Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to Currency Forward Pricing for Currency-Linked Securities, 22983-22987 [E8-9187]
Download as PDF
<![CDATA[
Federal Register / Vol. 73, No. 82 / Monday, April 28, 2008 / Notices
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
Determinations Under the African
Growth and Opportunity Act
Office of the United States
Trade Representative.
ACTION: Notice.
pwalker on PROD1PC71 with NOTICES
AGENCY:
SUMMARY: The United States Trade
Representative (USTR) has determined
that The Gambia has adopted an
effective visa system and related
procedures to prevent unlawful
transshipment and the use of counterfeit
documents in connection with
shipments of textile and apparel articles
and has implemented and follows, or is
making substantial progress toward
implementing and following, the
customs procedures required by the
African Growth and Opportunity Act
(AGOA). Therefore, imports of eligible
products from The Gambia qualify for
the textile and apparel benefits provided
under the AGOA.
DATES: Effective April 28, 2008.
FOR FURTHER INFORMATION CONTACT:
Laurie-Ann Agama, Director for African
Affairs, Office of the United States
Trade Representative, (202) 395–9514.
SUPPLEMENTARY INFORMATION: The
AGOA (Title I of the Trade and
Development Act of 2000, Pub. L. No.
106–200) provides preferential tariff
treatment for imports of certain textile
and apparel products of beneficiary subSaharan African countries. The textile
and apparel trade benefits under the
AGOA are available to imports of
eligible products from countries that the
President designates as ‘‘beneficiary
sub-Saharan African countries,’’
provided that these countries: (1) Have
adopted an effective visa system and
related procedures to prevent unlawful
transshipment and the use of counterfeit
documents; and (2) have implemented
and follow, or are making substantial
progress toward implementing and
following, certain customs procedures
that assist U.S. Customs and Border
Protection in verifying the origin of the
products.
On April 2, 2003, the President
designated The Gambia a ‘‘beneficiary
sub-Saharan African country.’’
Proclamation 7350 (October 2, 2000)
delegated to the USTR the authority to
determine whether designated countries
have met the two requirements
described above. The President directed
the USTR to announce any such
determinations in the Federal Register
and to implement them through
modifications of the Harmonized Tariff
Schedule of the United States (HTS).
Based on actions that the Government of
VerDate Aug<31>2005
18:22 Apr 25, 2008
Jkt 214001
The Gambia has taken, I have
determined that The Gambia has
satisfied these two requirements.
Accordingly, pursuant to the
authority vested in the USTR by
Proclamation 7350, U.S. note 7(a) to
subchapter II of chapter 98 of the HTS,
U.S. note 1 to subchapter XIX of chapter
98 of the HTS, and U.S. note 2(a) to
subchapter XIX of chapter 98 of the
HTS, are each modified by inserting
‘‘The Gambia’’ in alphabetical sequence
in the list of countries. The foregoing
modifications to the HTS are effective
with respect to articles entered, or
withdrawn from warehouse for
consumption, on or after the date of
publication of this notice. Importers
claiming preferential tariff treatment
under the AGOA for entries of textile
and apparel articles should ensure that
those entries meet the applicable visa
requirements. See Visa Requirements
Under the African Growth and
Opportunity Act, 66 FR 7837 (2001).
Susan C. Schwab,
United States Trade Representative.
[FR Doc. E8–9150 Filed 4–25–08; 8:45 am]
22983
by section 115 of the Airport and
Airway Safety and Capacity Expansion
Act of 1987, Public Law 100–223
(codified at 49 U.S.C. 50104) (‘‘the
Act’’), requires USTR to decide whether
any foreign countries have denied fair
market opportunities to U.S. products,
suppliers, or bidders in connection with
airport construction projects of $500,000
or more that are funded in whole or in
part by the governments of such
countries. The list of such countries
must be published in the Federal
Register. For the purposes of the Act,
USTR has decided not to include any
countries on the list of countries that
deny fair market opportunities for U.S.
products, suppliers, or bidders in
foreign government-funded airport
construction projects.
Susan C. Schwab,
United States Trade Representative.
[FR Doc. E8–9222 Filed 4–25–08; 8:45 am]
BILLING CODE 3190–W8–P
SECURITIES AND EXCHANGE
COMMISSION
BILLING CODE 3190–W8–P
[Release No. 34–57693; File No. SR–Amex–
2008–07]
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Order Granting
Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1 Thereto, Relating to
Currency Forward Pricing for
Currency-Linked Securities
Notice With Respect To List of
Countries Denying Fair Market
Opportunities for Government-Funded
Airport Construction Projects
Office of the United States
Trade Representative.
ACTION: Notice with respect to a list of
countries denying fair market
opportunities for products, suppliers or
bidders of the United States in airport
construction projects.
AGENCY:
EFFECTIVE DATE:
April 28, 2008.
Jean
Heilman Grier, Senior Procurement
Negotiator, Office of the United States
Trade Representative, (202) 395–9476,
or Maria Pagan, Associate General
Counsel, Office of the United States
Trade Representative, (202) 395–7305.
SUMMARY: Pursuant to section 533 of the
Airport and Airway Improvement Act of
1982, as amended (49 U.S.C. 50104), the
United States Trade Representative
(USTR) has determined not to include
any countries on the list of countries
that deny fair market opportunities for
U.S. products, suppliers, or bidders in
foreign government-funded airport
construction projects.
SUPPLEMENTARY INFORMATION: Section
533 of the Airport and Airway
Improvement Act of 1982, as amended
FOR FURTHER INFORMATION CONTACT:
PO 00000
Frm 00066
Fmt 4703
Sfmt 4703
April 21, 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 February
6, 2008, the American Stock Exchange
LLC (‘‘Exchange’’ or ‘‘Amex’’) 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 April 17, 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
Section 107F of the Amex Company
Guide (the ‘‘Company Guide’’) to permit
1 15
2 17
E:\FR\FM\28APN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
28APN1
22984
Federal Register / Vol. 73, No. 82 / Monday, April 28, 2008 / Notices
the listing of currency-linked securities
(‘‘Currency-Linked Securities’’) based
on a Currency Reference Asset
consisting of pricing information for one
or more currencies that is the generally
accepted forward price 3 for the
currency exchange rate(s) in question.
The text of the proposed rule change is
available at https://www.amex.com,
Amex, and 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
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
Section 107F(g)(ii) of the Company
Guide to permit the listing of CurrencyLinked Securities where the pricing
information for some or all of the
components of the Currency Reference
Asset is the generally accepted forward
price for the currency exchange rate(s)
in question.
The foreign exchange market is
predominantly an over-the-counter
(‘‘OTC’’) market operating 24 hours a
day, five days a week.4 London, New
York and Tokyo are the principal
geographic centers of the worldwide
foreign exchange market with
approximately 58% of all foreign
exchange business executed in the U.K.,
U.S., and Japan. Other smaller markets
include Singapore, Zurich, and
Frankfurt. The foreign currency market
is the largest and most liquid financial
market in the world. In 2007, the
average daily spot turnover accounted
for over $1 trillion USD and the average
daily forward turnover accounted for
$362 billion USD.5 Over 85% of
currency derivative products (swaps,
options and futures) are traded OTC.6
Foreign exchange rates are influenced
by national debt levels and trade
deficits, domestic and foreign inflation
rates and investors’ expectations
concerning inflation rates, domestic and
foreign interest rates and investors’
expectations concerning interest rates,
currency exchange rates, investment
and trading activities of mutual funds,
hedge funds and currency funds, and
global or regional political, economic or
financial events and situations.
Additionally, expectations among
market participants that a currency’s
value soon will change may also affect
exchange rates.
There are three major kinds of
transactions in the traditional foreign
currency markets: Spot transactions,
outright forwards and foreign exchange
swaps. ‘‘Spot’’ trades are foreign
currency transactions that settle
typically within two business days with
the counterparty to the trade. Spot
transactions account for approximately
35% of reported daily volume in the
traditional foreign currency markets.
‘‘Forward’’ trades, which are
transactions that settle on a date beyond
spot, account for 12% of the reported
daily volume, and ‘‘swap’’ transactions,
in which two parties exchange two
currencies on one or more specified
dates over an agreed period and
exchange them again when the period
ends, account for the remaining 53% of
volume.
Forward rates are quoted among
dealers in premiums or discounts from
the spot rate. The premium or discount
is measured in ‘‘points’’ that represent
the interest rate differential between two
currencies for the period of the forward,
converted into foreign exchange. In
addition to the liquidity in the forward
foreign exchange market, the forward
market is also transparent. Bloomberg,
Reuters and other major market data
providers disseminate quotes for the
forward market provided by OTC
dealers.
Most trading in the global OTC
foreign currency markets is conducted
by regulated financial institutions such
as banks and broker-dealers. In addition,
in the United States, the Foreign
Exchange Committee of the New York
Federal Reserve Bank has issued
Guidelines for Foreign Exchange
Trading, and central bank sponsored
committees in Japan and Singapore have
published similar best practice
guidelines. In the United Kingdom, the
Bank of England has published the NonInvestment Products Code, which
covers foreign currency trading. The
Financial Markets Association, whose
members include major international
banking organizations, has also
established best practices guidelines
called the Model Code.7 Participants in
the U.S. OTC market for foreign
currencies are generally regulated by
their oversight regulators. For example,
participating banks are regulated by the
banking authorities.
As set forth above, this proposal
would amend Section 107F(g)(ii) of the
Company Guide to permit the listing of
Currency-Linked Securities where the
pricing information for some or all of
the components of the Currency
Reference Asset is the generally
accepted forward price for the currency
exchange rate in question. The generally
accepted forward price is typically
calculated as follows: 8
1 + Terms Currency Interest Rate × Forward Days/Interest Rate Year
Forward Rate = Spot Rate ×
1 + Base Currency Interest Rate × Forward Days/Interest Rate Year
foreign currency market provides an
adequate basis for using forward pricing
information in connection with
Currency-Linked Securities.
3 This proposal would permit the use of a
generally accepted forward price based on forward
contracts that are either ‘‘deliverable’’ or ‘‘nondeliverable.’’
4 For information relating to the foreign exchange
market generally, see Securities Exchange Act
Release No. 54351 (August 23, 2006), 71 FR 51245
(August 29, 2006) (SR–Amex–2006–44).
5 See Bank for International Settlements,
Triennial Central Bank Survey of Foreign Exchange
and Derivatives Market Activity in 2007 (December
2007) (Table E1) (the ‘‘2007 BIS Report’’).
6 Id. at Table E38.
7 See supra note 4.
8 See Federal Reserve Bank of New York, All
About * * * The Foreign Exchange Market in the
United States, p. 38. (https://www.newyorkfed.org/
education/addpub/usfxm/).
9 For example, Bloomberg, Reuters, and other
major market data providers disseminate pricing
information for the forward market provided by
OTC market makers.
VerDate Aug<31>2005
18:22 Apr 25, 2008
Jkt 214001
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
E:\FR\FM\28APN1.SGM
28APN1
EN28AP08.002</MATH>
pwalker on PROD1PC71 with NOTICES
Points = Forward Rate¥Spot Rate
The Exchange believes that the
liquidity and transparency 9 of the OTC
22985
Federal Register / Vol. 73, No. 82 / Monday, April 28, 2008 / Notices
Based upon the trading volumes of
forward contracts, the ability for an
issuer to use forward pricing
information under Section 107F(g)(ii) of
the Company Guide for any component
of a Currency Reference Asset will be
restricted to the following currencies
(collectively, ‘‘High Volume
Currencies’’): U.S. Dollar, Euro,
Japanese Yen, British Pound Sterling,
Swiss Franc, Canadian Dollar,
Australian Dollar, Brazilian Real,
Chinese Renminbi, Czech Koruna,
Danish Krone, Hong Kong Dollar,
Hungarian Forint, Indian Rupee,
Indonesian Rupiah, Korean Won,
Mexican Peso, Norwegian Krone, New
Zealand Dollar, Philippine Peso, Polish
Zloty, Russian Ruble, Swedish Krona,
South African Rand, Singapore Dollar,
Taiwan Dollar, Thai Baht or New
Turkish Lira. The trading volume in
these currencies is as follows:10
FX FORWARD AVERAGE DAILY VOLUME IN MILLIONS
2001
2004
2007
U.S. Dollar .......................................................................................................................................
Euro .................................................................................................................................................
Japanese Yen ..................................................................................................................................
British Pound Sterling ......................................................................................................................
Swiss Franc .....................................................................................................................................
Canadian Dollar ...............................................................................................................................
Australian Dollar ..............................................................................................................................
Brazilian Real ...................................................................................................................................
Chinese Renminbi ...........................................................................................................................
Czech Koruna ..................................................................................................................................
Danish Krone ...................................................................................................................................
Hong Kong Dollar ............................................................................................................................
Hungarian Forint ..............................................................................................................................
Indian Rupee ...................................................................................................................................
Indonesian Rupiah ...........................................................................................................................
Korean Won .....................................................................................................................................
Mexican Peso ..................................................................................................................................
Norwegian Krone .............................................................................................................................
New Zealand Dollar .........................................................................................................................
Philippine Peso ................................................................................................................................
Polish Zloty ......................................................................................................................................
Russian Ruble .................................................................................................................................
Swedish Krona .................................................................................................................................
South African Rand .........................................................................................................................
Singapore Dollar ..............................................................................................................................
Taiwan Dollar ...................................................................................................................................
Thai Baht New .................................................................................................................................
New Turkish Lira ..............................................................................................................................
110,795
54,327
33,257
16,826
6,637
4,335
5,416
1,259
55
96
888
3,055
28
428
103
1,671
673
1,187
579
73
439
52
3,207
825
825
603
231
164
170,357
88,243
47,135
31,338
11,307
8,947
9,788
1,072
811
253
1,347
2,221
308
1,531
267
6,048
1,716
2,543
1,462
232
483
253
4,158
1,122
1,242
2,798
490
239
289,435
137,391
61,453
46,274
21,186
15,280
20,463
5,259
4,572
1,432
2,841
6,022
1,357
5,815
1,292
10,013
4,594
6,498
6,639
1,123
2,644
1,253
8,543
3,458
2,962
4,724
847
535
190,196
93,320
47,282
31,479
13,043
9,521
11,889
2,530
1,813
594
1,692
3,766
564
2,591
554
5,911
2,328
3,409
2,893
476
1,189
519
5,303
1,802
1,676
2,708
523
313
Total (divided by 2) ...................................................................................................................
pwalker on PROD1PC71 with NOTICES
Currency
125,018
199,858
337,956
220,944
The total amount of contracts
reflected in the chart above is divided
by two because each contract is
denominated in two currencies. For
example, one contract will reflect cross
rates in two currencies: U.S. Dollars
against the Euro, the Singapore dollar
against the Turkish Lira, etc. The daily
notional turnover for the currency
forward contracts reflected in the chart
above ranged from 535 million USD to
289 billion USD in April 2007.
In connection with this proposal, the
generally accepted forward price will be
used for pricing purposes only to the
extent that the Currency Reference Asset
(as defined in Section 107F of the
Company Guide) is based on the
generally accepted forward price. In the
event a Currency Reference Asset is
based upon the generally accepted
forward price and such forward price
10 See 2007 BIS Report, supra note 5, Statistical
Annex Table—Foreign Exchange Markets; BIS,
Triennial Central Bank Survey of Foreign Exchange
and Derivatives Market Activity in April 2004,
VerDate Aug<31>2005
18:22 Apr 25, 2008
Jkt 214001
becomes unavailable due to a holiday,
the generally accepted spot price may be
used for calculating the pricing
information of the Currency Reference
Asset. The pricing information of the
Currency Reference Asset on the
following business day must be based
upon the generally accepted forward
price. This exception will permit certain
hedged products that use forward
pricing information to use the spot
price, which is quoted in the United
States, when the generally accepted
forward price, which is derived from the
generally accepted spot price, is
unavailable due to a foreign holiday.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,11 in general, and
furthers the objectives of Section 6(b)(5)
Statistical Annex Tables—Foreign Exchange
Markets (2004); and BIS, Triennial Central Bank
Survey of Foreign Exchange and Derivatives Market
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
Average
of the Act,12 in particular, 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,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. Specifically, the Exchange
believes that the proposal to permit the
use of generally accepted foreign
currency forward pricing in connection
with Currency-Linked Securities may
better reflect the large, growing market
in foreign exchange worldwide.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
Activity in April 2001, Statistical Annex Tables—
Foreign Exchange Markets (2001).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
E:\FR\FM\28APN1.SGM
28APN1
22986
Federal Register / Vol. 73, No. 82 / Monday, April 28, 2008 / Notices
is not necessary or appropriate in
furtherance of the purposes of the Act.
pwalker on PROD1PC71 with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has 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.
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–Amex–2008–07 and should
be submitted on or before May 19, 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 is
consistent with the requirements of the
III. Solicitation of Comments
Act and the rules and regulations
Interested persons are invited to
thereunder applicable to a national
submit written data, views, and
securities exchange.13 In particular, the
arguments concerning the foregoing,
Commission finds that the proposed
including whether the proposed rule
rule change is consistent with Section
change is consistent with the Act.
6(b)(5) of the Act,14 which requires that
Comments may be submitted by any of
an exchange have rules designed, among
the following methods:
other things, to promote just and
equitable principles of trade, to remove
Electronic Comments
impediments to and perfect the
• Use the Commission’s Internet
mechanism of a free and open market
comment form (https://www.sec.gov/
and a national market system, and, in
rules/sro.shtml); or
general, to protect investors and the
• Send an e-mail to rulepublic interest.
comments@sec.gov. Please include File
The Commission believes that
Number SR–Amex–2008–07 on the
opportunities to invest in derivative
subject line.
securities products based not only on
the spot value, but also on the forward
Paper Comments
price, of a foreign currency provide
• Send paper comments in triplicate
additional choices to accommodate
to Nancy M. Morris, Secretary,
particular investment needs and
Securities and Exchange Commission,
objectives, should benefit investors. The
100 F Street, NE., Washington, DC
Commission notes that the foreign
20549–1090.
exchange market as a whole, which is
All submissions should refer to File
predominantly OTC, is a highly liquid
Number SR–Amex–2008–07. This file
market.15 The Commission also notes
number should be included on the
that outright forward transactions
subject line if e-mail is used. To help the
account for a material percentage of
Commission process and review your
reported daily volume on the foreign
comments more efficiently, please use
exchange markets.
only one method. The Commission will
In the interest of assuring sufficient
post all comments on the Commission’s liquidity of the underlying components
Internet Web site (https://www.sec.gov/
and thereby protecting investors of
rules/sro.shtml). Copies of the
Currency-Linked Securities that are
submission, all subsequent
based on the generally accepted forward
amendments, all written statements
price for the currency exchange rate in
with respect to the proposed rule
question, the use of forward pricing
change that are filed with the
information for any such component of
Commission, and all written
a Currency Reference Asset would be
communications relating to the
limited to the High Volume Currencies.
proposed rule change between the
The Commission notes that CurrencyCommission and any person, other than Linked Securities that satisfy the
those that may be withheld from the
applicable requirements under Section
public in accordance with the
107F of the Company Guide would be
provisions of 5 U.S.C. 552, will be
able to be listed and traded pursuant to
available for inspection and copying in
Rule 19b–4(e) under the Act.16 The
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
13 In approving this rule change, the Commission
DC 20549, on official business days
notes that it has considered the proposal’s impact
between the hours of 10 a.m. and 3 p.m. on efficiency, competition, and capital formation.
See 15 U.S.C. 78c(f).
Copies of such filing also will be
14 15 U.S.C. 78f(b)(5).
available for inspection and copying at
15 See supra note 5 and accompanying text.
the principal office of the Exchange. All
16 See 17 CFR 240.19b-4(e). Rule 19b–4(e)(1)
comments received will be posted
under the Act provides that the listing and trading
of a new derivative securities product by a selfwithout change; the Commission does
VerDate Aug<31>2005
18:22 Apr 25, 2008
Jkt 214001
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
Commission believes that, to list and
trade Currency-Linked Security
products based on forward prices of
foreign currencies pursuant to Rule
19b–4(e) under the Act, limiting such
foreign currencies to the High Volume
Global Currencies is an appropriate
measure to assure sufficient liquidity in
the underlying components.17 In
addition, the forward price should be
used for pricing purposes only to the
extent that the Currency Reference Asset
is based on the forward price.18 The
Commission believes that the proposed
rule change, which seeks to expand the
types of components on which
Currency-Linked Securities are based,
should promote the listing and trading
of additional Currency-Linked
Securities and thereby support greater
options and competition in such
products, to the benefit of investors and
the public interest.
The Commission finds good cause for
approving this proposal before the 30th
day after the publication of notice
thereof in the Federal Register. The
Commission has approved substantively
identical proposed rule change by
another national securities exchange 19
and does not believe that this proposal
raises any novel regulatory issues.
Accelerating approval of this proposal
should benefit investors by creating,
without undue delay, additional
competition in the market for CurrencyLinked Securities.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,20 that the
proposed rule change (SR–Amex–2008–
07), as modified by Amendment No. 1
regulatory organization (‘‘SRO’’) shall not be
deemed a proposed rule change, pursuant to
paragraph (c)(1) of Rule 19b–4 under the Act (17
CFR 240.19b–4(c)(1)), if the Commission has
approved, pursuant to Section 19(b) of the Act (15
U.S.C. 78s(b)), the SRO’s trading rules, procedures,
and listing standards for the product class that
would include the new derivatives securities
product, and the SRO has a surveillance program
for the product class.
17 The Commission further notes that the
Exchange may seek to list and trade a CurrencyLinked Security product based on forward prices of
non-High Volume Global Currencies by filing a
proposed rule change pursuant to Section 19(b)(1)
of the Act.
18 The proposal also states that, with respect to a
Currency-Linked Security that is based on the
forward price of a foreign currency, if the forward
price is not available due to a holiday, the spot
price may be used for calculating the pricing
information of the Currency Reference Asset. The
pricing information on the following business day
must be based on the forward price. See proposed
Commentary .01 to Section 107F of the Company
Guide.
19 See Securities Exchange Act Release No. 54760
(March 10, 2008), 73 FR 13942 (March 14, 2008)
(SR–NYSEArca–2008–12).
20 15 U.S.C. 78s(b)(2).
E:\FR\FM\28APN1.SGM
28APN1
Federal Register / Vol. 73, No. 82 / Monday, April 28, 2008 / Notices
thereto, be, and it hereby is, approved
on an accelerated basis.
and C below, of the most significant
aspects of such statements.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–9187 Filed 4–25–08; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
Historically, securities listed on
Nasdaq have traded using four or five
character symbols.5 In 2005, however,
Nasdaq announced its intent to allow
companies listed on Nasdaq to also use
one, two or three character symbols
beginning on January 31, 2007.6 This
announcement was designed to provide
market participants and vendors the
time needed to make required changes
to their own systems that may be
affected by the change. Since February
20, 2007, Nasdaq has had the ability to
accept and distribute Nasdaq-listed
securities with one, two or three
character symbols. Nasdaq reminded
market participants about this change
again on March 1, 2007, stressing that
‘‘[a]ll customers should have completed
their coding and testing efforts to ensure
their readiness to support 1-, 2- and 3character NASDAQ-listed issues’’ 7 and
on March 22, 2007, Delta Financial
Corporation transferred to Nasdaq from
the American Stock Exchange and
maintained its three-character symbol,
DFC.8 Subsequently, the Commission
approved a rule change to permit any
company to transfer from another
exchange to Nasdaq and maintain its
three-character symbols.9 In total, 25
companies have done so and there have
been no trading problems reported to
Nasdaq as a result of trading securities
on Nasdaq with three-character
symbols.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57696; File No. SR–
NASDAQ–2008–034]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Trading Two-Characters Ticker
Symbols
April 22, 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 April 16,
2008, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’) 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
Nasdaq. Nasdaq has filed this proposal
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(5) 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.
pwalker on PROD1PC71 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to trade the common
stock of CA, Inc. on Nasdaq using the
two-character symbol ‘‘CA.’’
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq 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. Nasdaq has prepared
summaries, set forth in Sections A, B,
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(5).
1 15
VerDate Aug<31>2005
18:22 Apr 25, 2008
Jkt 214001
1. Purpose
5 This includes securities listed on Nasdaq’s
predecessor market, operated as a facility of the
NASD.
6 See Head Trader Alert 2005-133 (November 14,
2005), available at: https://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2005-133 and Vendor Alert
2005-070 (November 14, 2005), available at: https://
www.nasdaqtrader.com/
TraderNews.aspx?id=nva2005-070. See also Head
Trader Alert 2006-144 (September 29, 2006),
available at: https://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2006–144, Head Trader
Alert 2006-193 (November 16, 2006), available at:
https://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2006-193 and Vendor Alert
2006-065 (October 4, 2006), available at: https://
www.nasdaqtrader.com/
TraderNews.aspx?id=nva2006–065.
7 Head Trader Alert 2007-050 (March 1, 2007),
available at: https://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2007–050.
8 See Securities Exchange Act Release No. 55519
(March 26, 2007) 72 FR 15737 (April 2, 2007) (SR–
NASDAQ–2007–025).
9 See Securities Exchange Act Release No. 56028
(July 9, 2007), 72 FR 38639 (July 13, 2007)
(approving SR–NASDAQ–2007–031).
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
22987
Nasdaq now proposes to allow CA,
Inc., which currently trades with the
two-character symbol ‘‘CA’’ to transfer
its common stock to Nasdaq from
another domestic market and continue
using that two-character symbol. Nasdaq
believes that allowing this company to
maintain its symbol will reduce investor
confusion and promote competition
among exchanges. Specifically, allowing
CA to maintain its trading symbol will
reduce investor confusion associated
with its transfer to Nasdaq because
investors will continue to be able to
obtain quotations and execute trades
using the same familiar symbol and will
allow the issuer to maintain a symbol
that has become a part of its identity to
investors.10 Nasdaq also notes that the
potential for confusion from a symbol
change could be magnified in this case,
given that the company’s name and
current trading symbol are identical.
Further, Nasdaq believes that permitting
CA to maintain its symbol will enhance
competition among exchanges by
removing concerns about investor
confusion surrounding its symbol from
the factors a company must consider
when choosing where to list its equities.
This proposal is also consistent with the
historical practice of allowing
companies to maintain their symbols
when they switch among national
securities exchanges.11
Given the foregoing, Nasdaq believes
that market participants were provided
adequate notice of this change and are
prepared to accommodate the trading of
this company on Nasdaq using the
symbol CA. Further, Nasdaq believes
that any change to the symbol will cause
confusion among investors and market
participants. As such, Nasdaq proposes
to begin trading the common stock of
CA, Inc. on Nasdaq using the symbol CA
on April 28, 2008. While this filing
relates to the transfer of this issuer,
Nasdaq remains committed to working
with the Commission and other markets
to establish an equitable and transparent
symbol assignment plan.12
10 A market transfer will still be transparent to
investors because, under the Commission’s rules, a
company must announce the transfer of its listing
on a Form 8–K. See Form 8–K, item 3.01(d). In
addition, the issuer must publish notice of its intent
to withdraw a class of securities from listing and/
or registration, along with its reasons for such
withdrawal, via a press release and, if it has a
publicly accessible Web site, on that Web site. See
Rule 12d2–2(c)(2)(iii), 17 CFR 240.12d2–2(c)(2)(iii).
11 See, e.g., Darwin Professional Underwriters,
Inc. (from NYSE Arca to NYSE keeping the symbol
DR), Chile Fund, Inc. (from NYSE to Amex keeping
the symbol CH), and iShares NYSE 100 (from NYSE
to NYSE Arca keeping the symbol NY).
12 See Securities Exchange Act Release No. 56037
(July 10, 2007) 72 FR 39096 (July 17, 2007).
E:\FR\FM\28APN1.SGM
28APN1
]]>Agencies
[Federal Register Volume 73, Number 82 (Monday, April 28, 2008)]
[Notices]
[Pages 22983-22987]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9187]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57693; File No. SR-Amex-2008-07]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change, as Modified by Amendment No. 1 Thereto, Relating to
Currency Forward Pricing for Currency-Linked Securities
April 21, 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 February 6, 2008, the American Stock Exchange LLC (``Exchange'' or
``Amex'') 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 April 17, 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 Section 107F of the Amex Company
Guide (the ``Company Guide'') to permit
[[Page 22984]]
the listing of currency-linked securities (``Currency-Linked
Securities'') based on a Currency Reference Asset consisting of pricing
information for one or more currencies that is the generally accepted
forward price \3\ for the currency exchange rate(s) in question. The
text of the proposed rule change is available at https://www.amex.com,
Amex, and the Commission's Public Reference Room.
---------------------------------------------------------------------------
\3\ This proposal would permit the use of a generally accepted
forward price based on forward contracts that are either
``deliverable'' or ``non-deliverable.''
---------------------------------------------------------------------------
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 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 Section 107F(g)(ii) of the Company
Guide to permit the listing of Currency-Linked Securities where the
pricing information for some or all of the components of the Currency
Reference Asset is the generally accepted forward price for the
currency exchange rate(s) in question.
The foreign exchange market is predominantly an over-the-counter
(``OTC'') market operating 24 hours a day, five days a week.\4\ London,
New York and Tokyo are the principal geographic centers of the
worldwide foreign exchange market with approximately 58% of all foreign
exchange business executed in the U.K., U.S., and Japan. Other smaller
markets include Singapore, Zurich, and Frankfurt. The foreign currency
market is the largest and most liquid financial market in the world. In
2007, the average daily spot turnover accounted for over $1 trillion
USD and the average daily forward turnover accounted for $362 billion
USD.\5\ Over 85% of currency derivative products (swaps, options and
futures) are traded OTC.\6\
---------------------------------------------------------------------------
\4\ For information relating to the foreign exchange market
generally, see Securities Exchange Act Release No. 54351 (August 23,
2006), 71 FR 51245 (August 29, 2006) (SR-Amex-2006-44).
\5\ See Bank for International Settlements, Triennial Central
Bank Survey of Foreign Exchange and Derivatives Market Activity in
2007 (December 2007) (Table E1) (the ``2007 BIS Report'').
\6\ Id. at Table E38.
---------------------------------------------------------------------------
Foreign exchange rates are influenced by national debt levels and
trade deficits, domestic and foreign inflation rates and investors'
expectations concerning inflation rates, domestic and foreign interest
rates and investors' expectations concerning interest rates, currency
exchange rates, investment and trading activities of mutual funds,
hedge funds and currency funds, and global or regional political,
economic or financial events and situations. Additionally, expectations
among market participants that a currency's value soon will change may
also affect exchange rates.
There are three major kinds of transactions in the traditional
foreign currency markets: Spot transactions, outright forwards and
foreign exchange swaps. ``Spot'' trades are foreign currency
transactions that settle typically within two business days with the
counterparty to the trade. Spot transactions account for approximately
35% of reported daily volume in the traditional foreign currency
markets. ``Forward'' trades, which are transactions that settle on a
date beyond spot, account for 12% of the reported daily volume, and
``swap'' transactions, in which two parties exchange two currencies on
one or more specified dates over an agreed period and exchange them
again when the period ends, account for the remaining 53% of volume.
Forward rates are quoted among dealers in premiums or discounts
from the spot rate. The premium or discount is measured in ``points''
that represent the interest rate differential between two currencies
for the period of the forward, converted into foreign exchange. In
addition to the liquidity in the forward foreign exchange market, the
forward market is also transparent. Bloomberg, Reuters and other major
market data providers disseminate quotes for the forward market
provided by OTC dealers.
Most trading in the global OTC foreign currency markets is
conducted by regulated financial institutions such as banks and broker-
dealers. In addition, in the United States, the Foreign Exchange
Committee of the New York Federal Reserve Bank has issued Guidelines
for Foreign Exchange Trading, and central bank sponsored committees in
Japan and Singapore have published similar best practice guidelines. In
the United Kingdom, the Bank of England has published the Non-
Investment Products Code, which covers foreign currency trading. The
Financial Markets Association, whose members include major
international banking organizations, has also established best
practices guidelines called the Model Code.\7\ Participants in the U.S.
OTC market for foreign currencies are generally regulated by their
oversight regulators. For example, participating banks are regulated by
the banking authorities.
---------------------------------------------------------------------------
\7\ See supra note 4.
---------------------------------------------------------------------------
As set forth above, this proposal would amend Section 107F(g)(ii)
of the Company Guide to permit the listing of Currency-Linked
Securities where the pricing information for some or all of the
components of the Currency Reference Asset is the generally accepted
forward price for the currency exchange rate in question. The generally
accepted forward price is typically calculated as follows: \8\
---------------------------------------------------------------------------
\8\ See Federal Reserve Bank of New York, All About * * * The
Foreign Exchange Market in the United States, p. 38. (https://
www.newyorkfed.org/education/addpub/usfxm/).
[GRAPHIC] [TIFF OMITTED] TN28AP08.002
Points = Forward Rate-Spot Rate
The Exchange believes that the liquidity and transparency \9\ of
the OTC foreign currency market provides an adequate basis for using
forward pricing information in connection with Currency-Linked
Securities.
---------------------------------------------------------------------------
\9\ For example, Bloomberg, Reuters, and other major market data
providers disseminate pricing information for the forward market
provided by OTC market makers.
---------------------------------------------------------------------------
[[Page 22985]]
Based upon the trading volumes of forward contracts, the ability
for an issuer to use forward pricing information under Section
107F(g)(ii) of the Company Guide for any component of a Currency
Reference Asset will be restricted to the following currencies
(collectively, ``High Volume Currencies''): U.S. Dollar, Euro, Japanese
Yen, British Pound Sterling, Swiss Franc, Canadian Dollar, Australian
Dollar, Brazilian Real, Chinese Renminbi, Czech Koruna, Danish Krone,
Hong Kong Dollar, Hungarian Forint, Indian Rupee, Indonesian Rupiah,
Korean Won, Mexican Peso, Norwegian Krone, New Zealand Dollar,
Philippine Peso, Polish Zloty, Russian Ruble, Swedish Krona, South
African Rand, Singapore Dollar, Taiwan Dollar, Thai Baht or New Turkish
Lira. The trading volume in these currencies is as follows:\10\
---------------------------------------------------------------------------
\10\ See 2007 BIS Report, supra note 5, Statistical Annex
Table--Foreign Exchange Markets; BIS, Triennial Central Bank Survey
of Foreign Exchange and Derivatives Market Activity in April 2004,
Statistical Annex Tables--Foreign Exchange Markets (2004); and BIS,
Triennial Central Bank Survey of Foreign Exchange and Derivatives
Market Activity in April 2001, Statistical Annex Tables--Foreign
Exchange Markets (2001).
FX Forward Average Daily Volume in Millions
----------------------------------------------------------------------------------------------------------------
Currency 2001 2004 2007 Average
----------------------------------------------------------------------------------------------------------------
U.S. Dollar......................................................... 110,795 170,357 289,435 190,196
Euro................................................................ 54,327 88,243 137,391 93,320
Japanese Yen........................................................ 33,257 47,135 61,453 47,282
British Pound Sterling.............................................. 16,826 31,338 46,274 31,479
Swiss Franc......................................................... 6,637 11,307 21,186 13,043
Canadian Dollar..................................................... 4,335 8,947 15,280 9,521
Australian Dollar................................................... 5,416 9,788 20,463 11,889
Brazilian Real...................................................... 1,259 1,072 5,259 2,530
Chinese Renminbi.................................................... 55 811 4,572 1,813
Czech Koruna........................................................ 96 253 1,432 594
Danish Krone........................................................ 888 1,347 2,841 1,692
Hong Kong Dollar.................................................... 3,055 2,221 6,022 3,766
Hungarian Forint.................................................... 28 308 1,357 564
Indian Rupee........................................................ 428 1,531 5,815 2,591
Indonesian Rupiah................................................... 103 267 1,292 554
Korean Won.......................................................... 1,671 6,048 10,013 5,911
Mexican Peso........................................................ 673 1,716 4,594 2,328
Norwegian Krone..................................................... 1,187 2,543 6,498 3,409
New Zealand Dollar.................................................. 579 1,462 6,639 2,893
Philippine Peso..................................................... 73 232 1,123 476
Polish Zloty........................................................ 439 483 2,644 1,189
Russian Ruble....................................................... 52 253 1,253 519
Swedish Krona....................................................... 3,207 4,158 8,543 5,303
South African Rand.................................................. 825 1,122 3,458 1,802
Singapore Dollar.................................................... 825 1,242 2,962 1,676
Taiwan Dollar....................................................... 603 2,798 4,724 2,708
Thai Baht New....................................................... 231 490 847 523
New Turkish Lira.................................................... 164 239 535 313
-------------------------------------------
Total (divided by 2)............................................ 125,018 199,858 337,956 220,944
----------------------------------------------------------------------------------------------------------------
The total amount of contracts reflected in the chart above is
divided by two because each contract is denominated in two currencies.
For example, one contract will reflect cross rates in two currencies:
U.S. Dollars against the Euro, the Singapore dollar against the Turkish
Lira, etc. The daily notional turnover for the currency forward
contracts reflected in the chart above ranged from 535 million USD to
289 billion USD in April 2007.
In connection with this proposal, the generally accepted forward
price will be used for pricing purposes only to the extent that the
Currency Reference Asset (as defined in Section 107F of the Company
Guide) is based on the generally accepted forward price. In the event a
Currency Reference Asset is based upon the generally accepted forward
price and such forward price becomes unavailable due to a holiday, the
generally accepted spot price may be used for calculating the pricing
information of the Currency Reference Asset. The pricing information of
the Currency Reference Asset on the following business day must be
based upon the generally accepted forward price. This exception will
permit certain hedged products that use forward pricing information to
use the spot price, which is quoted in the United States, when the
generally accepted forward price, which is derived from the generally
accepted spot price, is unavailable due to a foreign holiday.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\11\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\12\ in particular, 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, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
Specifically, the Exchange believes that the proposal to permit the use
of generally accepted foreign currency forward pricing in connection
with Currency-Linked Securities may better reflect the large, growing
market in foreign exchange worldwide.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that
[[Page 22986]]
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, 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-Amex-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.
All submissions should refer to File Number SR-Amex-2008-07. 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-Amex-2008-07 and should be
submitted on or before May 19, 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 is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\13\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\14\ which
requires that an exchange have rules designed, among other things, 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.
---------------------------------------------------------------------------
\13\ In approving this rule change, the Commission notes that it
has considered the proposal's impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that opportunities to invest in derivative
securities products based not only on the spot value, but also on the
forward price, of a foreign currency provide additional choices to
accommodate particular investment needs and objectives, should benefit
investors. The Commission notes that the foreign exchange market as a
whole, which is predominantly OTC, is a highly liquid market.\15\ The
Commission also notes that outright forward transactions account for a
material percentage of reported daily volume on the foreign exchange
markets.
---------------------------------------------------------------------------
\15\ See supra note 5 and accompanying text.
---------------------------------------------------------------------------
In the interest of assuring sufficient liquidity of the underlying
components and thereby protecting investors of Currency-Linked
Securities that are based on the generally accepted forward price for
the currency exchange rate in question, the use of forward pricing
information for any such component of a Currency Reference Asset would
be limited to the High Volume Currencies. The Commission notes that
Currency-Linked Securities that satisfy the applicable requirements
under Section 107F of the Company Guide would be able to be listed and
traded pursuant to Rule 19b-4(e) under the Act.\16\ The Commission
believes that, to list and trade Currency-Linked Security products
based on forward prices of foreign currencies pursuant to Rule 19b-4(e)
under the Act, limiting such foreign currencies to the High Volume
Global Currencies is an appropriate measure to assure sufficient
liquidity in the underlying components.\17\ In addition, the forward
price should be used for pricing purposes only to the extent that the
Currency Reference Asset is based on the forward price.\18\ The
Commission believes that the proposed rule change, which seeks to
expand the types of components on which Currency-Linked Securities are
based, should promote the listing and trading of additional Currency-
Linked Securities and thereby support greater options and competition
in such products, to the benefit of investors and the public interest.
---------------------------------------------------------------------------
\16\ See 17 CFR 240.19b-4(e). Rule 19b-4(e)(1) under the Act
provides that the listing and trading of a new derivative securities
product by a self-regulatory organization (``SRO'') shall not be
deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule
19b-4 under the Act (17 CFR 240.19b-4(c)(1)), if the Commission has
approved, pursuant to Section 19(b) of the Act (15 U.S.C. 78s(b)),
the SRO's trading rules, procedures, and listing standards for the
product class that would include the new derivatives securities
product, and the SRO has a surveillance program for the product
class.
\17\ The Commission further notes that the Exchange may seek to
list and trade a Currency-Linked Security product based on forward
prices of non-High Volume Global Currencies by filing a proposed
rule change pursuant to Section 19(b)(1) of the Act.
\18\ The proposal also states that, with respect to a Currency-
Linked Security that is based on the forward price of a foreign
currency, if the forward price is not available due to a holiday,
the spot price may be used for calculating the pricing information
of the Currency Reference Asset. The pricing information on the
following business day must be based on the forward price. See
proposed Commentary .01 to Section 107F of the Company Guide.
---------------------------------------------------------------------------
The Commission finds good cause for approving this proposal before
the 30th day after the publication of notice thereof in the Federal
Register. The Commission has approved substantively identical proposed
rule change by another national securities exchange \19\ and does not
believe that this proposal raises any novel regulatory issues.
Accelerating approval of this proposal should benefit investors by
creating, without undue delay, additional competition in the market for
Currency-Linked Securities.
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 54760 (March 10,
2008), 73 FR 13942 (March 14, 2008) (SR-NYSEArca-2008-12).
---------------------------------------------------------------------------
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\20\ that the proposed rule change (SR-Amex-2008-07), as modified
by Amendment No. 1
[[Page 22987]]
thereto, be, and it hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78s(b)(2).
\21\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-9187 Filed 4-25-08; 8:45 am]
BILLING CODE 8010-01-P
