Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Listing and Trading of Bear Market Strategic Accelerated Redemption Securities® Linked to the S&P Small Cap Regional Banks Index, 10111-10114 [E9-4877]

Download as PDF Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / 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 The proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 16 and Rule 19b–4(f)(6) thereunder 17 because the foregoing proposed rule: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not become operative for 30 days after the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest.18 The Exchange believes that this filing is non-controversial because it is consistent with its filing implementing the Options Relocation,19 as well as the Exchange’s current regulatory controls governing the use of personal portable or wireless communications devices and wireless trading devices, which were approved by the Commission. Accordingly, the Exchange believes that these rule changes are eligible for immediately effective treatment under the Commission’s Streamlining Order.20 The Exchange has asked the Commission to waive the 30-day operative delay and designate the proposed rule change as operative upon filing so that the proposed rule changes may become effective upon filing and operative on the date of the Options 16 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 18 In addition, Rule 19b–4(f)(6)(iii) requires the self-regulatory organization to give the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. NYSE Alternext has satisfied this requirement. 19 See Securities Exchange Act Release No. 59142 (December 22, 2008), 73 FR 80494 (December 31, 2008) (SR–NYSEALTR–2008–14), as amended. 20 See Securities Exchange Act Release No. 58092 (July 3, 2008), 73 FR 40143 [sic] (July 11, 2008) (concerning 17 CFR parts 200 and 241). dwashington3 on PROD1PC60 with NOTICES 17 17 VerDate Nov<24>2008 15:28 Mar 06, 2009 Jkt 217001 10111 Relocation, currently scheduled for March 2, 2009. The Commission hereby grants the Exchange’s request.21 The Commission believes that such action is consistent with the protection of investors and the public interest because the Exchange’s proposal would clarify the Exchange’s policies governing the use of personal portable or wireless communication devices as well as wireless trading devices. This clarification is necessitated by the Options Relocation. At any time within 60 days of the filing of the 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. Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–NYSEALTR–2009–21 and should be submitted on or before March 30, 2009. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–4872 Filed 3–6–09; 8:45 am] 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–NYSEALTR–2009–21 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–NYSEALTR–2009–21. 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 21 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P [Release No. 34–59493; File No. SR– NYSEArca–2009–18] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Listing and Trading of Bear Market Strategic Accelerated Redemption Securities® Linked to the S&P Small Cap Regional Banks Index March 3, 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 March 2, 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) 22 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). 1 15 E:\FR\FM\09MRN1.SGM 09MRN1 10112 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Notices 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 The Exchange proposes to list and trade Bear Market Strategic Accelerated Redemption Securities® Linked to the S&P Small Cap Regional Banks Index (‘‘Notes’’) under NYSE Arca Equities Rule 5.2(j)(6). The text of the proposed rule change is available at https:// www.nyse.com, the Exchange and the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item 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 Notes 5 under NYSE Arca Equities Rule 5.2(j)(6), which includes the Exchange’s listing standards for Equity Index-Linked Securities.6 According to the Registration Statement, the Notes are Bank of America Corporation (‘‘BAC’’ or the ‘‘issuer’’) senior unsecured debt securities and are not guaranteed or insured by the Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally with all of the issuer’s other unsecured and unsubordinated debt, and any payments due on the 4 17 CFR 240.19b–4(f)(6). registration statement on Form S–3 filed with the Securities and Exchange Commission on May 5, 2006 (Registration No. 333–133852); Product Supplement No. STR–1, dated January 2, 2009 (‘‘Product Supplement No. STR–1’’); Series L Prospectus Supplement dated April 10, 2008; and Preliminary Term Sheet, subject to completion, dated January 29, 2009 (‘‘Registration Statement’’). 6 Equity Index-Linked Securities are securities that provide for the payment at maturity of a cash amount based on the performance of an underlying index or indexes of equity securities. dwashington3 on PROD1PC60 with NOTICES 5 See VerDate Nov<24>2008 15:28 Mar 06, 2009 Jkt 217001 Notes, including any repayment of principal, will be subject to the credit risk of BAC. The Notes are designed for, but not limited to, investors who anticipate that the Observation Level 7 of the S&P Small Cap Regional Banks Index (the ‘‘Index’’) on any Observation Date will be less than or equal to the Call Level. The Notes provide for an automatic call if the Observation Level of the Index on any Observation Date is less than or equal to the Call Level. The Notes will be called at an amount equal to the $10 principal amount per unit plus the Call Premium of between 15% and 19% per annum if the closing level of the Index on any Observation Date is less than or equal to 100% of its starting value. The Notes have a maturity of approximately 18 months. There will be a one-to-one downside loss if the Notes are not called prior to maturity and the closing level of the Index increases above a Threshold Value, with up to 100% of the principal amount at risk. There are no periodic interest payments. The Index is a capitalization weighted index. The Index is a sub-index of the S&P SmallCap 600 Index and is comprised of the regional banks included in the ‘‘Financials’’ sector of the S&P SmallCap 600 Index. Regional banks are defined as commercial banks whose businesses are derived primarily from commercial lending operations and have significant business activity in retail banking and small and medium corporate lending. Regional banks tend to operate in limited geographic regions. The Index excludes companies classified according to the Global Industry Classification Standard (‘‘GICS’’) in the Diversified Banks and Thrifts & Mortgage Banks sub-industries and also excludes investment banks classified in the Investment Banking & Brokerage Sub-Industry. The GICS methodology has been widely accepted as an industry analysis framework for investment research, portfolio management, and asset allocation. The Index was developed with a base value of 100 as of December 31, 1993. Of the companies included in the S&P SmallCap 600 Index, 41 were included in the Index as of January 15, 2009. The Exchange is submitting this proposed rule change because the Index for the Fund does not meet all of the ‘‘generic’’ listing requirements of NYSE Arca Equities Rule 5.2(j)(6) applicable to listing of all Equity Index-Linked Securities. The Index meets all such requirements except for those set forth 7 Capitalized terms used but not defined herein have the meanings set forth in Product Supplement No. STR–1. PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 in Rule 5.2(j)(6)(B)(I)(1)(b)(i).8 The Exchange represents that: (1) Except for the requirement under 5.2(j)(6)(B)(I)(1)(b)(i), the Notes currently satisfy all of the generic listing standards under NYSE Arca Equities Rule 5.2(j)(6); and (2) BAC is required to comply with Rule 10A–3 under the Act 9 for the initial and continued listing of the Notes. In addition, the Exchange represents that the Notes will comply with all other requirements applicable to Equity Index-Linked Securities, including, but not limited to, requirements relating to the dissemination of key information such as the Index value, rules governing the trading of equity securities, trading hours, trading halts, surveillance,10 and Information Bulletin to ETP Holders, as set forth in Exchange rules applicable to Equity Index-Linked Securities and in prior Commission orders approving the generic listing rules applicable to the listing and trading of Equity IndexLinked Securities.11 Detailed descriptions of the Notes, the Index (including the methodology used to determine the composition of the Index), fees, redemption procedures and payment at redemption, payment at maturity, taxes, and risk factors relating to the Notes are available in the Registration Statement. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the 8 Rule 5.2(j)(6)(B)(I)(1)(b)(i) requires that each component security in the index to which the security is linked has a minimum market value of at least $75 million, except that for each of the lowest dollar weighted component securities in the index that in the aggregate account for no more than 10% of the dollar weight of the index, the market value can be at least $50 million. The Exchange states that, as of February 20, 2009, the Index fails to meet the requirement of Rule 5.2(j)(6)(B)(I)(1)(b)(i) in that, with respect to each of the lowest dollar weighted component securities in the Index that in the aggregate account for no more than 10% of the dollar weight of the Index, two securities, accounting for a total of 0.35% of the Index weight, have a market value of less than $50 million. These two Index securities have a market value of approximately $32 million and $25 million, respectively. Index components comprising the top 90% of the Index weight have a market value of at least $75 million. In addition, 99.65% of the total Index weight is comprised of securities with a market value of at least $50 million. The average and median market capitalization of Index stocks is $406 million and $349.7 million, respectively, as of February 20, 2009. 9 17 CFR 240.10A–3. 10 The Exchange may obtain information for surveillance purposes via the Intermarket Surveillance Group (‘‘ISG’’) from other exchanges who are members of ISG. For a list of the current members of ISG, see https://www.isgportal.org. 11 See, e.g., Securities Exchange Act Release No. 56637 (October 10, 2007), 72 FR 58704 (October 16, 2007) (SR–NYSEArca–2007–92) (order approving generic listing standards under NYSE Arca Equities Rule 5.2(j)(6)). E:\FR\FM\09MRN1.SGM 09MRN1 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Notices Act,12 in general, and furthers the objectives of Section 6(b)(5),13 in particular, in that it is designed to prevent fraudulent and manipulative 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 mechanisms of, a free and open market and a national market system. The proposed rule change will allow the listing and trading of the Notes on the Exchange, which the Exchange believes 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 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 Because the foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) 14 of the Act and subparagraph (f)(6) of Rule 19b–4 15 thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 16 normally does not become operative for 30 days after the date of filing. However, Rule 19b– 12 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled the pre-filing requirement. 16 17 CFR 240.19b–4(f)(6). dwashington3 on PROD1PC60 with NOTICES 13 15 VerDate Nov<24>2008 15:28 Mar 06, 2009 Jkt 217001 4(f)(6)(iii),17 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that the proposed rule change does not significantly affect the protection of investors or the public interest and does not impose any significant burden on competition. NYSE Arca believes that the proposed rule change is non-controversial in that the Index for the Notes fail to meet the requirements set forth in NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(i) by only a small amount: Two securities accounting for a total of .35% of the Index weight have a market value of less than 50 million and the top 90% of the Index weight have a market value of $75 million. The Notes currently satisfy all of the other applicable generic listing standards under NYSE Arca Equities Rule 5.2(j)(6) and all other requirements applicable to Index-Linked Securities and, in particular, Equity Index-Linked Securities, as set forth in Exchange rules and prior Commission orders approving the generic listing rules applicable to the listing and trading of Index-Linked Securities. In addition, the Exchange believes that it has developed adequate trading rules, procedures, surveillance programs, and listing standards for the continued listing and trading of the Notes. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest.18 Given that the Notes comply with all of the NYSE Arca Equities generic listing standards for Equity Index-Linked Securities (except for narrowly missing the requirement that lowest dollar weighted component securities in the Index have a market value of at least $50 million), the listing and trading of the Notes by NYSE Arca does not appear to present any novel or significant regulatory issues or impose any significant burden on competition. For these reasons, the Commission designates the proposed rule change as operative upon filing. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is 17 17 CFR 240.19b–4(f)(6)(iii). purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 18 For PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 10113 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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–2009–18 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2009–18. 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–2009–18 and should be submitted on or before March 30, 2009. E:\FR\FM\09MRN1.SGM 09MRN1 10114 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–4877 Filed 3–6–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59482; File No. SR– NYSEALTR–2009–13] Self-Regulatory Organizations; NYSE Alternext U.S. LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending NYSE Alternext Equities Rule 17 To Address Issues Related to Vendor Liability and To Make Amendments and Conforming Changes to NYSE Alternext Equities Rule 18 March 2, 2009. Pursuant to Section 19(b)(1)1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on February 17, 2009, NYSE Alternext U.S. LLC (‘‘Exchange’’ or ‘‘NYSE Alternext’’) 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 self-regulatory organization. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) 4 of the Act and Rule 19b–4(f)(6) thereunder,5 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. dwashington3 on PROD1PC60 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Alternext Equities Rule 17 (‘‘Use of Exchange Facilities’’) to address issues related to vendor liability. The Exchange also seeks to make amendments and conforming changes to NYSE Alternext Equities Rule 18 (‘‘Compensation in Relation to Exchange System Failure’’). The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and https:// www.nyse.com. 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). 1 15 VerDate Nov<24>2008 15:28 Mar 06, 2009 Jkt 217001 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Alternext Equities Rule 17 (‘‘Use of Exchange Facilities’’) to address issues related to vendor liability. Specifically, the proposed rule would require that member organizations that have trading losses due to malfunctions of third-party systems provided by the Exchange submit such losses to the Exchange’s compensation fund prior to pursuing legal remedies against the third-party vendors that provided these systems.6 The Exchange also seeks to make amendments and conforming changes to NYSE Alternext Equities Rule 18 (‘‘Compensation in Relation to Exchange System Failure’’). Specifically, the Exchange seeks to include in the definition of ‘‘Exchange system failure’’ the malfunction of a third-party system or technology provided by the Exchange, i.e., vendor and/or subcontractor systems and to codify a net loss requirement for members or member organizations that seek compensation for losses sustained from an Exchange system failure. These amendments are proposed to conform to amendments filed by the New York Stock Exchange (‘‘NYSE’’).7 Background As described more fully in a related rule filing,8 NYSE Euronext acquired The Amex Membership Corporation (‘‘AMC’’) pursuant to an Agreement and 6 See E-mail from Jennifer D. Kim, Counsel, Office of the General Counsel, Exchange, to Michou H.M. Nguyen, Special Counsel, Division of Trading and Markets, Commission, on March 2, 2009. 7 See SR–NYSE–2009–16 (to be filed on February 17, 2009). 8 See Securities Exchange Act Release No. 58673 (September 29, 2008), 73 FR 57707 (October 3, 2008) (SR–NYSE–2008–60 and SR–Amex 2008–62) (approving the Merger). PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 Plan of Merger, dated January 17, 2008 (the ‘‘Merger’’). In connection with the Merger, the Exchange’s predecessor, the American Stock Exchange LLC (‘‘Amex’’), a subsidiary of AMC, became a subsidiary of NYSE Euronext called NYSE Alternext U.S. LLC, and continues to operate as a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the ‘‘Act’’).9 The effective date of the Merger was October 1, 2008. In connection with the Merger, on December 1, 2008, the Exchange relocated all equities trading conducted on the Exchange legacy trading systems and facilities located at 86 Trinity Place, New York, New York, to trading systems and facilities located at 11 Wall Street, New York, New York (the ‘‘Equities Relocation’’). The Exchange’s equity trading systems and facilities at 11 Wall Street (the ‘‘NYSE Alternext Trading Systems’’) are operated by the NYSE on behalf of the Exchange.10 As part of the Equities Relocation, NYSE Alternext adopted NYSE Rules 1– 1004, subject to such changes as necessary to apply the Rules to the Exchange, as the NYSE Alternext Equities Rules to govern trading on the NYSE Alternext Trading Systems.11 The NYSE Alternext Equities Rules, which became operative on December 1, 2008, are substantially identical to the current NYSE Rules 1–1004 and the Exchange continues to update the NYSE Alternext Equities Rules as necessary to conform with rule changes to corresponding NYSE Rules filed by the NYSE. Proposed Amendments Currently, NYSE Alternext Equities Rule 17 provides that the Exchange shall not be liable for any damages sustained by a member or member organization growing out of the use or 9 15 U.S.C. 78f. Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). 11 See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation); Securities Exchange Act Release No. 58833 (October 22, 2008), 73 FR 64642 (October 30, 2008) (SR–NYSE–2008–106) and Securities Exchange Act Release No. 58839 (October 23, 2008), 73 FR 64645 (October 30, 2008) (SR–NYSEALTR– 2008–03) (together, approving the Bonds Relocation); Securities Exchange Act Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3, 2008) (SR–NYSEALTR–2008–10) (adopting amendments to NYSE Alternext Equities Rules to track changes to corresponding NYSE Rules); Securities Exchange Act Release No. 59027 (November 28, 2008), 73 FR 73681 (December 3, 2008) (SR–NYSEALTR–2008–11) (adopting amendments to Rule 62—NYSE Alternext Equities to track changes to corresponding NYSE Rule 62). 10 See E:\FR\FM\09MRN1.SGM 09MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 44 (Monday, March 9, 2009)]
[Notices]
[Pages 10111-10114]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4877]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59493; File No. SR-NYSEArca-2009-18]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Relating to the 
Listing and Trading of Bear Market Strategic Accelerated Redemption 
Securities[supreg] Linked to the S&P Small Cap Regional Banks Index

March 3, 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 March 2, 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)

[[Page 10112]]

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.
---------------------------------------------------------------------------

    \1\ 15 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade Bear Market Strategic 
Accelerated Redemption Securities[supreg] Linked to the S&P Small Cap 
Regional Banks Index (``Notes'') under NYSE Arca Equities Rule 
5.2(j)(6). The text of the proposed rule change is available at https://
www.nyse.com, the Exchange and the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item 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 Notes \5\ under NYSE 
Arca Equities Rule 5.2(j)(6), which includes the Exchange's listing 
standards for Equity Index-Linked Securities.\6\ According to the 
Registration Statement, the Notes are Bank of America Corporation 
(``BAC'' or the ``issuer'') senior unsecured debt securities and are 
not guaranteed or insured by the Federal Deposit Insurance Corporation 
or secured by collateral. The Notes will rank equally with all of the 
issuer's other unsecured and unsubordinated debt, and any payments due 
on the Notes, including any repayment of principal, will be subject to 
the credit risk of BAC. The Notes are designed for, but not limited to, 
investors who anticipate that the Observation Level \7\ of the S&P 
Small Cap Regional Banks Index (the ``Index'') on any Observation Date 
will be less than or equal to the Call Level. The Notes provide for an 
automatic call if the Observation Level of the Index on any Observation 
Date is less than or equal to the Call Level.
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    \5\ See registration statement on Form S-3 filed with the 
Securities and Exchange Commission on May 5, 2006 (Registration No. 
333-133852); Product Supplement No. STR-1, dated January 2, 2009 
(``Product Supplement No. STR-1''); Series L Prospectus Supplement 
dated April 10, 2008; and Preliminary Term Sheet, subject to 
completion, dated January 29, 2009 (``Registration Statement'').
    \6\ Equity Index-Linked Securities are securities that provide 
for the payment at maturity of a cash amount based on the 
performance of an underlying index or indexes of equity securities.
    \7\ Capitalized terms used but not defined herein have the 
meanings set forth in Product Supplement No. STR-1.
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    The Notes will be called at an amount equal to the $10 principal 
amount per unit plus the Call Premium of between 15% and 19% per annum 
if the closing level of the Index on any Observation Date is less than 
or equal to 100% of its starting value. The Notes have a maturity of 
approximately 18 months. There will be a one-to-one downside loss if 
the Notes are not called prior to maturity and the closing level of the 
Index increases above a Threshold Value, with up to 100% of the 
principal amount at risk. There are no periodic interest payments.
    The Index is a capitalization weighted index. The Index is a sub-
index of the S&P SmallCap 600 Index and is comprised of the regional 
banks included in the ``Financials'' sector of the S&P SmallCap 600 
Index. Regional banks are defined as commercial banks whose businesses 
are derived primarily from commercial lending operations and have 
significant business activity in retail banking and small and medium 
corporate lending. Regional banks tend to operate in limited geographic 
regions. The Index excludes companies classified according to the 
Global Industry Classification Standard (``GICS'') in the Diversified 
Banks and Thrifts & Mortgage Banks sub-industries and also excludes 
investment banks classified in the Investment Banking & Brokerage Sub-
Industry. The GICS methodology has been widely accepted as an industry 
analysis framework for investment research, portfolio management, and 
asset allocation. The Index was developed with a base value of 100 as 
of December 31, 1993. Of the companies included in the S&P SmallCap 600 
Index, 41 were included in the Index as of January 15, 2009.
    The Exchange is submitting this proposed rule change because the 
Index for the Fund does not meet all of the ``generic'' listing 
requirements of NYSE Arca Equities Rule 5.2(j)(6) applicable to listing 
of all Equity Index-Linked Securities. The Index meets all such 
requirements except for those set forth in Rule 
5.2(j)(6)(B)(I)(1)(b)(i).\8\ The Exchange represents that: (1) Except 
for the requirement under 5.2(j)(6)(B)(I)(1)(b)(i), the Notes currently 
satisfy all of the generic listing standards under NYSE Arca Equities 
Rule 5.2(j)(6); and (2) BAC is required to comply with Rule 10A-3 under 
the Act \9\ for the initial and continued listing of the Notes. In 
addition, the Exchange represents that the Notes will comply with all 
other requirements applicable to Equity Index-Linked Securities, 
including, but not limited to, requirements relating to the 
dissemination of key information such as the Index value, rules 
governing the trading of equity securities, trading hours, trading 
halts, surveillance,\10\ and Information Bulletin to ETP Holders, as 
set forth in Exchange rules applicable to Equity Index-Linked 
Securities and in prior Commission orders approving the generic listing 
rules applicable to the listing and trading of Equity Index-Linked 
Securities.\11\ Detailed descriptions of the Notes, the Index 
(including the methodology used to determine the composition of the 
Index), fees, redemption procedures and payment at redemption, payment 
at maturity, taxes, and risk factors relating to the Notes are 
available in the Registration Statement.
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    \8\ Rule 5.2(j)(6)(B)(I)(1)(b)(i) requires that each component 
security in the index to which the security is linked has a minimum 
market value of at least $75 million, except that for each of the 
lowest dollar weighted component securities in the index that in the 
aggregate account for no more than 10% of the dollar weight of the 
index, the market value can be at least $50 million. The Exchange 
states that, as of February 20, 2009, the Index fails to meet the 
requirement of Rule 5.2(j)(6)(B)(I)(1)(b)(i) in that, with respect 
to each of the lowest dollar weighted component securities in the 
Index that in the aggregate account for no more than 10% of the 
dollar weight of the Index, two securities, accounting for a total 
of 0.35% of the Index weight, have a market value of less than $50 
million. These two Index securities have a market value of 
approximately $32 million and $25 million, respectively. Index 
components comprising the top 90% of the Index weight have a market 
value of at least $75 million. In addition, 99.65% of the total 
Index weight is comprised of securities with a market value of at 
least $50 million. The average and median market capitalization of 
Index stocks is $406 million and $349.7 million, respectively, as of 
February 20, 2009.
    \9\ 17 CFR 240.10A-3.
    \10\ The Exchange may obtain information for surveillance 
purposes via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members of ISG. For a list of the current members 
of ISG, see https://www.isgportal.org.
    \11\ See, e.g., Securities Exchange Act Release No. 56637 
(October 10, 2007), 72 FR 58704 (October 16, 2007) (SR-NYSEArca-
2007-92) (order approving generic listing standards under NYSE Arca 
Equities Rule 5.2(j)(6)).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the

[[Page 10113]]

Act,\12\ in general, and furthers the objectives of Section 
6(b)(5),\13\ in particular, in that it is designed to prevent 
fraudulent and manipulative 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 mechanisms of, a free and open 
market and a national market system. The proposed rule change will 
allow the listing and trading of the Notes on the Exchange, which the 
Exchange believes will enhance competition among market participants, 
to the benefit of investors and the marketplace.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 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 
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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) \14\ of the Act and subparagraph (f)(6) of Rule 
19b-4 \15\ thereunder.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has fulfilled the pre-filing requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative for 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii),\17\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay so that the proposal may 
become operative immediately upon filing. The Exchange states that the 
proposed rule change does not significantly affect the protection of 
investors or the public interest and does not impose any significant 
burden on competition. NYSE Arca believes that the proposed rule change 
is non-controversial in that the Index for the Notes fail to meet the 
requirements set forth in NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(i) by only a small amount: Two securities 
accounting for a total of .35% of the Index weight have a market value 
of less than 50 million and the top 90% of the Index weight have a 
market value of $75 million. The Notes currently satisfy all of the 
other applicable generic listing standards under NYSE Arca Equities 
Rule 5.2(j)(6) and all other requirements applicable to Index-Linked 
Securities and, in particular, Equity Index-Linked Securities, as set 
forth in Exchange rules and prior Commission orders approving the 
generic listing rules applicable to the listing and trading of Index-
Linked Securities. In addition, the Exchange believes that it has 
developed adequate trading rules, procedures, surveillance programs, 
and listing standards for the continued listing and trading of the 
Notes.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\18\ Given that the Notes comply with all of the NYSE Arca 
Equities generic listing standards for Equity Index-Linked Securities 
(except for narrowly missing the requirement that lowest dollar 
weighted component securities in the Index have a market value of at 
least $50 million), the listing and trading of the Notes by NYSE Arca 
does not appear to present any novel or significant regulatory issues 
or impose any significant burden on competition. For these reasons, the 
Commission designates the proposed rule change as operative upon 
filing.
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    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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.

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-2009-18 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2009-18. 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-2009-18 and should 
be submitted on or before March 30, 2009.


[[Page 10114]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4877 Filed 3-6-09; 8:45 am]
BILLING CODE 8011-01-P

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