Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating to SPDR Barclays Capital Convertible Bond ETF, 9860-9862 [E9-4755]
Download as PDF
<![CDATA[
9860
Federal Register / Vol. 74, No. 43 / Friday, March 6, 2009 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59459; File No. SR–
NYSEArca–2009–12]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to SPDR
Barclays Capital Convertible Bond ETF
February 26, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
18, 2009, 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
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, through its whollyowned subsidiary NYSE Arca Equities,
Inc. (‘‘NYSE Arca Equities’’ or
‘‘Corporation’’), proposes to list and
trade shares of the following exchangetraded fund: SPDR® Barclays Capital
Convertible Bond ETF. The text of the
proposed rule change is available on the
Exchange’s Web site at https://
www.nyse.com, at the Exchange’s
principal office and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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.
mstockstill on PROD1PC66 with NOTICES
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 (‘‘Shares’’) of the
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Nov<24>2008
16:20 Mar 05, 2009
Jkt 217001
following fund under NYSE Arca
Equities Rule 5.2(j)(3), the Exchange’s
listing standards for Investment
Company Units (‘‘Units’’): 3 SPDR®
Barclays Capital Convertible Bond ETF
(the ‘‘Fund’’).4
According to the Fund’s Registration
Statement, the Fund’s investment
objective is to provide investment
results that, before fees and expenses,
correspond generally to the price and
yield performance of the Barclays
Capital U.S. Convertible Bond $500MM
Index (the ‘‘Index’’), which aims to track
the performance of the U.S. dollardenominated convertibles markets with
outstanding issue sizes greater than
$500 million. The Index includes the
following major classes of convertible
securities—cash pay bonds, zerocoupon/Original Issue Discount bonds,
preferred securities, and mandatories.
The Fund uses a passive management
strategy designed to track the price and
yield performance of the Index.
According to the Registration Statement,
the Index represents the market of U.S.
convertible bonds. As of December 31,
2008, there were 156 issues included in
the Index. Convertible bonds are bonds
that can be exchanged, at the option of
the holder, for a specific number of
shares of the issuer’s preferred stock or
common stock.
The Exchange is submitting this
proposed rule change because the Index
does not meet all of the ‘‘generic’’ listing
requirements of Commentary .03 to
NYSE Arca Equities Rule 5.2(j)(3)
applicable to listing of Units based on
an index or portfolio of component
securities representing the U.S. equity
market, the international equity market,
and the fixed income market.5 The
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 See the Registration Statement on Form N–1A of
the SPDR Series Trust, dated January 15, 2009 (File
Nos. 333–57793 and 811–08839) (the ‘‘Registration
Statement’’).
5 Commentary .03 to Rule 5.2(j)(3) provides that
the Corporation may list a series of Units based on
a combination of indexes or a portfolio of
component securities representing the U.S. or
domestic equity market, the international equity
market, and the fixed income market for listing and
trading pursuant to Rule 19b–4(e) under the
Securities Exchange Act of 1934 (‘‘Act’’) provided
each index or portfolio of equity and fixed income
component securities separately meet either the
criteria set forth in Commentary .01(a) of Rule
5.2(j)(3) (applicable to Units based on U.S.,
international or global equity indexes or portfolios)
or Commentary .02(a) (applicable to Units based on
a fixed income index or portfolio).
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
Index includes U.S. convertible bonds
and convertible preferred equity
securities. The Index components
consisting of U.S. convertible bonds
separately meet the criteria set forth in
Commentary .02(a) of Rule 5.2(j)(3)
applicable to Units based on a fixed
income index or portfolio. However, the
Index components consisting of
convertible preferred stocks do not
separately meet the criteria set forth in
Commentary .01(a) of Rule 5.2(j)(3)
applicable to Units based on U.S.
indexes or portfolios. As of November
30, 2008, 20.94% of the Index weight
consisted of convertible preferred
stocks. The Index does not meet the
requirements of Commentary
.01(a)(A)(2) in that convertible preferred
stocks accounting for 78.56% of the
weight of the convertible preferred
portion of the Index each had a
minimum worldwide monthly trading
volume during each of the last six
months of at least 250,000 shares, as of
November 30, 2008.6 In addition, the
Index does not meet the requirements of
Commentary .01(a)(A)(5) in that six of
the 31 convertible preferred stocks in
the Index as of November 30, 2008 are
not listed on a national securities
exchange.7 The Exchange represents
that (1) except for Commentary
.01(a)(A)(2) and .01(a)(A)(5) to Rule
5.2(j)(3), the Shares currently satisfy all
other of the generic listing standards
under 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 Units shall apply to the
Shares; and (3) the Trust is required to
comply with Rule 10A–3 8 under the
Act for the initial and continued listing
of the Shares.
The Exchange notes that,
notwithstanding the fact that the Index
does not satisfy all criteria of Rule
5.2(j)(3)(A) applicable to U.S. equity
indexes, the Index components include
issues with substantial market
capitalization. As noted above, the
Index aims to track the performance of
the U.S. convertibles markets with
6 Commentary .01(a)(A)(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.
7 Commentary .01(a)(A)(5) to NYSE Arca Equities
Rule 5.2(j)(3) provides that all securities in the
Index or portfolio shall be US Component Stocks,
as defined in Rule 5.2(j)(3) listed on a national
securities exchange and shall be NMS Stocks as
defined in Rule 600 of regulation NMS under the
Act. The Index does not include non-U.S.
securities. As of November 30, 2008, six convertible
preferred securities in the Index, accounting for 8%
of the Index weight, were traded over-the-counter.
8 17 CFR 240.10A–3.
E:\FR\FM\06MRN1.SGM
06MRN1
Federal Register / Vol. 74, No. 43 / Friday, March 6, 2009 / Notices
mstockstill on PROD1PC66 with NOTICES
outstanding issue sizes greater than
$500 million, and Index components
representing 97.24% of the Index weight
had a market capitalization of $100
million or more as of November 30,
2008. In addition, convertible preferred
stocks have certain characteristics of
fixed income securities (e.g., pricing
influenced by changes in interest rates).
The Exchange notes that the provisions
in Rule 5.2(j)(3), Commentary .02(a)
applicable to Units based on fixed
income indexes include a requirement
relating to minimum principal amount
outstanding, but not a requirement of
minimum trading volume.9 The
Exchange believes that market
capitalization is an appropriate measure
of liquidity for such issues. Finally,
with respect to the six convertible
preferred stocks in the Index that are not
exchange-listed, the Exchange notes that
the parent companies for these issues
are listed on the New York Stock
Exchange.
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 or on the
Web site for the Fund (https://
www.SPDRETFs.com), as applicable.
In addition, the Exchange represents
that the Shares will comply with all
other requirements applicable to Units
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,
firewalls 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 Units.10
9 Rule 5.2(j)(3), Commentary .02(a)(2) provides
that components that in the aggregate account for
at least 75% of the weight of the index or portfolio
each have a minimum original principal amount
outstanding of $100 million or more. As noted
above, Index components representing 97.24% of
the Index weight had a market capitalization of
$100 million or more as of November 30, 2008. The
Exchange also notes that, in its proposed rule
change proposing to adopt Commentary .02 to Rule
5.2(j)(3) (generic listing requirements for Units
based on fixed income indexes), the Exchange
represented that the provisions of Commentary .02
‘‘would not require a minimum trading volume, due
to the lower trading volume that generally occurs
in the fixed income markets as compared to the
equity markets.’’ See Securities Exchange Release
No. 55783 (May 17, 2007), 72 FR 29194 (May 24,
2007) (SR–NYSEArca–2007–36).
10 See, e.g., Securities Exchange Act Release No.
55783 (May 17, 2007), 72 FR 29194 (May 24, 2007)
(SR–NYSEArca–2007–36) (order approving generic
VerDate Nov<24>2008
16:20 Mar 05, 2009
Jkt 217001
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 11 of the Act
in general and furthers the objectives of
Section 6(b)(5) 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
regulating, clearing, settling, processing
information with respect to, and
facilitating transaction in securities,
and, in general to protect investors and
the public interest. 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.13
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 the proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
listing standards for Units based on fixed income
indexes); Securities Exchange Act Release No.
44551 (July 12, 2001), 66 FR 37716 (July 19, 2001)
(SR–PCX–2001–14) (order approving generic listing
standards for Units and Portfolio Depositary
Receipts); Securities Exchange Act Release No.
41983 (October 6, 1999), 64 FR 56008 (October 15,
1999) (SR–PCX–98–29) (order approving rules for
listing and trading of Units).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
13 E-mail from Sudhir Bhattacharyya, Vice
President, NYSE Euronext, to Brian O’Neill,
Attorney, Division of Trading and Markets,
Commission, dated February 26, 2009.
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
9861
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
No. SR–NYSEArca–2009–12 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2009–12. 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, 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–
NYSEArca–2009–12 and should be
submitted on or before March 27, 2009.
E:\FR\FM\06MRN1.SGM
06MRN1
9862
Federal Register / Vol. 74, No. 43 / Friday, March 6, 2009 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–4755 Filed 3–5–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[Release No. 34–59471; File No. SR–
NYSEArca–2009–13]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to the Listing
and Trading of Shares of the iShares®
MSCI All Peru Index Fund
February 27, 2009.
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
20, 2009, 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 and II below, which Items have
been substantially prepared by the
Exchange. NYSE Arca filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NYSE Arca proposes to list and trade
shares (‘‘Shares’’) of the iShares® MSCI
All Peru Index Fund (‘‘Fund’’). The text
of the proposed rule change is available
at the Exchange, the Commission’s
Public Reference Room, and https://
www.nyse.com.
mstockstill on PROD1PC66 with NOTICES
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,
14 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)(6).
1 15
VerDate Nov<24>2008
16:20 Mar 05, 2009
Jkt 217001
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.
1. Purpose
The Exchange proposes to list and
trade the Shares of the following fund
under NYSE Arca Equities Rule 5.2(j)(3),
the Exchange’s listing standards for
Investment Company Units (‘‘ICUs’’): 5
iShares® MSCI All Peru Index Fund.6
According to the Registration Statement,
the Fund seeks investment results that
correspond generally to the price and
yield performance, before fees and
expenses, of the MSCI All Peru Index
(the ‘‘Index’’). The Index is sponsored
by MSCI, Inc., the Index Provider, that
is independent of the Fund and Barclays
Global Fund Advisors, the investment
adviser to the Fund. The Index Provider
determines the composition and relative
weightings of the securities in the Index
and publishes information regarding the
market value of the Index. The Index is
a free float-adjusted market
capitalization index designed to
measure the performance of the ‘‘Broad
Peru Equity Universe.’’ MSCI defines
the Broad Peru Equity Universe by
identifying Peruvian equity securities
that are classified in Peru according to
the MSCI Global Investable Market
Indices Methodology (a methodology
employed by MSCI to construct its
Global Investable Market Indices, which
classifies eligible securities according to
their country of listing) as well as
securities of companies that are
headquartered in Peru and have the
majority of their operations based in
Peru. As of August 31, 2008, the Index’s
three largest constituents were Cia
Minera Milpo SAA, Credicorp Ltd., and
Southern Copper Corporation.
The Exchange is submitting this
proposed rule change because the Index
5 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).
6 See the Trust’s Registration Statement for the
Fund on Form N–1A, dated October 6, 2008 (File
Nos. 333–92935 and 811–09729).
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
for the Fund 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 Index meets all such
requirements except for those set forth
in Commentary .01(a)(B)(2).7 The
Exchange represents that: (1) Except for
the requirement under Commentary
.01(a)(B)(2) to NYSE Arca Equities Rule
5.2(j)(3) that component stocks that in
the aggregate account for at least 90% of
the weight of the index each shall have
a minimum monthly trading volume
during each of the last six months of at
least 250,000 shares, the Shares of the
Fund 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 8 under the
Act 9 for the initial and continued listing
of the Shares. In addition, the Exchange
represents that 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, the rules governing the
trading of equity securities, trading
hours, trading halts, surveillance,10, and
the Information Bulletin to ETP Holders,
as set forth in Exchange rules applicable
to ICUs and in prior Commission orders
approving the generic listing rules
applicable to the listing and trading of
ICUs.11 Detailed descriptions of the
7 The Exchange states that the Index fails to meet
the requirement of Commentary .01(a)(B)(2) to
NYSE Arca Equities Rule 5.2(j)(3) that component
stocks that in the aggregate account for at least 90%
of the weight of the index each shall have a
minimum monthly trading volume of at least
250,000 shares. The Exchange states that, as of
January 30, 2009 component stocks that in the
aggregate account for 89.12% of the Index weight
had a minimum monthly trading volume of at least
250,000 shares.
8 17 CFR 240.10A–3.
9 15 U.S.C. 78a.
10 The Exchange may obtain information for
surveillance purposes via the Intermarket
Surveillance Group (‘‘ISG’’) from other exchanges
who are members of ISG. The Exchange notes that
the Index component stocks do not trade on
markets that are ISG members and the Exchange
does not have a comprehensive surveillance
agreement with such markets. For a list of the
current members of ISG, see www.isgportal.org.
11 See, e.g., Securities Exchange Act Release Nos.
55621 (April 12, 2007), 72 FR 19571 (April 18,
2007) (SR–NYSEArca–2006–86) (order 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) (order approving generic listing standards for
ICUs and Portfolio Depositary Receipts); and 41983
(October 6, 1999), 64 FR 56008 (October 15, 1999)
E:\FR\FM\06MRN1.SGM
06MRN1
]]>Agencies
[Federal Register Volume 74, Number 43 (Friday, March 6, 2009)]
[Notices]
[Pages 9860-9862]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4755]
[[Page 9860]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59459; File No. SR-NYSEArca-2009-12]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to SPDR Barclays Capital Convertible
Bond ETF
February 26, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 18, 2009, 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 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, through its wholly-owned subsidiary NYSE Arca
Equities, Inc. (``NYSE Arca Equities'' or ``Corporation''), proposes to
list and trade shares of the following exchange-traded fund:
SPDR[supreg] Barclays Capital Convertible Bond ETF. The text of the
proposed rule change is available on the Exchange's Web site at https://
www.nyse.com, at the Exchange's principal office and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the 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.
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 (``Shares'') of
the following fund under NYSE Arca Equities Rule 5.2(j)(3), the
Exchange's listing standards for Investment Company Units (``Units''):
\3\ SPDR[supreg] Barclays Capital Convertible Bond ETF (the
``Fund'').\4\
---------------------------------------------------------------------------
\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\ See the Registration Statement on Form N-1A of the SPDR
Series Trust, dated January 15, 2009 (File Nos. 333-57793 and 811-
08839) (the ``Registration Statement'').
---------------------------------------------------------------------------
According to the Fund's Registration Statement, the Fund's
investment objective is to provide investment results that, before fees
and expenses, correspond generally to the price and yield performance
of the Barclays Capital U.S. Convertible Bond $500MM Index (the
``Index''), which aims to track the performance of the U.S. dollar-
denominated convertibles markets with outstanding issue sizes greater
than $500 million. The Index includes the following major classes of
convertible securities--cash pay bonds, zero-coupon/Original Issue
Discount bonds, preferred securities, and mandatories.
The Fund uses a passive management strategy designed to track the
price and yield performance of the Index. According to the Registration
Statement, the Index represents the market of U.S. convertible bonds.
As of December 31, 2008, there were 156 issues included in the Index.
Convertible bonds are bonds that can be exchanged, at the option of the
holder, for a specific number of shares of the issuer's preferred stock
or common stock.
The Exchange is submitting this proposed rule change because the
Index does not meet all of the ``generic'' listing requirements of
Commentary .03 to NYSE Arca Equities Rule 5.2(j)(3) applicable to
listing of Units based on an index or portfolio of component securities
representing the U.S. equity market, the international equity market,
and the fixed income market.\5\ The Index includes U.S. convertible
bonds and convertible preferred equity securities. The Index components
consisting of U.S. convertible bonds separately meet the criteria set
forth in Commentary .02(a) of Rule 5.2(j)(3) applicable to Units based
on a fixed income index or portfolio. However, the Index components
consisting of convertible preferred stocks do not separately meet the
criteria set forth in Commentary .01(a) of Rule 5.2(j)(3) applicable to
Units based on U.S. indexes or portfolios. As of November 30, 2008,
20.94% of the Index weight consisted of convertible preferred stocks.
The Index does not meet the requirements of Commentary .01(a)(A)(2) in
that convertible preferred stocks accounting for 78.56% of the weight
of the convertible preferred portion of the Index each had a minimum
worldwide monthly trading volume during each of the last six months of
at least 250,000 shares, as of November 30, 2008.\6\ In addition, the
Index does not meet the requirements of Commentary .01(a)(A)(5) in that
six of the 31 convertible preferred stocks in the Index as of November
30, 2008 are not listed on a national securities exchange.\7\ The
Exchange represents that (1) except for Commentary .01(a)(A)(2) and
.01(a)(A)(5) to Rule 5.2(j)(3), the Shares currently satisfy all other
of the generic listing standards under 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 Units shall apply to the Shares; and (3)
the Trust is required to comply with Rule 10A-3 \8\ under the Act for
the initial and continued listing of the Shares.
---------------------------------------------------------------------------
\5\ Commentary .03 to Rule 5.2(j)(3) provides that the
Corporation may list a series of Units based on a combination of
indexes or a portfolio of component securities representing the U.S.
or domestic equity market, the international equity market, and the
fixed income market for listing and trading pursuant to Rule 19b-
4(e) under the Securities Exchange Act of 1934 (``Act'') provided
each index or portfolio of equity and fixed income component
securities separately meet either the criteria set forth in
Commentary .01(a) of Rule 5.2(j)(3) (applicable to Units based on
U.S., international or global equity indexes or portfolios) or
Commentary .02(a) (applicable to Units based on a fixed income index
or portfolio).
\6\ Commentary .01(a)(A)(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.
\7\ Commentary .01(a)(A)(5) to NYSE Arca Equities Rule 5.2(j)(3)
provides that all securities in the Index or portfolio shall be US
Component Stocks, as defined in Rule 5.2(j)(3) listed on a national
securities exchange and shall be NMS Stocks as defined in Rule 600
of regulation NMS under the Act. The Index does not include non-U.S.
securities. As of November 30, 2008, six convertible preferred
securities in the Index, accounting for 8% of the Index weight, were
traded over-the-counter.
\8\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------
The Exchange notes that, notwithstanding the fact that the Index
does not satisfy all criteria of Rule 5.2(j)(3)(A) applicable to U.S.
equity indexes, the Index components include issues with substantial
market capitalization. As noted above, the Index aims to track the
performance of the U.S. convertibles markets with
[[Page 9861]]
outstanding issue sizes greater than $500 million, and Index components
representing 97.24% of the Index weight had a market capitalization of
$100 million or more as of November 30, 2008. In addition, convertible
preferred stocks have certain characteristics of fixed income
securities (e.g., pricing influenced by changes in interest rates). The
Exchange notes that the provisions in Rule 5.2(j)(3), Commentary .02(a)
applicable to Units based on fixed income indexes include a requirement
relating to minimum principal amount outstanding, but not a requirement
of minimum trading volume.\9\ The Exchange believes that market
capitalization is an appropriate measure of liquidity for such issues.
Finally, with respect to the six convertible preferred stocks in the
Index that are not exchange-listed, the Exchange notes that the parent
companies for these issues are listed on the New York Stock Exchange.
---------------------------------------------------------------------------
\9\ Rule 5.2(j)(3), Commentary .02(a)(2) provides that
components that in the aggregate account for at least 75% of the
weight of the index or portfolio each have a minimum original
principal amount outstanding of $100 million or more. As noted
above, Index components representing 97.24% of the Index weight had
a market capitalization of $100 million or more as of November 30,
2008. The Exchange also notes that, in its proposed rule change
proposing to adopt Commentary .02 to Rule 5.2(j)(3) (generic listing
requirements for Units based on fixed income indexes), the Exchange
represented that the provisions of Commentary .02 ``would not
require a minimum trading volume, due to the lower trading volume
that generally occurs in the fixed income markets as compared to the
equity markets.'' See Securities Exchange Release No. 55783 (May 17,
2007), 72 FR 29194 (May 24, 2007) (SR-NYSEArca-2007-36).
---------------------------------------------------------------------------
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 or on the Web site for the Fund (https://www.SPDRETFs.com), as
applicable.
In addition, the Exchange represents that the Shares will comply
with all other requirements applicable to Units 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, firewalls 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 Units.\10\
---------------------------------------------------------------------------
\10\ See, e.g., Securities Exchange Act Release No. 55783 (May
17, 2007), 72 FR 29194 (May 24, 2007) (SR-NYSEArca-2007-36) (order
approving generic listing standards for Units based on fixed income
indexes); Securities Exchange Act Release No. 44551 (July 12, 2001),
66 FR 37716 (July 19, 2001) (SR-PCX-2001-14) (order approving
generic listing standards for Units and Portfolio Depositary
Receipts); Securities Exchange Act Release No. 41983 (October 6,
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order
approving rules for listing and trading of Units).
---------------------------------------------------------------------------
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \11\ of
the Act in general and furthers the objectives of Section 6(b)(5) \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 regulating, clearing, settling, processing
information with respect to, and facilitating transaction in
securities, and, in general to protect investors and the public
interest. 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.\13\
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ E-mail from Sudhir Bhattacharyya, Vice President, NYSE
Euronext, to Brian O'Neill, Attorney, Division of Trading and
Markets, Commission, dated February 26, 2009.
---------------------------------------------------------------------------
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 the 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 No. SR-NYSEArca-2009-12 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2009-12. 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, 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-NYSEArca-2009-12 and should be submitted on or before
March 27, 2009.
[[Page 9862]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4755 Filed 3-5-09; 8:45 am]
BILLING CODE 8011-01-P
