‘‘NYSE Arca
Room, 100 F Street, NE., Washington,
Marketplace’’), which is the equities
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. trading facility of NYSE Arca Equities.
More specifically, the Exchange
Copies of such filing will also be
proposes to amend NYSE Arca Equities
available for inspection and copying at
Rule 5.2(j)(4), the Exchange’s initial
the principal office of the NYSE. All
listing standards for ‘‘Index-Linked
comments received will be posted
Exchangeable Notes.’’ The text of the
without change; the Commission does
proposed rule change is available at the
not edit personal identifying
Exchange, the Commission’s Public
information from submissions. You
Reference Room, and https://
should submit only information that
www.nyse.com.
you wish to make available publicly. All
submissions should refer to File number
16 17 CFR 200.30–3(a)(12).
SR–NYSE–2008–07 and should be
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
submitted on or before February 25,
3 15 U.S.C. 78s(b)(3)(A).
2008.
PO 00000
4 17
Frm 00090
Fmt 4703
Sfmt 4703
E:\FR\FM\04FEN1.SGM
CFR 240.19b–4(f)(6).
04FEN1
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / 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, 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
ebenthall on PRODPC61 with NOTICES
1. Purpose
The Exchange is proposing to amend
NYSE Arca Equities Rule 5.2(j)(4), the
Exchange’s initial listing standards for
‘‘Index-Linked Exchangeable Notes,’’ to
provide for greater flexibility in the
listing criteria for such securities, as set
forth below. The proposed substantive
rule changes herein are based upon the
rules of the American Stock Exchange
LLC (‘‘Amex’’).5 The Commission has
approved similar proposed rule changes
by the Exchange recently.6
Currently, NYSE Arca Equities Rule
5.2(j)(4)(a) provides that an issue of
Index-Linked Exchangeable Notes must
have a minimum public distribution of
150,000 notes with a minimum of 400
public note-holders, except, if traded in
thousand dollar denominations, then no
minimum number of holders. The
Exchange proposes to expand the
exception to provide that, if the notes
are traded in thousand dollar
denominations, then there is also no
minimum public distribution
requirement.7 The Exchange notes that,
without the exception to the 150,000
publicly distributed notes requirement,
5 See Securities Exchange Act Release Nos. 55733
(May 10, 2007), 72 FR 27602 (May 16, 2007) (SR–
Amex–2007–34) (the ‘‘May 2007 Amex Order’’); and
56629 (October 9, 2007), 72 FR 58689 (October 16,
2007) (SR–Amex–2007–87) (the ‘‘October 2007
Amex Order’’). These two orders approved changes
to Section 107A of the Amex Company Guide.
6 See Securities Exchange Act Release Nos. 56924
(December 7, 2007), 72 FR 70918 (December 13,
2007) (SR–NYSEArca–2007–98) (amending NYSE
Arca Equities Rule 5.2(j)(2) (‘‘Equity-Linked
Notes’’)); 56906 (December 5, 2007), 72 FR 70636
(December 12, 2007) (SR–NYSEArca–2007–103)
(amending NYSE Arca Equities Rule 5.2(j)(1)
(‘‘Other Securities’’)); and 56593 (October 1, 2007),
72 FR 57362 (October 9, 2007) (SR–NYSEArca–
2007–96) (amending NYSE Arca Equities Rule
5.2(j)(6) (‘‘Equity Index-Linked Securities,
Commodity-Linked Securities and Currency-Linked
Securities’’)).
7 See the May 2007 Amex Order, supra at note 5.
VerDate Aug<31>2005
15:15 Feb 01, 2008
Jkt 214001
the Exchange would be unable to list
issues in thousand dollar
denominations having a market value of
less than $150 million. The Exchange
believes that the proposed exception is
a reasonable accommodation for those
issuances in $1,000 denominations.
The Exchange proposes to further
amend NYSE Arca Equities Rule
5.2(j)(4)(a) to provide that there are no
minimum public distribution and
holders requirements if the notes are
redeemable at the option of the holders
thereof on at least a weekly basis
(regardless of whether the notes are
traded in thousand dollar
denominations).8 The Exchange believes
that a weekly redemption right will
ensure a strong correlation between the
market price of the notes and the
performance of the underlying index, as
holders will be unlikely to sell their
notes for less than their redemption
value if they have a weekly right to
redeem such notes for their full value.
In addition, in the case of certain notes
with a weekly redemption feature, the
issuer may have the ability to issue new
notes from time to time at market prices
prevailing at the time of sale, at prices
related to market prices, or at negotiated
prices. This provides a ready supply of
new notes, thereby lessening the
possibility that the market price of such
notes will be affected by a scarcity of
available notes for sale. The Exchange
believes that the weekly redemption
right also assists in maintaining a strong
correlation between the market price
and the indicative value of the notes, as
investors will be unlikely to pay more
than the indicative value in the open
market if they can acquire notes from
the issuer at that price.
The Exchange believes that the ability
to list Index-Linked Exchangeable Notes
with these characteristics without any
minimum public distribution or holders
requirements is important to the
successful listing of such notes. Issuers
issuing these types of notes generally do
not intend to do so by way of an
underwritten offering. Rather, the
distribution arrangement is analogous to
that of an exchange-traded fund
issuance, in that the issue is launched
without any significant distribution
event and the float increases over time
as investors purchase additional
securities from the issuer at the then
indicative value. Investors will
generally seek to purchase the notes at
a point when the underlying index is at
6543
a level that they perceive as providing
an attractive growth opportunity. In the
context of such a distribution
arrangement, it is difficult for an issuer
to guarantee its ability to sell a specific
number of units on the listing date.
However, the Exchange believes that
this difficulty in ensuring the sale of
150,000 notes or 400 public holders on
the listing date is not indicative of a
likely long-term lack of liquidity in the
notes or, for the reasons set forth in the
prior paragraph, of a difficulty in
establishing a pricing equilibrium in the
notes or a successful two-sided market.
2. Statutory Basis
The Exchange believes that its
proposal 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 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
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 11 and Rule 19b–
4(f)(6) thereunder.12
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6). The Exchange satisfied
the requirement of this provision that the Exchange
provide the Commission written notice of its intent
to file the proposed rule change, along with a brief
10 15
8 See the May 2007 Amex Order (approving no
minimum holders requirement if there is a weekly
redemption right) and the October 2007 Amex
Order (approving no minimum public distribution
requirement if there is a weekly redemption right),
supra at note 5.
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
E:\FR\FM\04FEN1.SGM
Continued
04FEN1
6544
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay and
make the proposed rule change
operative upon filing because the
proposal raises no novel issues and is
based on a previously approved
proposal filed by NYSE Arca.13 The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest because the Exchange’s
proposed amendment would conform
its listing standards for Index-Linked
Exchangeable Notes with respect to
minimum public holders and public
distribution to be substantively identical
to the parallel listing standards of other
national securities exchanges, which the
Commission has previously approved.
In addition, the Commission notes that
it has also previously approved
substantively identical rules for other
new derivative security products.14 The
Commission further believes that the
proposal should benefit investors by
creating, without undue delay,
additional competition in the market for
Index-Linked Exchangeable Notes. For
these reasons, the Commission
designates the proposed rule change as
operative upon filing.15
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 furtherance of the
purposes of the Act.
IV. Solicitation of Comments
ebenthall on PRODPC61 with NOTICES
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:
description and text of the proposed rule change,
at least five business days prior to filing it.
13 See supra at note 5.
14 See supra at note 6.
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
VerDate Aug<31>2005
15:15 Feb 01, 2008
Jkt 214001
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–NYSEArca–2008–13 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.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57224; File No. SR–Phlx–
2008–03]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to the Listing
Standards for Index-Linked Securities
January 29, 2008.
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 January
24, 2008, the Philadelphia Stock
All submissions should refer to File
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
Number SR–NYSEArca–2008–13. This
filed with the Securities and Exchange
file number should be included on the
subject line if e-mail is used. To help the Commission (‘‘Commission’’) the
proposed rule change as described in
Commission process and review your
Items I, II, and III below, which Items
comments more efficiently, please use
have been substantially prepared by the
only one method. The Commission will
Exchange. Phlx filed the proposal
post all comments on the Commission’s pursuant to section 19(b)(3)(A) of the
Internet Web site (https://www.sec.gov/
Act 3 and Rule 19b–4(f)(6) thereunder,4
rules/sro.shtml). Copies of the
which renders the proposal effective
submission, all subsequent
upon filing with the Commission. The
amendments, all written statements
Commission is publishing this notice to
with respect to the proposed rule
solicit comments on the proposed rule
change that are filed with the
change from interested persons.
Commission, and all written
I. Self-Regulatory Organization’s
communications relating to the
Statement of the Terms of Substance of
proposed rule change between the
the Proposed Rule Change
Commission and any person, other than
The Exchange proposes to amend
those that may be withheld from the
Phlx Rule 803(n)(1) to permit the listing
public in accordance with the
of Index-Linked Securities 5 that do not
provisions of 5 U.S.C. 552, will be
meet the minimum public holders and/
available for inspection and copying in
or public distribution requirements
the Commission’s Public Reference
when such Index-Linked Securities is
Room, 100 F Street, NE., Washington,
redeemable at the option of the holders
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. thereof on at least a weekly basis. The
text of the proposed rule change is
Copies of such filing also will be
available at the Exchange, the
available for inspection and copying at
Commission’s Public Reference Room,
the principal office of the Exchange. All and https://www.phlx.com.
comments received will be posted
II. Self-Regulatory Organization’s
without change; the Commission does
Statement of the Purpose of, and
not edit personal identifying
Statutory Basis for, the Proposed Rule
information from submissions. You
Change
should submit only information that
you wish to make available publicly. All
In its filing with the Commission,
submissions should refer to File
Phlx included statements concerning
the purpose of, and basis for, the
Number SR–NYSEArca–2008–13 and
proposed rule change and discussed any
should be submitted on or before
comments it received on the proposed
February 25, 2008.
rule change. The text of these statements
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1961 Filed 2–1–08; 8:45 am]
BILLING CODE 8011–01–P
16 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00092
Fmt 4703
Sfmt 4703
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 Index-Linked Securities are securities that
provide for the payment at maturity of a cash
amount based on the performance of an underlying
index or indexes. Such securities may or may not
provide for the repayment of the original principal
investment amount. See Phlx Rule 803(n).
2 17
E:\FR\FM\04FEN1.SGM
04FEN1
]]>Agencies
[Federal Register Volume 73, Number 23 (Monday, February 4, 2008)]
[Notices]
[Pages 6542-6544]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1961]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57219; File No. SR-NYSEArca-2008-13]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change Relating To
Listing Standards for Index-Linked Exchangeable Notes in NYSE Arca
Equities Rule 5.2(j)(4)
January 29, 2008.
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 January 22, 2008, 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'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
Exchange. The Exchange filed the proposal pursuant to section
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which
renders the proposal 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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its rules governing NYSE Arca, LLC
(also referred to as the ``NYSE Arca Marketplace''), which is the
equities trading facility of NYSE Arca Equities. More specifically, the
Exchange proposes to amend NYSE Arca Equities Rule 5.2(j)(4), the
Exchange's initial listing standards for ``Index-Linked Exchangeable
Notes.'' The text of the proposed rule change is available at the
Exchange, the Commission's Public Reference Room, and https://
www.nyse.com.
[[Page 6543]]
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 is proposing to amend NYSE Arca Equities Rule
5.2(j)(4), the Exchange's initial listing standards for ``Index-Linked
Exchangeable Notes,'' to provide for greater flexibility in the listing
criteria for such securities, as set forth below. The proposed
substantive rule changes herein are based upon the rules of the
American Stock Exchange LLC (``Amex'').\5\ The Commission has approved
similar proposed rule changes by the Exchange recently.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release Nos. 55733 (May 10,
2007), 72 FR 27602 (May 16, 2007) (SR-Amex-2007-34) (the ``May 2007
Amex Order''); and 56629 (October 9, 2007), 72 FR 58689 (October 16,
2007) (SR-Amex-2007-87) (the ``October 2007 Amex Order''). These two
orders approved changes to Section 107A of the Amex Company Guide.
\6\ See Securities Exchange Act Release Nos. 56924 (December 7,
2007), 72 FR 70918 (December 13, 2007) (SR-NYSEArca-2007-98)
(amending NYSE Arca Equities Rule 5.2(j)(2) (``Equity-Linked
Notes'')); 56906 (December 5, 2007), 72 FR 70636 (December 12, 2007)
(SR-NYSEArca-2007-103) (amending NYSE Arca Equities Rule 5.2(j)(1)
(``Other Securities'')); and 56593 (October 1, 2007), 72 FR 57362
(October 9, 2007) (SR-NYSEArca-2007-96) (amending NYSE Arca Equities
Rule 5.2(j)(6) (``Equity Index-Linked Securities, Commodity-Linked
Securities and Currency-Linked Securities'')).
---------------------------------------------------------------------------
Currently, NYSE Arca Equities Rule 5.2(j)(4)(a) provides that an
issue of Index-Linked Exchangeable Notes must have a minimum public
distribution of 150,000 notes with a minimum of 400 public note-
holders, except, if traded in thousand dollar denominations, then no
minimum number of holders. The Exchange proposes to expand the
exception to provide that, if the notes are traded in thousand dollar
denominations, then there is also no minimum public distribution
requirement.\7\ The Exchange notes that, without the exception to the
150,000 publicly distributed notes requirement, the Exchange would be
unable to list issues in thousand dollar denominations having a market
value of less than $150 million. The Exchange believes that the
proposed exception is a reasonable accommodation for those issuances in
$1,000 denominations.
---------------------------------------------------------------------------
\7\ See the May 2007 Amex Order, supra at note 5.
---------------------------------------------------------------------------
The Exchange proposes to further amend NYSE Arca Equities Rule
5.2(j)(4)(a) to provide that there are no minimum public distribution
and holders requirements if the notes are redeemable at the option of
the holders thereof on at least a weekly basis (regardless of whether
the notes are traded in thousand dollar denominations).\8\ The Exchange
believes that a weekly redemption right will ensure a strong
correlation between the market price of the notes and the performance
of the underlying index, as holders will be unlikely to sell their
notes for less than their redemption value if they have a weekly right
to redeem such notes for their full value. In addition, in the case of
certain notes with a weekly redemption feature, the issuer may have the
ability to issue new notes from time to time at market prices
prevailing at the time of sale, at prices related to market prices, or
at negotiated prices. This provides a ready supply of new notes,
thereby lessening the possibility that the market price of such notes
will be affected by a scarcity of available notes for sale. The
Exchange believes that the weekly redemption right also assists in
maintaining a strong correlation between the market price and the
indicative value of the notes, as investors will be unlikely to pay
more than the indicative value in the open market if they can acquire
notes from the issuer at that price.
---------------------------------------------------------------------------
\8\ See the May 2007 Amex Order (approving no minimum holders
requirement if there is a weekly redemption right) and the October
2007 Amex Order (approving no minimum public distribution
requirement if there is a weekly redemption right), supra at note 5.
---------------------------------------------------------------------------
The Exchange believes that the ability to list Index-Linked
Exchangeable Notes with these characteristics without any minimum
public distribution or holders requirements is important to the
successful listing of such notes. Issuers issuing these types of notes
generally do not intend to do so by way of an underwritten offering.
Rather, the distribution arrangement is analogous to that of an
exchange-traded fund issuance, in that the issue is launched without
any significant distribution event and the float increases over time as
investors purchase additional securities from the issuer at the then
indicative value. Investors will generally seek to purchase the notes
at a point when the underlying index is at a level that they perceive
as providing an attractive growth opportunity. In the context of such a
distribution arrangement, it is difficult for an issuer to guarantee
its ability to sell a specific number of units on the listing date.
However, the Exchange believes that this difficulty in ensuring the
sale of 150,000 notes or 400 public holders on the listing date is not
indicative of a likely long-term lack of liquidity in the notes or, for
the reasons set forth in the prior paragraph, of a difficulty in
establishing a pricing equilibrium in the notes or a successful two-
sided market.
2. Statutory Basis
The Exchange believes that its proposal 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 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
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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). The Exchange satisfied the
requirement of this provision that the Exchange provide 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 filing it.
---------------------------------------------------------------------------
[[Page 6544]]
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay and make the proposed rule change operative
upon filing because the proposal raises no novel issues and is based on
a previously approved proposal filed by NYSE Arca.\13\ The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because the Exchange's
proposed amendment would conform its listing standards for Index-Linked
Exchangeable Notes with respect to minimum public holders and public
distribution to be substantively identical to the parallel listing
standards of other national securities exchanges, which the Commission
has previously approved. In addition, the Commission notes that it has
also previously approved substantively identical rules for other new
derivative security products.\14\ The Commission further believes that
the proposal should benefit investors by creating, without undue delay,
additional competition in the market for Index-Linked Exchangeable
Notes. For these reasons, the Commission designates the proposed rule
change as operative upon filing.\15\
---------------------------------------------------------------------------
\13\ See supra at note 5.
\14\ See supra at note 6.
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2008-13 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-2008-13. 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 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-2008-13 and should
be submitted on or before February 25, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1961 Filed 2-1-08; 8:45 am]
BILLING CODE 8011-01-P
