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, 6544-6546 [E8-1962]
Download as PDF
<![CDATA[
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
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
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 proposes to amend
Phlx Rule 803(n), the Exchange’s listing
standards for Index-Linked Securities,
to encourage trading of Index-Linked
Securities on the Exchange. The
Commission has recently approved a
similar proposal by NYSE Arca, Inc.
(‘‘NYSE Arca’’).6
Phlx Rule 803(n)(1) generally requires
that each issue of Index-Linked
Securities have at least one million
publicly traded units and that there be
at least 400 public holders, provided,
however, that the minimum public
distribution and public shareholders
requirements do not apply to an issue
traded in thousand dollar
denominations. In addition, Phlx Rule
803(n)(1) provides that the minimum
public shareholders requirement does
not apply if the Index-Linked Securities
are redeemable at the option of the
holders thereof on at least a weekly
basis. The Exchange proposes to add
another exception to the general
requirements of Phlx Rule 803(n)(1)
such that, if an issue of Index-Linked
Securities are redeemable at the option
of the holders thereof on at least a
weekly basis, then both the minimum
public holders and public distribution
requirements would not apply.
The Exchange believes that, where
there is such a weekly redemption right,
the same justification exists for an
exemption from the requirement to have
one million units issued at the time of
listing as applies to the 400 public
holder requirement. The Exchange
believes that a weekly redemption right
will ensure a strong correlation between
the market price of the Index-Linked
Securities and the performance of the
underlying index, as holders will be
unlikely to sell their securities for less
than their redemption value if they have
a weekly right to be redeemed for their
full value. In addition, in the case of
those Index-Linked Securities with a
6 Securities Exchange Act Release No. 56593
(October 1, 2007), 72 FR 57362 (October 9, 2007)
(SR–NYSEArca–2007–96) (providing, among other
things, that, if an issue of Index-Linked Securities
is redeemable at the option of the holders thereof
on at least a weekly basis, both the minimum one
million publicly held trading units and 400
beneficial holders initial distribution requirements
would not apply).
VerDate Aug<31>2005
15:15 Feb 01, 2008
Jkt 214001
weekly redemption feature that are
currently listed on a national securities
exchange, as well as all of those that are
currently proposed to be listed, the
issuer has the ability to issue new
Index-Linked Securities from time to
time at the indicative value at the time
of such sale. The Exchange believes that
this provides a ready supply of new
Index-Linked Securities, thereby
lessening the possibility that the market
price of such securities would be
affected by a scarcity of available IndexLinked Securities for sale. The Exchange
believes that it also assists in
maintaining a strong correlation
between the market price and the
indicative value, as investors will be
unlikely to pay more than the indicative
value in the open market if they can
acquire Index-Linked Securities from
the issuer at that price.
The Exchange believes that the ability
to list Index-Linked Securities with
these characteristics without any
minimum number of units issued or
holders is important to the successful
listing of such securities. Issuers issuing
these types of Index-Linked Securities
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 securities
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 one
million units on the listing date is not
indicative of a likely long-term lack of
liquidity in the securities or, for the
reasons set forth in the prior paragraph,
of a difficulty in establishing a pricing
equilibrium in the securities or a
successful two-sided market.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,7 in general, and furthers the
objectives of Section 6(b)(5), in
particular,8 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
7 15
8 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00093
Fmt 4703
Sfmt 4703
6545
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 states that no written
comments on the proposed rule change
were either solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, 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 9 and Rule
19b–4(f)(6) thereunder.10
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.11 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
Securities with respect to minimum
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with 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 fulfilled this requirement.
11 See supra note 6.
10 17
E:\FR\FM\04FEN1.SGM
04FEN1
6546
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
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.12
In addition, the Commission notes that
it has also previously approved
substantively identical rules for other
new derivative security products.13 The
Commission further believes that the
proposal should benefit investors by
creating, without undue delay,
additional competition in the market for
Index-Linked Securities. For these
reasons, the Commission designates the
proposed rule change as operative upon
filing.14
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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Phlx–2008–03 on the
subject line.
ebenthall on PRODPC61 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–Phlx–2008–03. This file
number should be included on the
subject line if e-mail is used. To help the
12 See, e.g., Section 107(A)(b) of the Company
Guide for the American Stock Exchange LLC
(‘‘Amex’’); Rule 5.2(j)(1)(A) of NYSE Arca Equities,
Inc.; and Section 703.22(B)(1) of the Listed
Company Manual for the New York Stock Exchange
LLC.
13 For example, in addition to applying to IndexLinked Securities, Section 107(A)(b) of the Amex
Company Guide applies to other new derivative
security products such as Index-Linked
Exchangeable Notes.
14 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
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available
for inspection and copying at the
principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–Phlx–2008–03 and should
be submitted on or before February 25,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1962 Filed 2–1–08; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice 6075]
Notice of Meeting of the Cultural
Property Advisory Committee
There will be a meeting of the
Cultural Property Advisory Committee
on Thursday, March 6, 2008, from
approximately 9 a.m. to 5 p.m., and on
Friday, March 7, from approximately 9
a.m. to 3 p.m., at the Department of
State, Annex 44, Room 840, 301 4th St.,
SW., Washington, DC. During its
meeting the Committee will review a
proposal to extend the Memorandum of
Understanding Between the
Government of the United States of
America and the Government of the
Kingdom of Cambodia Concerning the
Imposition of Import Restrictions on
Khmer Archaeological Material
15 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00094
Fmt 4703
Sfmt 4703
(‘‘MOU’’). The Government of the
Kingdom of Cambodia has notified the
Government of the United States of
America of its interest in extending the
MOU.
The Committee’s responsibilities are
carried out in accordance with
provisions of the Convention on
Cultural Property Implementation Act
(19 U.S.C. 2601, et seq.). The text of the
Act and subject MOU, as well as related
information, may be found at https://
exchanges.state.gov/culprop. Portions of
the meeting on March 6 will be closed
pursuant to 5 U.S.C. 552b(c)(9)(B) and
19 U.S.C. 2605(h), the latter of which
stipulates that ‘‘The provisions of the
Federal Advisory Committee Act shall
apply to the Cultural Property Advisory
Committee except that the requirements
of subsections (a) and (b) of section 10
and 11 of such Act (relating to open
meetings, public notice, public
participation, and public availability of
documents) shall not apply to the
Committee, whenever and to the extent
it is determined by the President or his
designee that the disclosure of matters
involved in the Committee’s
proceedings would compromise the
Government’s negotiation objectives or
bargaining positions on the negotiations
of any agreement authorized by this
title.’’ However, on March 6, the
Committee will hold an open session
from approximately 9:30 a.m. to 11 a.m.,
to receive oral public comment on the
proposal to extend. Such an open
session is not a statutory requirement,
nor is the invitation for public oral or
written comment. These steps are taken
at the initiative of the Department of
State. Persons wishing to attend this
open session should notify the Cultural
Heritage Center of the Department of
State at (202) 453–8800 no later than
February 25, 2008, 5 p.m. (EST) to
arrange for admission. Seating is
limited.
Anyone wishing to make an oral
presentation at the public session must
request to be scheduled, and must
submit a written text of the oral
comments by February 25, 2008, to
allow time for distribution to Committee
members prior to the meeting. Oral
comments will be limited to allow time
for questions from members of the
Committee and must specifically relate
to the determinations under Section
303(a)(1) of the Convention on Cultural
Property Implementation Act, 19 U.S.C.
2602, pursuant to which the Committee
must make findings. This citation for
the determinations can be found at the
Web site noted above.
The Committee also invites written
comments and asks that they be
submitted no later than February 25,
E:\FR\FM\04FEN1.SGM
04FEN1
]]>Agencies
[Federal Register Volume 73, Number 23 (Monday, February 4, 2008)]
[Notices]
[Pages 6544-6546]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1962]
-----------------------------------------------------------------------
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 Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
Exchange. Phlx 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 Phlx Rule 803(n)(1) to permit the
listing of Index-Linked Securities \5\ that do not meet the minimum
public holders and/or public distribution requirements when such Index-
Linked Securities is redeemable at the option of the holders thereof on
at least a weekly basis. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
https://www.phlx.com.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Phlx 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
[[Page 6545]]
may be examined at the places specified in Item IV below. The Exchange
has prepared summaries, set forth in sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Phlx Rule 803(n), the Exchange's
listing standards for Index-Linked Securities, to encourage trading of
Index-Linked Securities on the Exchange. The Commission has recently
approved a similar proposal by NYSE Arca, Inc. (``NYSE Arca'').\6\
---------------------------------------------------------------------------
\6\ Securities Exchange Act Release No. 56593 (October 1, 2007),
72 FR 57362 (October 9, 2007) (SR-NYSEArca-2007-96) (providing,
among other things, that, if an issue of Index-Linked Securities is
redeemable at the option of the holders thereof on at least a weekly
basis, both the minimum one million publicly held trading units and
400 beneficial holders initial distribution requirements would not
apply).
---------------------------------------------------------------------------
Phlx Rule 803(n)(1) generally requires that each issue of Index-
Linked Securities have at least one million publicly traded units and
that there be at least 400 public holders, provided, however, that the
minimum public distribution and public shareholders requirements do not
apply to an issue traded in thousand dollar denominations. In addition,
Phlx Rule 803(n)(1) provides that the minimum public shareholders
requirement does not apply if the Index-Linked Securities are
redeemable at the option of the holders thereof on at least a weekly
basis. The Exchange proposes to add another exception to the general
requirements of Phlx Rule 803(n)(1) such that, if an issue of Index-
Linked Securities are redeemable at the option of the holders thereof
on at least a weekly basis, then both the minimum public holders and
public distribution requirements would not apply.
The Exchange believes that, where there is such a weekly redemption
right, the same justification exists for an exemption from the
requirement to have one million units issued at the time of listing as
applies to the 400 public holder requirement. The Exchange believes
that a weekly redemption right will ensure a strong correlation between
the market price of the Index-Linked Securities and the performance of
the underlying index, as holders will be unlikely to sell their
securities for less than their redemption value if they have a weekly
right to be redeemed for their full value. In addition, in the case of
those Index-Linked Securities with a weekly redemption feature that are
currently listed on a national securities exchange, as well as all of
those that are currently proposed to be listed, the issuer has the
ability to issue new Index-Linked Securities from time to time at the
indicative value at the time of such sale. The Exchange believes that
this provides a ready supply of new Index-Linked Securities, thereby
lessening the possibility that the market price of such securities
would be affected by a scarcity of available Index-Linked Securities
for sale. The Exchange believes that it also assists in maintaining a
strong correlation between the market price and the indicative value,
as investors will be unlikely to pay more than the indicative value in
the open market if they can acquire Index-Linked Securities from the
issuer at that price.
The Exchange believes that the ability to list Index-Linked
Securities with these characteristics without any minimum number of
units issued or holders is important to the successful listing of such
securities. Issuers issuing these types of Index-Linked Securities
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
securities 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 one million units on the listing date is not indicative of
a likely long-term lack of liquidity in the securities or, for the
reasons set forth in the prior paragraph, of a difficulty in
establishing a pricing equilibrium in the securities or a successful
two-sided market.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5), in particular,\8\ 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 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 states that no written comments on the proposed rule
change were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with 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 fulfilled this requirement.
---------------------------------------------------------------------------
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.\11\ 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
Securities with respect to minimum
[[Page 6546]]
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.\12\ In addition, the
Commission notes that it has also previously approved substantively
identical rules for other new derivative security products.\13\ The
Commission further believes that the proposal should benefit investors
by creating, without undue delay, additional competition in the market
for Index-Linked Securities. For these reasons, the Commission
designates the proposed rule change as operative upon filing.\14\
---------------------------------------------------------------------------
\11\ See supra note 6.
\12\ See, e.g., Section 107(A)(b) of the Company Guide for the
American Stock Exchange LLC (``Amex''); Rule 5.2(j)(1)(A) of NYSE
Arca Equities, Inc.; and Section 703.22(B)(1) of the Listed Company
Manual for the New York Stock Exchange LLC.
\13\ For example, in addition to applying to Index-Linked
Securities, Section 107(A)(b) of the Amex Company Guide applies to
other new derivative security products such as Index-Linked
Exchangeable Notes.
\14\ 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 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.
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-Phlx-2008-03 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-Phlx-2008-03. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2008-03 and should be
submitted on or before February 25, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1962 Filed 2-1-08; 8:45 am]
BILLING CODE 8011-01-P
