Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Revising NYSE Arca Rule 5.3 To Enable the Listing and Trading of Options on Managed Fund Shares, 63534-63536 [E8-25372]

Download as PDF 63534 Federal Register / Vol. 73, No. 207 / Friday, October 24, 2008 / Notices across all tapes on NSX for the period beginning October 9, 2008 and ending October 31, 2008, the period when the new Fee Schedule (after effectiveness of the instant modification) was in effect. Thereafter, Liquidity Adding ADV will be calculated based on the number of shares an ETP Holder has executed as a liquidity provider on average per trading day (excluding partial trading days and securities under one dollar) across all tapes on NSX for the calendar month in which the executions occurred. Notice will be provided to ETP Holders respecting the calculation of the Liquidity Adding ADV. For purposes of clarity, the proposed rule change proposes no modifications to the fees and rebates relating to any trades in Order Delivery Mode. and quotes in AutoEx Mode in all tapes and may do so attheir discretion. Rationale The proposed rule change has taken effect upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act 8 and subparagraph (f)(2) of Rule 19b–4 9 thereunder, because, as provided in (f)(2), it ‘‘changes a due, fee or other charge applicable only to a member’’ (known on the Exchange as an ETP Holder). At any time within sixty (60) days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. The Exchange has determined that these changes are necessary to increase the revenue of the Exchange and to adequately fund its regulatory and general business functions. The proposed modification is reasonable and equitably allocated to those ETP Holders that opt to take liquidity in AutoEx Mode, and is not discriminatory because ETP Holders are free to elect whether to send orders in all tapes through the AutoEx Mode as liquidity taking trades and quotes. Based upon the information above, the Exchange believes that the proposed rule change is consistent with the protection of investors and the public interest. Notice Pursuant to Exchange Rule 16.1(c), the Exchange will ‘‘provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange’’ through the issuance of a Regulatory Circular of the changes to the Fee Schedule and will provide a copy of the rule filing on the Exchange’s Web site (www.nsx.com). jlentini on PROD1PC65 with NOTICES 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the provisions of Section 6(b) of the Act,6 in general, and Section 6(b)(4) of the Act,7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using the facilities of the Exchange. Moreover, the proposed fee and rebate structure is not discriminatory in that all ETP Holders are eligible to submit (or not submit) liquidity taking trades B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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: Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NSX–2008–18 and should be submitted on or before November 14, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Acting Secretary. [FR Doc. E8–25375 Filed 10–23–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–58799; File No. SR– NYSEArca–2008–108] • 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–NSX–2008–18 on the subject line. Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Revising NYSE Arca Rule 5.3 To Enable the Listing and Trading of Options on Managed Fund Shares 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–NSX–2008–18. This file number should be included on the subject line if e-mail is used. To help the October 16, 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 October 9, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and 10 17 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 16:48 Oct 23, 2008 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 240.19b–4(f)(2). Jkt 217001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\24OCN1.SGM 24OCN1 Federal Register / Vol. 73, No. 207 / Friday, October 24, 2008 / Notices III below, which Items have been 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 revise NYSE Arca Rule 5.3 to enable the listing and trading of options on Managed Fund Shares. 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. jlentini on PROD1PC65 with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to revise NYSE Arca Rule 5.3 to enable the listing and trading of options on managed fund shares (‘‘Managed Fund Shares’’) that are listed and traded on a national securities exchange and are considered to be an ‘‘NMS Stock’’ (as defined in Rule 600 of Regulation NMS under the Securities and Exchange Act of 1934 (the ‘‘Act’’)). Managed Fund Shares represent an interest in a registered investment company (‘‘Investment Company’’) organized as an open-end management investment company or similar entity. Unlike traditional exchange traded funds Managed Fund Shares are actively managed. Managed Fund Shares, although, based upon a publicly disclosed portfolio of securities, each trade as a single exchange-listed equity security. Accordingly, rules pertaining to the listing and trading of standard equity options will apply to Managed Fund Shares. Listing Criteria The Exchange will consider listing and trading options on Managed Fund VerDate Aug<31>2005 16:48 Oct 23, 2008 Jkt 217001 Shares provided the Managed Fund Shares meet (1) the criteria for underlying securities set forth in NYSE Arca Rule 5.3(a) 3 –(b),4 or (2) the Managed Fund Shares are available for creation and redemption each business day as set forth in NYSE Arca Rule 5.3(g)(1)(B). The Exchange proposes that Managed Fund Shares deemed appropriate for options trading represent an interest in an open-end management investment company or similar entity, as described below: Managed Fund Shares are securities that represents an interest in a registered investment company (‘‘Investment Company’’) organized as an open-end management investment company or similar entity, that invests in a portfolio of securities selected by the Investment Company’s investment adviser consistent with the Investment Company’s investment objectives and policies, which is issued in a specified aggregate minimum number in return for a deposit of a specified portfolio of securities and/or a cash amount with a value equal to the next determined net asset value (‘‘NAV’’), and when aggregated in the same specified minimum number, may be redeemed at a holder’s request, which holder will be paid a specified portfolio of securities and/or cash with a value equal to the next determined NAV. For the purposes of NYSE Arca Rule 5.3(g)(v), Managed Fund Shares are a class of exchange-traded fund shares that are actively managed as defined in NYSE Arca Equities Rule 8.600.5 Continued Listing Requirements Options on Managed Fund Shares will be subject to all Exchange rules governing the trading of equity options and furthermore, the rules pertaining to position and exercise limits 6 or margin 7 3 See NYSE Arca Rule 5.3(a) which sets forth minimum requirements for the underlying security which include, but are not limited to, 7,000,000 underlying shares, 2,000 shareholders, and trading volume of 2,400,000 shares over the preceding twelve months. 4 See NYSE Arca Rule 5.3(b) which states that the underlying securities shall be registered and be an ‘‘NMS Stock’’ as defined in Rule 600 of Regulation NMS under the Act. 5 See NYSE Arca Equities Rule 8.600 and Securities and Exchange Release No. 57619 (April 4, 2008), 73 FR 19544 (April 10, 2008) (SR– NYSEArca–2008–25) approving rules permitting the listing and trading of Managed Fund Shares. 6 Pursuant to NYSE Arca Rule 6.8, Commentary .05 and .06, Managed Fund Shares are subject to the same position limits applicable to options on stocks and Exchange-Traded Fund Shares. NYSE Arca Rule 6.9 stipulates that exercise limits for options on stocks and other securities, including Managed Fund Shares, shall be the same as the position limits applicable under NYSE Arca Rule 6.8. 7 See NYSE Arca Rules 4.15(a)–4.16(d), the Exchange’s rules governing margin. PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 63535 shall apply. The current continuing or maintenance listing standards for options traded on NYSE Arca will continue to apply. The Exchange will utilize its existing surveillance procedures applicable to options on exchange traded funds (which will include Managed Fund Shares) to monitor trading. In addition, the Exchange will implement any new surveillance procedures it deems necessary to effectively monitor the trading of options on Managed Fund Shares, including adequate comprehensive surveillance sharing agreements (‘‘CSSA’’) with markets trading in non-U.S. components,8 as applicable. Also, the Exchange may obtain trading information via the Intermarket Surveillance Group (‘‘ISG’’) 9 from other exchanges who are members or affiliates of the ISG. NYSE Arca represents that these procedures will be adequate to properly monitor Exchange trading of options on these the securities and to deter and detect violations of Exchange rules. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) 10 of the Securities Exchange Act of 1934 (‘‘Act’’) in general, and furthers the objectives of 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, and, in general, to protect investors and the public interest. The Exchange believes that the proposed rules applicable to trading pursuant to generic listing and trading criteria, together with the Exchange’s surveillance procedures applicable to trading in the securities covered by the proposed rules, serve to foster investor protection. 8 See NYSE Arca Rule 5.3(g)(2), the Exchange’s rule governing the applicable CSSA requirements for options on exchange-traded funds. We note that any non-U.S. component securities (including fixed-income) in an index or portfolio of securities on which the Fund Shares are based that are not subject to comprehensive surveillance agreements may in the aggregate represent an amount equal to 50% of the weight of the index or portfolio. 9 A complete list of the current members of the ISG, is available at https://www.isgportal.org. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). E:\FR\FM\24OCN1.SGM 24OCN1 63536 Federal Register / Vol. 73, No. 207 / Friday, October 24, 2008 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. 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 reasons 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: with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2008–108 and should be submitted on or before November 14, 2008. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt rules to permit the trading of Rate-Modified Foreign Currency Options (‘‘FCOs’’). The text of the proposed rule change is available at NYSE Arca, the Commission’s Public Reference Room, and www.nyse.com. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Acting Secretary. [FR Doc. E8–25372 Filed 10–23–08; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58800; File No. SR– NYSEArca–2008–109] jlentini on PROD1PC65 with NOTICES 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–2008–108 on the subject line. Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Adopt Rules To Permit the Trading of Rate-Modified Foreign Currency Options 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–2008–108. 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 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 October 10, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘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 prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. VerDate Aug<31>2005 16:48 Oct 23, 2008 Jkt 217001 October 16, 2008. 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 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 self-regulatory organization 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. 1. Purpose The purpose of the proposed rule change is to adopt rules enabling the Exchange to list and trade FCOs. The Exchange proposes to adopt rules for the listing and trading of cash-settled FCOs on the following currencies: the euro, the British pound, the Australian dollar, the New Zealand dollar, the Japanese yen, the Canadian dollar, the Swiss franc, the Chinese renminbi, the Mexican peso, the Swedish krona, the Russian ruble, the South African rand, the Brazilian real, the Israeli shekel, the Norwegian krone, the Polish zloty, the Hungarian forint, the Czech koruna, and the Korean won (individually, a ‘‘currency’’ and collectively, the ‘‘Currencies’’).3 The Exchange notes that the Philadelphia Stock Exchange (‘‘PHLX’’) currently has rules that permit the listing and trading of both physicallysettled FCOs and U.S. Dollar-settled FCOs on a number of foreign currencies.4 FCOs listed and traded by the Exchange pursuant to this proposed rule change will not be fungible with 3 Except as noted herein, FCO’s would, in all other respects, be traded pursuant to the Exchange’s existing trading rules and procedures and be covered under the Exchange’s existing surveillance program. 4 See Securities Exchange Act release No. 54989 (December 21, 2006), 71 FR 78506 (December 29, 2006) (SR–PHLX–2006–34). See also PHLX rules 1000–1093. E:\FR\FM\24OCN1.SGM 24OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 207 (Friday, October 24, 2008)]
[Notices]
[Pages 63534-63536]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25372]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58799; File No. SR-NYSEArca-2008-108]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Revising NYSE Arca Rule 5.3 To Enable the 
Listing and Trading of Options on Managed Fund Shares

October 16, 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 October 9, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and

[[Page 63535]]

III below, which Items have been 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 revise NYSE Arca Rule 5.3 to enable the 
listing and trading of options on Managed Fund Shares. 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 purpose of the proposed rule change is to revise NYSE Arca Rule 
5.3 to enable the listing and trading of options on managed fund shares 
(``Managed Fund Shares'') that are listed and traded on a national 
securities exchange and are considered to be an ``NMS Stock'' (as 
defined in Rule 600 of Regulation NMS under the Securities and Exchange 
Act of 1934 (the ``Act'')).
    Managed Fund Shares represent an interest in a registered 
investment company (``Investment Company'') organized as an open-end 
management investment company or similar entity. Unlike traditional 
exchange traded funds Managed Fund Shares are actively managed. Managed 
Fund Shares, although, based upon a publicly disclosed portfolio of 
securities, each trade as a single exchange-listed equity security.
    Accordingly, rules pertaining to the listing and trading of 
standard equity options will apply to Managed Fund Shares.
Listing Criteria
    The Exchange will consider listing and trading options on Managed 
Fund Shares provided the Managed Fund Shares meet (1) the criteria for 
underlying securities set forth in NYSE Arca Rule 5.3(a) \3\ -(b),\4\ 
or (2) the Managed Fund Shares are available for creation and 
redemption each business day as set forth in NYSE Arca Rule 
5.3(g)(1)(B). The Exchange proposes that Managed Fund Shares deemed 
appropriate for options trading represent an interest in an open-end 
management investment company or similar entity, as described below:
---------------------------------------------------------------------------

    \3\ See NYSE Arca Rule 5.3(a) which sets forth minimum 
requirements for the underlying security which include, but are not 
limited to, 7,000,000 underlying shares, 2,000 shareholders, and 
trading volume of 2,400,000 shares over the preceding twelve months.
    \4\ See NYSE Arca Rule 5.3(b) which states that the underlying 
securities shall be registered and be an ``NMS Stock'' as defined in 
Rule 600 of Regulation NMS under the Act.
---------------------------------------------------------------------------

    Managed Fund Shares are securities that represents an interest in a 
registered investment company (``Investment Company'') organized as an 
open-end management investment company or similar entity, that invests 
in a portfolio of securities selected by the Investment Company's 
investment adviser consistent with the Investment Company's investment 
objectives and policies, which is issued in a specified aggregate 
minimum number in return for a deposit of a specified portfolio of 
securities and/or a cash amount with a value equal to the next 
determined net asset value (``NAV''), and when aggregated in the same 
specified minimum number, may be redeemed at a holder's request, which 
holder will be paid a specified portfolio of securities and/or cash 
with a value equal to the next determined NAV.
    For the purposes of NYSE Arca Rule 5.3(g)(v), Managed Fund Shares 
are a class of exchange-traded fund shares that are actively managed as 
defined in NYSE Arca Equities Rule 8.600.\5\
---------------------------------------------------------------------------

    \5\ See NYSE Arca Equities Rule 8.600 and Securities and 
Exchange Release No. 57619 (April 4, 2008), 73 FR 19544 (April 10, 
2008) (SR-NYSEArca-2008-25) approving rules permitting the listing 
and trading of Managed Fund Shares.
---------------------------------------------------------------------------

Continued Listing Requirements
    Options on Managed Fund Shares will be subject to all Exchange 
rules governing the trading of equity options and furthermore, the 
rules pertaining to position and exercise limits \6\ or margin \7\ 
shall apply. The current continuing or maintenance listing standards 
for options traded on NYSE Arca will continue to apply.
---------------------------------------------------------------------------

    \6\ Pursuant to NYSE Arca Rule 6.8, Commentary .05 and .06, 
Managed Fund Shares are subject to the same position limits 
applicable to options on stocks and Exchange-Traded Fund Shares. 
NYSE Arca Rule 6.9 stipulates that exercise limits for options on 
stocks and other securities, including Managed Fund Shares, shall be 
the same as the position limits applicable under NYSE Arca Rule 6.8.
    \7\ See NYSE Arca Rules 4.15(a)-4.16(d), the Exchange's rules 
governing margin.
---------------------------------------------------------------------------

    The Exchange will utilize its existing surveillance procedures 
applicable to options on exchange traded funds (which will include 
Managed Fund Shares) to monitor trading. In addition, the Exchange will 
implement any new surveillance procedures it deems necessary to 
effectively monitor the trading of options on Managed Fund Shares, 
including adequate comprehensive surveillance sharing agreements 
(``CSSA'') with markets trading in non-U.S. components,\8\ as 
applicable. Also, the Exchange may obtain trading information via the 
Intermarket Surveillance Group (``ISG'') \9\ from other exchanges who 
are members or affiliates of the ISG. NYSE Arca represents that these 
procedures will be adequate to properly monitor Exchange trading of 
options on these the securities and to deter and detect violations of 
Exchange rules.
---------------------------------------------------------------------------

    \8\ See NYSE Arca Rule 5.3(g)(2), the Exchange's rule governing 
the applicable CSSA requirements for options on exchange-traded 
funds. We note that any non-U.S. component securities (including 
fixed-income) in an index or portfolio of securities on which the 
Fund Shares are based that are not subject to comprehensive 
surveillance agreements may in the aggregate represent an amount 
equal to 50% of the weight of the index or portfolio.
    \9\ A complete list of the current members of the ISG, is 
available at https://www.isgportal.org.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \10\ of the Securities Exchange Act of 1934 (``Act'') 
in general, and furthers the objectives of 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, and, in general, to protect 
investors and the public interest. The Exchange believes that the 
proposed rules applicable to trading pursuant to generic listing and 
trading criteria, together with the Exchange's surveillance procedures 
applicable to trading in the securities covered by the proposed rules, 
serve to foster investor protection.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).

---------------------------------------------------------------------------

[[Page 63536]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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 reasons 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-2008-108 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-2008-108. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2008-108 and should 
be submitted on or before November 14, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-25372 Filed 10-23-08; 8:45 am]
BILLING CODE 8011-01-P

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