Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of Shares of the NETS Tokyo Stock Exchange REIT Index Fund, 32377-32379 [E8-12705]
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Federal Register / Vol. 73, No. 110 / Friday, June 6, 2008 / Notices
regulatory functions of NASD and NYSE
Regulation, Inc. Release No. 34–56145,
as amended herein, remains in effect as
of July 26, 2007, the date it was issued
by the Commission.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56145A; File No. SR–
NASD–2007–023
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc. (n/k/a Financial Industry
Regulatory Authority, Inc.); Order
Approving Proposed Rule Change To
Amend the By-Laws of NASD To
Implement Governance and Related
Changes To Accommodate the
Consolidation of the Member Firm
Regulatory Functions of NASD and
NYSE Regulation, Inc.
May 30, 2008.
Amended
In Part V of Securities Exchange Act
Release No. 56145 (‘‘Release No. 34–
56145’’), issued July 26, 2007,1 the
Securities and Exchange Commission
(‘‘Commission’’) is adding, immediately
after the following sentence:
Accordingly, after reviewing the record in
this matter, the Commission believes that
NASD has provided sufficient basis on which
the Commission can find that, under the
Exchange Act, NASD complied with its
Certificate of Incorporation and By-Laws
with respect to the proxy approval process
and that the proposed amendments to its ByLaws were properly approved by NASD
members.
the following paragraph:
PWALKER on PROD1PC71 with NOTICES
This finding as to NASD compliance and
members’’ approval is not a definitive
adjudication under state law, such as a trial
court would make after an evidentiary
hearing, regarding the claim that the proxy
statement was misleading. Except to the
extent that state law informs the
Commission’s finding that, as a federal
matter under the Exchange Act, NASD
complied with its Certificate of Incorporation
and By-Laws with respect to the proxy
approval process and that the proposed
amendments to its By-Laws were properly
approved by NASD members, the
Commission is not purporting to decide a
question of state law. The Commission does
not intend that its determination regarding
the NASD’s uncontradicted prima facie
showing before the Commission that the
proxy statement was not misleading be
binding on a court in a claim based on state
law.
In adding this clarifying language, the
Commission is not vacating, nullifying
or rendering void Release No. 34–56145,
which approved NASD’s proposed rule
change to amend the By-Laws of NASD
to implement governance and related
changes to accommodate the
consolidation of the member firm
1 See Securities Exchange Act Release No. 56145
(July 26, 2007), 72 FR 42169 (August 1, 2007) (FR
Doc. E7–14855).
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places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
By the Commission.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–12631 Filed 6–5–08; 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
1. Purpose
The Exchange proposes to list and
trade the Shares under NYSE Arca
Equities Rule 5.2(j)(3), the Exchange’s
listing standards for Investment
Company Units (‘‘ICUs’’).3
The Fund seeks to provide investment
results that correspond generally to the
price and yield performance, before fees
and expenses, of publicly-traded
securities in the aggregate in the
Japanese market, as represented by the
Tokyo Stock Exchange REIT Index
(‘‘Underlying Index’’ or ‘‘Index’’). The
Underlying Index is a market
capitalization weighted index consisting
of stocks of all of the real estate
investment trusts traded primarily on
the Tokyo Stock Exchange.
The Exchange is submitting this
proposed rule change because the
Underlying Index does not meet all of
the ‘‘generic’’ listing requirements of
Commentary .01(a)(B) to NYSE Arca
Equities Rule 5.2(j)(3) applicable to
listing of ICUs based on international or
global indexes. The Underlying Index
meets all such requirements except for
those set forth in Commentary
.01(a)(B)(2).4 The Exchange represents
that: (1) Except for Commentary
.01(a)(B)(2) to NYSE Arca Equities Rule
5.2(j)(3), the Shares currently satisfy all
of the generic listing standards under
NYSE Arca Equities Rule 5.2(j)(3); (2)
the continued listing standards under
NYSE Arca Equities Rules 5.2(j)(3) and
5.5(g)(2) applicable to ICUs shall apply
to the Shares; and (3) the Trust is
required to comply with Rule 10A–3 5
under the Act for the initial and
continued listing of the Shares. In
addition, the Exchange represents that
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57906; File No. SR–
NYSEArca–2008–40]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to the Listing
and Trading of Shares of the NETS
Tokyo Stock Exchange REIT Index
Fund
June 2, 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 May 22,
2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
‘‘Exchange’’), through its wholly owned
subsidiary, NYSE Arca Equities, Inc.
(‘‘NYSE Arca Equities’’), filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to list and
trade shares (‘‘Shares’’) of the NETSTM
Tokyo Stock Exchange REIT Index Fund
(‘‘Fund’’) issued by the NETS Trust
(‘‘Trust’’). The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, 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
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00095
Fmt 4703
Sfmt 4703
3 An Investment Company Unit is a security that
represents an interest in a registered investment
company that holds securities comprising, or
otherwise based on or representing an interest in,
an index or portfolio of securities (or holds
securities in another registered investment
company that holds securities comprising, or
otherwise based on or representing an interest in,
an index or portfolio of securities). See NYSE Arca
Equities Rule 5.2(j)(3)(A).
4 Commentary .01(a)(B)(2) to NYSE Arca Equities
Rule 5.2(j)(3) provides that component stocks that
in the aggregate account for at least 90% of the
weight of the index or portfolio each shall have a
minimum worldwide monthly trading volume
during each of the last six months of at least
250,000 shares.
5 17 CFR 240.10A–3.
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32378
Federal Register / Vol. 73, No. 110 / Friday, June 6, 2008 / Notices
PWALKER on PROD1PC71 with NOTICES
the Shares will comply with all other
requirements applicable to ICUs
including, but not limited to,
requirements relating to the
dissemination of key information such
as the Index value and Intraday
Indicative Value, rules governing the
trading of equity securities, trading
hours, trading halts, surveillance, and
Information Bulletin to ETP Holders, as
set forth in prior Commission orders
approving the generic listing rules
applicable to the listing and trading of
ICUs.6
As of April 11, 2008, there were 41
stocks in the Index. For the period of
October 2007 up to and including
March 2008, component stocks that in
the aggregate accounted for at least 90%
of the weight of the Index had a
minimum worldwide monthly trading
volume of 2,918 shares.7
In view of the high average price of
the Index component stocks, as noted
above, the Exchange believes it is
appropriate to use global notional
volume traded (number of shares traded
multiplied by price of security) as a
measure of the trading activity of such
stocks. For the period of October 2007
up to and including March 2008,
component stocks that in the aggregate
accounted for 93.42% of the weight of
the Index each had global notional
volume traded per month of at least
$25,000,000, averaged over the last six
months. The Exchange believes that
averaged notional volume traded is an
appropriate measure of the liquidity of
component stocks of the Index.
Specifically, notional volume nullifies
6 See, e.g., Securities Exchange Act Release Nos.
55621 (April 12, 2007), 72 FR 19571 (April 18,
2007) (SR–NYSEArca–2006–86) (approving generic
listing standards for ICUs based on international or
global indexes); 44551 (July 12, 2001), 66 FR 37716
(July 19, 2001) (SR–PCX–2001–14) (approving
generic listing standards for ICUs and Portfolio
Depositary Receipts); and 41983 (October 6, 1999),
64 FR 56008 (October 15, 1999) (SR–PCX–98–29)
(approving rules for the listing and trading of ICUs).
See also email from Michael Cavalier, Associate
General Counsel, NYSE Euronext, to Christopher W.
Chow, Special Counsel, Commission, dated June 2,
2008.
7 During the same period, component stocks that
in the aggregate accounted for at least 90% of the
weight of the Index had an average worldwide
monthly trading volume of 16,693 shares. The
Exchange notes, however, that the average price of
the Index stocks was extremely high compared to
prices of stocks included in index ETFs generally.
As of March 31, 2008, the average price of the
stocks in the Index was approximately $5,350. The
total market capitalization of the Index stocks was
$42,391,307,254 and the average market
capitalization of the Index stocks was
$1,033,934,323. The average market capitalization
of the Index stocks in the top 70% of the Index
weight was $2,015,574,320. There were 15 stocks in
the bottom 10% weight of the Index. The highest
weighted stock was Nippon Building Fund Inc.
REIT, which accounted for 16.25% of the Index
weight.
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16:09 Jun 05, 2008
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the volume discrepancies that generally
occur between low priced and high
priced stocks 8 and averaging the
volume and notional volume over a
specific time period (e.g., six months)
eliminates seasonal volume fluctuations
that may occur in the trading volume of
a particular underlying security
represented in an index.
Detailed descriptions of the Fund, the
Underlying Index, procedures for
creating and redeeming Shares,
transaction fees and expenses,
dividends, distributions, taxes, and
reports to be distributed to beneficial
owners of the Shares can be found in
the Registration Statement 9 or on the
Web site for the Fund (https://
www.netsetfs.com), as applicable.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with Section 6(b)
of the Act,10 in general, and Section
6(b)(5) of the Act,11 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. The Exchange believes that the
proposed rule change will facilitate the
listing and trading of an additional type
of exchange-traded product that will
enhance competition among market
participants, to the benefit of investors
and the marketplace.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange states that written
comments on the proposed rule change
were neither solicited nor received.
8 For example, a stock priced at $10 per share that
trades 2,500,000 shares in a month has a notional
volume of $25,000,000. Conversely, a stock priced
at $100 per share that trades 250,000 shares in a
month has a notional volume of $25,000,000.
9 See the Trust’s Registration Statement on Form
N–1A, dated February 13, 2008 (File Nos. 333–
147077 and 811–22140) (‘‘Registration Statement’’).
10 15 U.S.C. 78f.
11 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reason for so finding or (ii)
as to which the Exchange consents, the
Commission will:
A. by order approve such proposed
rule change, or
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2008–40 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2008–40. This
file number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available
E:\FR\FM\06JNN1.SGM
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Federal Register / Vol. 73, No. 110 / Friday, June 6, 2008 / Notices
for inspection and copying at the
principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2008–40 and
should be submitted on or before June
27, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–12705 Filed 6–5–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57899; File No. SR–Phlx–
2008–40]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Disclaimer of
Warranties and the Listing of $2.50
Strikes for Options on the SIG KCI
Coal IndexTM
PWALKER on PROD1PC71 with NOTICES
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 May 23,
2008, the Philadelphia Stock Exchange,
Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by Phlx.
The Exchange filed the proposal as a
‘‘non-controversial’’ proposed rule
change pursuant to section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
it effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Phlx proposes to add the SIG KCI Coal
IndexTM (‘‘SIG KCI Coal Index’’ or
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
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16:09 Jun 05, 2008
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Phlx included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of those
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
June 2, 2008.
12 17
‘‘Index’’) to Phlx Rule 1101A, Terms of
Options Contracts, regarding listing
options at strike price intervals of $2.50
or greater and to Phlx Rule 1104A, SIG
Indices, LLLP, regarding disclaimer of
express or implied warranties.5 The text
of the proposed rule change is available
at Phlx’s principal office, the
Commission’s Public Reference Room,
and https://www.phlx.com.
1. Purpose
The purpose of the proposed rule
change is to amend Phlx Rules 1101A
and 1104A to include the SIG KCI Coal
Index that was recently licensed by SIG
Indices, LLLP (‘‘Susquehanna’’) to the
Exchange, which would enable the
Exchange to list the index at $2.50 or
greater strike price intervals and limit
Susquehanna’s liability with respect to
the Index. This proposal should
encourage listing such options at
appropriate strike price intervals to the
benefit of investors and should
encourage maintenance of the Index by
Susquehanna so that options overlying
the index may be available for trading.6
Phlx Rule 1101A currently indicates
that the Exchange shall determine fixed
point strike price intervals for index
options at no less than $5.00, provided
that for indexes that are listed in Phlx
Rule 1101A the Exchange may
determine to list strike prices at no less
than $2.50 intervals if the strike price is
less than $200.7 The rule also provides
that such options may be traded at $2.50
5 The SIG Indexes noted herein are trademarks of
SIG Indices, LLLP.
6 The Exchange has recently entered into a
licensing agreement with Susquehanna that would,
among other things, allow the Exchange to list and
trade options on the SIG KCI Coal IndexTM
(‘‘License Agreement’’).
7 See Securities Exchange Act Release No. 54973
(December 20, 2006), 71 FR 78252 (December 28,
2006) (SR–Phlx–2006–82).
PO 00000
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Fmt 4703
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32379
strike price intervals in response to
customer interest or specialist request.
The proposed rule change adds the SIG
KCI Coal Index to the list of indexes in
Phlx Rule 1101A upon which the
Exchange may list options at $2.50
strike price intervals.
Phlx Rule 1104A currently provides
that Susquehanna makes no warranty,
express or implied, as to results to be
obtained by any person or entity from
the use of Susquehanna proprietary
indexes,8 and that Susquehanna makes
no express or implied warranties of
merchantability or fitness for a
particular purpose for use with respect
to any of the named indexes or any data
included therein.9 The proposed rule
change expands the coverage of Phlx
Rule 1104A to include the Index, as
required by the License Agreement.
The Exchange believes that the
proposal should benefit investors by
effectively encouraging the listing and
trading of options on an additional
Susquehanna index at more precise
strike price intervals, thereby expanding
the availability of appropriate
investment choices for investors.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with section 6(b)
of the Act,10 in general, and furthers the
objectives of section 6(b)(5) of the Act,11
in particular, in that it is designed to
foster cooperation and coordination
with persons engaged in regulating,
clearing, settling, processing
information with respect to, and
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. The Exchange believes
that the proposed rule change should
8 The indexes noted in Phlx Rule 1101A include
the SIG Investment Managers IndexTM, the SIG
Cable, Media & Entertainment IndexTM, the SIG
Casino Gaming IndexTM, the SIG Semiconductor
Equipment IndexTM, the SIG Semiconductor Device
IndexTM, the SIG Specialty Retail IndexTM, the SIG
Steel Producers IndexTM, the SIG Footwear &
Athletic IndexTM, the SIG Education IndexTM, the
SIG Restaurant IndexTM, the SIG Coal Producers
IndexTM, and the SIG Energy MLP IndexTM.
9 The Exchange noted in its filing to adopt Phlx
Rule 1104A that the proposed disclaimer was
appropriate given that it was similar to disclaimer
provisions of American Stock Exchange (‘‘AMEX’’)
Rule 902C relating to indexes underlying options
listed on that exchange. See Securities Exchange
Act Release No. 48135 (July 7, 2003), 68 FR 42154
(July 16, 2003) (approving SR–Phlx–2003–21). The
Exchange has proposed amendments similar to the
current proposal to include a new index in Phlx
Rule 1104A. See Securities Exchange Act Release
No. 51664 (May 6, 2005), 70 FR 25641 (May 13,
2005) (SR–Phlx–2005–24).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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]]>Agencies
[Federal Register Volume 73, Number 110 (Friday, June 6, 2008)]
[Notices]
[Pages 32377-32379]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-12705]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57906; File No. SR-NYSEArca-2008-40]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to the Listing and Trading of Shares
of the NETS Tokyo Stock Exchange REIT Index Fund
June 2, 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 May 22, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''),
through its wholly owned subsidiary, NYSE Arca Equities, Inc. (``NYSE
Arca Equities''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to list and trade shares (``Shares'') of the
NETS\TM\ Tokyo Stock Exchange REIT Index Fund (``Fund'') issued by the
NETS Trust (``Trust''). The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
https://www.nyse.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to list and trade the Shares under NYSE Arca
Equities Rule 5.2(j)(3), the Exchange's listing standards for
Investment Company Units (``ICUs'').\3\
---------------------------------------------------------------------------
\3\ An Investment Company Unit is a security that represents an
interest in a registered investment company that holds securities
comprising, or otherwise based on or representing an interest in, an
index or portfolio of securities (or holds securities in another
registered investment company that holds securities comprising, or
otherwise based on or representing an interest in, an index or
portfolio of securities). See NYSE Arca Equities Rule 5.2(j)(3)(A).
---------------------------------------------------------------------------
The Fund seeks to provide investment results that correspond
generally to the price and yield performance, before fees and expenses,
of publicly-traded securities in the aggregate in the Japanese market,
as represented by the Tokyo Stock Exchange REIT Index (``Underlying
Index'' or ``Index''). The Underlying Index is a market capitalization
weighted index consisting of stocks of all of the real estate
investment trusts traded primarily on the Tokyo Stock Exchange.
The Exchange is submitting this proposed rule change because the
Underlying Index does not meet all of the ``generic'' listing
requirements of Commentary .01(a)(B) to NYSE Arca Equities Rule
5.2(j)(3) applicable to listing of ICUs based on international or
global indexes. The Underlying Index meets all such requirements except
for those set forth in Commentary .01(a)(B)(2).\4\ The Exchange
represents that: (1) Except for Commentary .01(a)(B)(2) to NYSE Arca
Equities Rule 5.2(j)(3), the Shares currently satisfy all of the
generic listing standards under NYSE Arca Equities Rule 5.2(j)(3); (2)
the continued listing standards under NYSE Arca Equities Rules
5.2(j)(3) and 5.5(g)(2) applicable to ICUs shall apply to the Shares;
and (3) the Trust is required to comply with Rule 10A-3 \5\ under the
Act for the initial and continued listing of the Shares. In addition,
the Exchange represents that
[[Page 32378]]
the Shares will comply with all other requirements applicable to ICUs
including, but not limited to, requirements relating to the
dissemination of key information such as the Index value and Intraday
Indicative Value, rules governing the trading of equity securities,
trading hours, trading halts, surveillance, and Information Bulletin to
ETP Holders, as set forth in prior Commission orders approving the
generic listing rules applicable to the listing and trading of ICUs.\6\
---------------------------------------------------------------------------
\4\ Commentary .01(a)(B)(2) to NYSE Arca Equities Rule 5.2(j)(3)
provides that component stocks that in the aggregate account for at
least 90% of the weight of the index or portfolio each shall have a
minimum worldwide monthly trading volume during each of the last six
months of at least 250,000 shares.
\5\ 17 CFR 240.10A-3.
\6\ See, e.g., Securities Exchange Act Release Nos. 55621 (April
12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86)
(approving generic listing standards for ICUs based on international
or global indexes); 44551 (July 12, 2001), 66 FR 37716 (July 19,
2001) (SR-PCX-2001-14) (approving generic listing standards for ICUs
and Portfolio Depositary Receipts); and 41983 (October 6, 1999), 64
FR 56008 (October 15, 1999) (SR-PCX-98-29) (approving rules for the
listing and trading of ICUs). See also email from Michael Cavalier,
Associate General Counsel, NYSE Euronext, to Christopher W. Chow,
Special Counsel, Commission, dated June 2, 2008.
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As of April 11, 2008, there were 41 stocks in the Index. For the
period of October 2007 up to and including March 2008, component stocks
that in the aggregate accounted for at least 90% of the weight of the
Index had a minimum worldwide monthly trading volume of 2,918
shares.\7\
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\7\ During the same period, component stocks that in the
aggregate accounted for at least 90% of the weight of the Index had
an average worldwide monthly trading volume of 16,693 shares. The
Exchange notes, however, that the average price of the Index stocks
was extremely high compared to prices of stocks included in index
ETFs generally. As of March 31, 2008, the average price of the
stocks in the Index was approximately $5,350. The total market
capitalization of the Index stocks was $42,391,307,254 and the
average market capitalization of the Index stocks was
$1,033,934,323. The average market capitalization of the Index
stocks in the top 70% of the Index weight was $2,015,574,320. There
were 15 stocks in the bottom 10% weight of the Index. The highest
weighted stock was Nippon Building Fund Inc. REIT, which accounted
for 16.25% of the Index weight.
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In view of the high average price of the Index component stocks, as
noted above, the Exchange believes it is appropriate to use global
notional volume traded (number of shares traded multiplied by price of
security) as a measure of the trading activity of such stocks. For the
period of October 2007 up to and including March 2008, component stocks
that in the aggregate accounted for 93.42% of the weight of the Index
each had global notional volume traded per month of at least
$25,000,000, averaged over the last six months. The Exchange believes
that averaged notional volume traded is an appropriate measure of the
liquidity of component stocks of the Index. Specifically, notional
volume nullifies the volume discrepancies that generally occur between
low priced and high priced stocks \8\ and averaging the volume and
notional volume over a specific time period (e.g., six months)
eliminates seasonal volume fluctuations that may occur in the trading
volume of a particular underlying security represented in an index.
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\8\ For example, a stock priced at $10 per share that trades
2,500,000 shares in a month has a notional volume of $25,000,000.
Conversely, a stock priced at $100 per share that trades 250,000
shares in a month has a notional volume of $25,000,000.
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Detailed descriptions of the Fund, the Underlying Index, procedures
for creating and redeeming Shares, transaction fees and expenses,
dividends, distributions, taxes, and reports to be distributed to
beneficial owners of the Shares can be found in the Registration
Statement \9\ or on the Web site for the Fund (https://
www.netsetfs.com), as applicable.
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\9\ See the Trust's Registration Statement on Form N-1A, dated
February 13, 2008 (File Nos. 333-147077 and 811-22140)
(``Registration Statement'').
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2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act,\10\ in general, and Section 6(b)(5) of the Act,\11\ 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. The Exchange believes that the
proposed rule change will facilitate the listing and trading of an
additional type of exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace.
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\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange states that written comments on the proposed rule
change were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reason for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2008-40 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2008-40. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of the filing also will be available
[[Page 32379]]
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2008-40 and should
be submitted on or before June 27, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Florence E. Harmon,
Acting Secretary.
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\12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-12705 Filed 6-5-08; 8:45 am]
BILLING CODE 8010-01-P
