Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Consolidating into a Single Rule Certain Requirements for Products Traded on the Exchange Pursuant to Unlisted Trading Privileges, 13597-13599 [E8-4969]
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Federal Register / Vol. 73, No. 50 / Thursday, March 13, 2008 / Notices
Nasdaq Rule 4613(a)(2) that allows
market makers and ECNs to obtain
supplemental MPIDs. The rule has
operated as a temporary pilot since it
was first adopted in June 2003 and since
that time, Nasdaq continued to apply
the procedures set forth in the rule and
the related interpretive material.4 In
accordance with the pilot program,
market makers and ECNs can be issued
a maximum of nine supplemental
MPIDs. Nasdaq proposes to remove the
current restriction that limits the
number of supplemental MPIDs that
market makers and ECNs can request for
displaying attributable quotes or orders.
In addition, Nasdaq proposes to remove
IM–4613, which sets forth the
procedures for allocating supplemental
MPIDs.
Nasdaq’s proposal will prohibit
market makers and ECNs from using a
supplemental MPID to violate Exchange
or Commission rules.5 If it is
determined that a supplemental MPID is
being used improperly, Nasdaq will
withdraw its grant of the supplemental
MPID for all purposes for all securities.
In addition, if a market maker or ECN
fails to fulfill the conditions
appurtenant to its primary MPID (e.g.,
by being placed into an unexcused
withdrawal), it will not be permitted to
use any supplemental MPID for any
purpose in that security.
III. Discussion and Commission
Findings
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder that
are applicable to a national securities
exchange.6 In particular, the
Commission believes that the proposed
rule change is consistent with Section
6(b)(5) of the Act,7 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
mstockstill on PROD1PC66 with NOTICES
4 See
Securities Exchange Act Release No. 47954
(May 30, 2003), 68 FR 34017 (June 6, 2003). See also
IM–4613—Procedures for Allocation of Second
Displayable MPIDs. According to Nasdaq, the pilot
inadvertently was permitted to lapse on November
30, 2006.
5 Members will be prohibited from using a
supplemental MPID to avoid their Manning
obligations under IM–2110–2, best execution
obligations under Nasdaq Rule 2320, or their
obligations under the Commission’s Order Handling
Rules. Members will be required to continue to
comply with the firm quote rule, the OATS rules,
and the Commission’s order routing and execution
quality disclosure rules. See Notice, supra note 3,
at 6229–30.
6 In approving this rule, the Commission notes
that it has considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
7 15 U.S.C. 78f(b)(5).
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16:19 Mar 12, 2008
Jkt 214001
system, and, in general, to protect
investors and the public interest.
The Commission believes that the
proposal to make permanent the pilot
program that allows market makers and
ECNs to obtain supplemental MPIDs is
consistent with the Act. The proposal
should provide market participants with
flexibility to organize diverse order
flows from customers and to route
orders from different trading desks and
units within their organizations.
The Exchange also proposes to
remove any restrictions on the number
of MPIDs a market participant may
request for displaying attributable
quotes or orders. According to Nasdaq,
this restriction was adopted due to
technological limitations. The Exchange
has represented that this technological
limitation no longer exists.8 In addition,
Nasdaq proposes to remove IM–4613,
which sets forth the procedures for
allocating supplemental MPIDs. This
method of allocating supplemental
MPIDs was necessary due to the limited
number of available MPIDs. The
removal of Nasdaq’s technological
limitation on the number of MPIDs for
a given security makes the procedures
unnecessary.
The Commission notes that Nasdaq
represents that a supplemental MPID
would be withdrawn for all purposes
and for all securities if it were to be
determined that such supplemental
MPID was being used improperly.9 In
addition, Nasdaq represents that a
market maker or ECN will be prohibited
from using any supplemental MPID for
any purpose in a security, if it fails to
fulfill the conditions appurtenant to its
primary MPID for such security.10 In the
Commission’s view, these procedures
should ensure that market makers and
ECNs utilize MPIDs in accordance with
Exchange rules.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,11 that the
proposed rule change (SR–NASDAQ–
2008–004) be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–4984 Filed 3–12–08; 8:45 am]
BILLING CODE 8011–01–P
8 See
9 See
Notice, supra note 3, at 6229.
Notice, supra note 3, at 6230.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57448; File No. SR–NSX–
2008–05]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Order Granting
Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1 Thereto,
Consolidating into a Single Rule
Certain Requirements for Products
Traded on the Exchange Pursuant to
Unlisted Trading Privileges
March 6, 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 March 6,
2008, the National Stock Exchange, Inc.
(‘‘Exchange’’ or ‘‘NSX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the Exchange.
On March 6, 2008, the Exchange filed
Amendment No. 1 to the proposed rule
change. This order provides notice of
the proposed rule change, as amended,
and approves the proposal on an
accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
rules to consolidate into a single rule
certain requirements for products traded
on the Exchange pursuant to unlisted
trading privileges (‘‘UTP’’) that have
been established in various new
products proposals previously approved
by the Commission. The text of the
proposed rule change is available at the
Exchange’s principal office, on the
Exchange’s Web site (https://
www.nsx.com) and at the Commission’s
Public Reference Room.
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 III below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
10 Id.
11 15
12 17
PO 00000
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
Frm 00074
Fmt 4703
Sfmt 4703
13597
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 73, No. 50 / Thursday, March 13, 2008 / Notices
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 its
rules to consolidate into a single rule
certain requirements for products traded
on the Exchange pursuant to unlisted
trading privileges (‘‘UTP’’) that have
been established in various new
products proposals previously approved
by the Commission. The Exchange
proposes to amend NSX Rule 15.9 to set
forth rules regarding the extension of
UTP to a security that is listed on
another national securities exchange.
Any such security will be subject to all
Exchange trading rules applicable to
equity securities, unless otherwise
noted. The Exchange will file with the
Commission a Form 19b–4(e) with
respect to any such security that is a
‘‘new derivative securities product’’ as
defined in Rule 19b–4(e) under the Act.3
In addition, any new derivative
securities product traded on the
Exchange pursuant to proposed NSX
Rule 15.9 will be subject to the
following criteria.
Proposed NSX Rule 15.9B(2) provides
that the Exchange will distribute an
information circular prior to the
commencement of trading in such new
derivative securities product which
generally will include the same
information as the information circular
provided by the listing exchange,
including: (1) The special risks of
trading the new derivative securities
product, including NSX Rule 3.7; 4 (2)
the Exchange’s rules that will apply to
the new derivative securities product,
including the suitability rule; (3)
information about the dissemination of
value of the underlying assets or
indexes; and (4) the risk of trading
during irregular trading hours due to the
lack of calculation or dissemination of
the intraday indicative value (‘‘Intraday
Indicative Value’’) or a similar value.5
Proposed NSX Rule 15.9(B)(3)
reminds ETP Holders 6 that they are
subject to the prospectus delivery
3 17
CFR 240.19b–4(e).
Rule 3.7 requires the ETP Holder to have
reasonable grounds to believe that a
recommendation made by the ETP Holder is
suitable for the customer.
5 NSX’s pre-market session is from 8 a.m. until
9:29:59 a.m. Eastern Time and NSX’s post-market
session is from 4:00:01 p.m. to 6:30 p.m. Eastern
Time.
6 An ETP Holder is a registered broker or dealer
that has been issued an Equity Trading Permit
(‘‘ETP’’) by NSX.
mstockstill on PROD1PC66 with NOTICES
4 NSX
VerDate Aug<31>2005
16:19 Mar 12, 2008
Jkt 214001
requirements under the Securities Act of
1933, as amended (‘‘Securities Act’’),
unless the new derivative securities
product is the subject of an order by the
Commission exempting the product
from certain prospectus delivery
requirements under Section 24(d) of the
Investment Company Act of 1940
(‘‘1940 Act’’) and the product is not
otherwise subject to prospectus delivery
requirements under the Securities Act.
The Exchange will inform its ETP
Holders regarding the application of the
provisions of this subparagraph to a
particular series of exchange-traded
funds governed by the 1940 Act by
means of an information circular. This
section also includes a definition of the
term exchange-traded fund.
Proposed NSX Rule 15.9B(4)
addresses trading halts in the new
derivative securities products traded on
the Exchange pursuant to UTP.
Proposed NSX Rule 15.9B(4) provides
that the Exchange, upon notification by
the listing market of a halt due to a
temporary interruption in the
calculation or wide dissemination of the
Intraday Indicative Value (or a similar
value) or the value of the underlying
index or instrument, will immediately
halt trading in that product on the
Exchange. If the Intraday Indicative
Value (or a similar value) or the value
of the underlying index or instrument
continues not to be calculated or widely
available as of trading on the Exchange
on the next business day, the Exchange
shall not commence trading of the
product that day. If an interruption in
the calculation or wide dissemination of
the Intraday Indicative Value (or a
similar value) or the value of the
underlying index or instrument
continues, the Exchange may resume
trading in the product only if
calculation and wide dissemination of
the Intraday Indicative Value (or a
similar value) or the value of the
underlying index or instrument resumes
or trading in such series resumes in the
listing market.7
Additionally, pursuant to NSX Rule
15.9B(4)(b), the Exchange will
immediately halt trading in any new
derivative securities product if the
listing exchange notifies the Exchange
that the net asset value is not being
disseminated to all market participants
at the same time. The Exchange will
resume trading in the new derivative
securities product only when the net
asset value is disseminated to all market
participants at the same time or trading
7 The Exchange also has authority to suspend or
halt trading under NSX Rules 11.20, 12.11, and
15.7.
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
in the new derivative securities product
resumes on the listing market.
Lastly, NSX represents that the
Exchange’s surveillance procedures for
new derivative securities products
traded on the Exchange pursuant to UTP
will be similar to the procedures used
for equity securities traded on the
Exchange and will incorporate and rely
upon existing Exchange surveillance
systems. The Exchange will closely
monitor activity in new derivative
securities products traded on the
Exchange pursuant to UTP and deter
any potential improper trading activity.
The proposed rule change also provides
that the Exchange will enter into a
comprehensive surveillance sharing
agreement (‘‘CSSA’’) with a market
trading components of the index or
portfolio on which the new derivative
securities product is based to the same
extent as the listing exchange’s rules
require the listing market to enter into
a CSSA with such market.8
2. Statutory Basis
The basis under the Act for this
proposed rule change is found in
Section 6(b)(5),9 in that the proposed
rule change is designed to promote just
and equitable principles of trade, to
remove impediments to and perfect the
mechanisms 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 proposed rule change does not
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 not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
8 Although NSX’s rules have provisions that
relate to the activities of market makers, the
Exchange currently has no market makers and is not
approving any ETP Holder’s registration as a market
maker in any security. If NSX decides to provide
for market makers, it will seek to amend NSX Rule
15.9 to provide for certain restrictions on the
activities of such market makers to facilitate
surveillance.
9 15 U.S.C. 78f(b)(5).
E:\FR\FM\13MRN1.SGM
13MRN1
Federal Register / Vol. 73, No. 50 / Thursday, March 13, 2008 / Notices
the proposal is consistent with Section
6(b)(5) of the Act in that it is designed
to prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
Electronic Comments
cooperation and coordination with
• Use the Commission’s Internet
persons engaged in facilitating
comment form (https://www.sec.gov/
transactions in securities, to remove
rules/sro.shtml); or
impediments to and perfect the
• Send an e-mail to rulemechanism of a free and open market
comments@sec.gov. Please include File
and a national market system, and in
Number SR–NSX–2008–05 on the
general to protect investors and the
subject line.
public interest.
Paper Comments
This proposal would consolidate into
• Send paper comments in triplicate
a single rule various provisions related
to Nancy M. Morris, Secretary,
to UTP that have been established in
Securities and Exchange Commission,
other new products proposals
100 F Street, NE., Washington, DC
previously approved by the
20549.
Commission. In addition, proposed NSX
All submissions should refer to File
Rule 15.9 is closely modeled on a
Number SR–NSX–2008–05. This file
similar rule of another exchange,
number should be included on the
subject line if e-mail is used. To help the changes to which were recently
approved by the Commission.10 The
Commission process and review your
Commission finds good cause for
comments more efficiently, please use
only one method. The Commission will approving the proposed rule change
post all comments on the Commission’s prior to the 30th day after the date of
publication of the notice of filing thereof
Internet Web site (https://www.sec.gov/
in the Federal Register. NSX’s proposal
rules/sro.shtml). Copies of the
does not raise any novel issues, and
submission, all subsequent
amendments, all written statements
accelerated approval thereof will
with respect to the proposed rule
expedite the trading of additional
change that are filed with the
products by the Exchange, subject to
Commission, and all written
consistent and reasonable standards.
communications relating to the
Therefore, the Commission finds good
proposed rule change between the
cause, consistent with Section 19(b)(2)
Commission and any person, other than of the Act, to approve the proposed rule
those that may be withheld from the
change on an accelerated basis.
public in accordance with the
V. Conclusion
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
It is therefore ordered, pursuant to
the Commission’s Public Reference
Section 19(b)(2) of the Act,11 that the
Room, 100 F Street, NE., Washington,
proposed rule change, as amended (SR–
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. NSX–2008–05) is hereby approved on
an accelerated basis.
Copies of such filing also will be
available for inspection and copying at
For the Commission, by the Division of
the principal office of NSX. All
Trading and Markets, pursuant to delegated
comments received will be posted
authority.12
without change; the Commission does
Florence E. Harmon,
not edit personal identifying
Deputy Secretary.
information from submissions. You
[FR Doc. E8–4969 Filed 3–12–08; 8:45 am]
should submit only information that
you wish to make available publicly. All BILLING CODE 8011–01–P
submissions should refer to File
Number SR–NSX–2008–05 and should
be submitted on or before April 3, 2008.
mstockstill on PROD1PC66 with NOTICES
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
IV. Commission’s Findings and Order
Granting Accelerated Approval of the
Proposed Rule Change
After careful review, the Commission
finds that the proposed rule change, as
amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange. In
particular, the Commission finds that
VerDate Aug<31>2005
16:19 Mar 12, 2008
Jkt 214001
13599
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57456; File No. SR–
NYSEArca–2007–91]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Accelerated
Approval of a Proposed Rule Change,
as Modified by Amendment No. 1
Thereto, Relating to the Listing and
Trading of Six iShares S&P GSCITM
Commodity-Indexed Trusts
March 7, 2008.
On August 30, 2007, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or ‘‘Exchange’’), through
its wholly-owned subsidiary NYSE Arca
Equities, Inc. (‘‘NYSE Arca Equities’’),
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares
(‘‘Shares’’) of the following trusts
pursuant to NYSE Arca Equities Rule
8.203: iShares S&P GSCITM Energy
Commodity-Indexed Trust; iShares
S&P GSCITM Natural Gas CommodityIndexed Trust; iShares S&P GSCITM
Industrial Metals Commodity-Indexed
Trust; iShares S&P GSCITM Light
Energy Commodity-Indexed Trust;
iShares S&P GSCITM Livestock
Commodity-Indexed Trust; and
iShares S&P GSCITM Non-Energy
Commodity-Indexed Trust (collectively,
the ‘‘Trusts’’).3 On February 11, 2008,
the Exchange filed Amendment No. 1 to
the proposed rule change. The proposed
rule change, as amended, was published
for comment in the Federal Register on
February 20, 2008, for a 15-day
comment period.4 The Commission
received no comments on the proposed
rule change. This order approves the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
I. Description of the Proposal
NYSE Arca proposes to list and trade
Shares, which are units of beneficial
interest representing fractional
undivided beneficial interests in the net
assets of the Trusts.5 The objective of
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 iShares is a registered trademark of Barclays
Global Investors, N.A. ‘‘S&P GSCI’’ is a trademark
of Standard & Poor’s (‘‘S&P’’), a division of The
McGraw-Hill Companies, Inc.
4 See Securities Exchange Act Release No. 57318
(February 12, 2008), 73 FR 9381 (‘‘Notice’’).
5 The Commission approved for listing on the
New York Stock Exchange LLC (‘‘NYSE’’) shares of
the iShares GS Commodity Light Energy Indexed
Trust, shares of the iShares GS Commodity
Industrial Metals Indexed Trust, shares of the
2 17
10 See Securities Exchange Act Release No. 57387
(February 27, 2008), 73 FR 11965 (March 5, 2008)
(SR–ISE–2007–99).
11 15 U.S.C. 78s(b)(2).
12 17 CFR 200.30–3(a)(12).
PO 00000
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Continued
13MRN1
]]>Agencies
[Federal Register Volume 73, Number 50 (Thursday, March 13, 2008)]
[Notices]
[Pages 13597-13599]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-4969]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57448; File No. SR-NSX-2008-05]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change, as Modified by Amendment No. 1 Thereto, Consolidating into
a Single Rule Certain Requirements for Products Traded on the Exchange
Pursuant to Unlisted Trading Privileges
March 6, 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 March 6, 2008, the National Stock Exchange, Inc. (``Exchange'' or
``NSX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
On March 6, 2008, the Exchange filed Amendment No. 1 to the proposed
rule change. This order provides notice of the proposed rule change, as
amended, and approves the proposal on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its rules to consolidate into a
single rule certain requirements for products traded on the Exchange
pursuant to unlisted trading privileges (``UTP'') that have been
established in various new products proposals previously approved by
the Commission. The text of the proposed rule change is available at
the Exchange's principal office, on the Exchange's Web site (https://
www.nsx.com) and at the Commission's Public Reference Room.
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 III below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of
[[Page 13598]]
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 its rules to consolidate into a
single rule certain requirements for products traded on the Exchange
pursuant to unlisted trading privileges (``UTP'') that have been
established in various new products proposals previously approved by
the Commission. The Exchange proposes to amend NSX Rule 15.9 to set
forth rules regarding the extension of UTP to a security that is listed
on another national securities exchange. Any such security will be
subject to all Exchange trading rules applicable to equity securities,
unless otherwise noted. The Exchange will file with the Commission a
Form 19b-4(e) with respect to any such security that is a ``new
derivative securities product'' as defined in Rule 19b-4(e) under the
Act.\3\ In addition, any new derivative securities product traded on
the Exchange pursuant to proposed NSX Rule 15.9 will be subject to the
following criteria.
---------------------------------------------------------------------------
\3\ 17 CFR 240.19b-4(e).
---------------------------------------------------------------------------
Proposed NSX Rule 15.9B(2) provides that the Exchange will
distribute an information circular prior to the commencement of trading
in such new derivative securities product which generally will include
the same information as the information circular provided by the
listing exchange, including: (1) The special risks of trading the new
derivative securities product, including NSX Rule 3.7; \4\ (2) the
Exchange's rules that will apply to the new derivative securities
product, including the suitability rule; (3) information about the
dissemination of value of the underlying assets or indexes; and (4) the
risk of trading during irregular trading hours due to the lack of
calculation or dissemination of the intraday indicative value
(``Intraday Indicative Value'') or a similar value.\5\
---------------------------------------------------------------------------
\4\ NSX Rule 3.7 requires the ETP Holder to have reasonable
grounds to believe that a recommendation made by the ETP Holder is
suitable for the customer.
\5\ NSX's pre-market session is from 8 a.m. until 9:29:59 a.m.
Eastern Time and NSX's post-market session is from 4:00:01 p.m. to
6:30 p.m. Eastern Time.
---------------------------------------------------------------------------
Proposed NSX Rule 15.9(B)(3) reminds ETP Holders \6\ that they are
subject to the prospectus delivery requirements under the Securities
Act of 1933, as amended (``Securities Act''), unless the new derivative
securities product is the subject of an order by the Commission
exempting the product from certain prospectus delivery requirements
under Section 24(d) of the Investment Company Act of 1940 (``1940
Act'') and the product is not otherwise subject to prospectus delivery
requirements under the Securities Act. The Exchange will inform its ETP
Holders regarding the application of the provisions of this
subparagraph to a particular series of exchange-traded funds governed
by the 1940 Act by means of an information circular. This section also
includes a definition of the term exchange-traded fund.
---------------------------------------------------------------------------
\6\ An ETP Holder is a registered broker or dealer that has been
issued an Equity Trading Permit (``ETP'') by NSX.
---------------------------------------------------------------------------
Proposed NSX Rule 15.9B(4) addresses trading halts in the new
derivative securities products traded on the Exchange pursuant to UTP.
Proposed NSX Rule 15.9B(4) provides that the Exchange, upon
notification by the listing market of a halt due to a temporary
interruption in the calculation or wide dissemination of the Intraday
Indicative Value (or a similar value) or the value of the underlying
index or instrument, will immediately halt trading in that product on
the Exchange. If the Intraday Indicative Value (or a similar value) or
the value of the underlying index or instrument continues not to be
calculated or widely available as of trading on the Exchange on the
next business day, the Exchange shall not commence trading of the
product that day. If an interruption in the calculation or wide
dissemination of the Intraday Indicative Value (or a similar value) or
the value of the underlying index or instrument continues, the Exchange
may resume trading in the product only if calculation and wide
dissemination of the Intraday Indicative Value (or a similar value) or
the value of the underlying index or instrument resumes or trading in
such series resumes in the listing market.\7\
---------------------------------------------------------------------------
\7\ The Exchange also has authority to suspend or halt trading
under NSX Rules 11.20, 12.11, and 15.7.
---------------------------------------------------------------------------
Additionally, pursuant to NSX Rule 15.9B(4)(b), the Exchange will
immediately halt trading in any new derivative securities product if
the listing exchange notifies the Exchange that the net asset value is
not being disseminated to all market participants at the same time. The
Exchange will resume trading in the new derivative securities product
only when the net asset value is disseminated to all market
participants at the same time or trading in the new derivative
securities product resumes on the listing market.
Lastly, NSX represents that the Exchange's surveillance procedures
for new derivative securities products traded on the Exchange pursuant
to UTP will be similar to the procedures used for equity securities
traded on the Exchange and will incorporate and rely upon existing
Exchange surveillance systems. The Exchange will closely monitor
activity in new derivative securities products traded on the Exchange
pursuant to UTP and deter any potential improper trading activity. The
proposed rule change also provides that the Exchange will enter into a
comprehensive surveillance sharing agreement (``CSSA'') with a market
trading components of the index or portfolio on which the new
derivative securities product is based to the same extent as the
listing exchange's rules require the listing market to enter into a
CSSA with such market.\8\
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\8\ Although NSX's rules have provisions that relate to the
activities of market makers, the Exchange currently has no market
makers and is not approving any ETP Holder's registration as a
market maker in any security. If NSX decides to provide for market
makers, it will seek to amend NSX Rule 15.9 to provide for certain
restrictions on the activities of such market makers to facilitate
surveillance.
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2. Statutory Basis
The basis under the Act for this proposed rule change is found in
Section 6(b)(5),\9\ in that the proposed rule change is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanisms of a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
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\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not 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 not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 13599]]
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-NSX-2008-05 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.
All submissions should refer to File Number SR-NSX-2008-05. 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 NSX. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NSX-2008-05 and should be
submitted on or before April 3, 2008.
IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change
After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange. In particular, the Commission finds that the
proposal is consistent with Section 6(b)(5) of the Act in that 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, 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.
This proposal would consolidate into a single rule various
provisions related to UTP that have been established in other new
products proposals previously approved by the Commission. In addition,
proposed NSX Rule 15.9 is closely modeled on a similar rule of another
exchange, changes to which were recently approved by the
Commission.\10\ The Commission finds good cause for approving the
proposed rule change prior to the 30th day after the date of
publication of the notice of filing thereof in the Federal Register.
NSX's proposal does not raise any novel issues, and accelerated
approval thereof will expedite the trading of additional products by
the Exchange, subject to consistent and reasonable standards.
Therefore, the Commission finds good cause, consistent with Section
19(b)(2) of the Act, to approve the proposed rule change on an
accelerated basis.
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\10\ See Securities Exchange Act Release No. 57387 (February 27,
2008), 73 FR 11965 (March 5, 2008) (SR-ISE-2007-99).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change, as amended (SR-NSX-2008-05) is
hereby approved on an accelerated basis.
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\11\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-4969 Filed 3-12-08; 8:45 am]
BILLING CODE 8011-01-P
