Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Accelerated Approval of a Proposed Rule Change Relating to the Leverage Factor Applicable to the MacroShares Major Metro Housing Trusts, 15803-15804 [E9-7775]
Download as PDF
Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices
Number SR–NYSEAmex–2009–03 on
the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–59678; File No. SR–
NYSEArca–2009–14]
• 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–NYSEAmex–2009–03. 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–
NYSEAmex–2009–03 and should be
submitted on or before April 28, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7831 Filed 4–6–09; 8:45 am]
BILLING CODE 8010–01–P
12 17
CFR 200.30–3(a)(12).
VerDate Nov<24>2008
17:13 Apr 06, 2009
Jkt 217001
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Accelerated
Approval of a Proposed Rule Change
Relating to the Leverage Factor
Applicable to the MacroShares Major
Metro Housing Trusts
April 1, 2009.
On March 3, 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’’)
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to modify the
representation made in SR–NYSEArca–
2008–92 3 regarding the leverage factor
applicable to the MacroShares Major
Metro Housing Up Trust (‘‘Up Trust’’)
and the MacroShares Major Metro
Housing Down Trust (‘‘Down Trust’’)
(collectively, the ‘‘Trusts’’) and,
specifically, to indicate that the leverage
factor to be applied will be 3 rather than
2.4 The proposed rule change was
published in the Federal Register on
March 16, 2009 for a 15-day comment
period.5 The Commission received no
comments on the proposal. This order
grants approval to the proposed rule
change on an accelerated basis.
I. Description of the Proposal
The Commission previously
approved, pursuant to Section 19(b)(2)
of the Act, the Exchange’s proposal to
list and trade the Up MacroShares and
the Down MacroShares as Paired Trust
Shares under NYSE Arca Equities Rule
8.400.6
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 58704
(October 1, 2008), 73 FR 59026 (October 8, 2008)
(order approving listing and trading on the
Exchange of the Trusts (‘‘Approval Order’’)); See
also Securities Exchange Act Release No. 58469
(September 5, 2008), 73 FR 53306 (September 15,
2008) (SR–NYSEArca–2008–92) (notice of proposed
rule change to list and trade the Trusts on the
Exchange) (‘‘Initial Notice’’). The Shares are being
offered by the Trusts under the Securities Act of
1933, 15 U.S.C. 77a. On February 17, 2009, the
depositor filed with the Commission preliminary
Registration Statements on Form S–1 (Amendment
No. 3) for the Up MacroShares (File No. 333–
151522) and for the Down MacroShares (File No.
333–151523) (‘‘Registration Statements’’).
4 Shares of the Up Trust and the Down Trust are
referred to collectively as ‘‘Shares.’’
5 See Securities Exchange Act Release No. 59542
(March 9, 2009), 74 FR 11167 (‘‘Notice’’).
6 See Approval Order, supra note 3.
2 17
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
15803
As described in the Approval Order
and the Initial Notice, the Up Trust and
the Down Trust intend to issue Up
MacroShares and Down MacroShares,
respectively, on a continuous basis. The
Up MacroShares and the Down
MacroShares represent undivided
beneficial interests in the Up Trust and
the Down Trust, respectively.
The Trusts will make quarterly
distributions and a final distribution
that is based on the value of the S&P/
Case-Shiller Composite-10 Home Price
Index (‘‘Index’’), as well as on prevailing
interest rates on U.S. Treasury
obligations. The last published value of
the S&P/Case-Shiller Composite-10
Home Price Index is referred to as the
‘‘Reference Value of the Index’’ or
‘‘Reference Value’’, as discussed in the
Initial Notice.7
If the Reference Value rises above its
specified starting level, the Up Trust’s
Underlying Value (as described in the
Initial Notice) will increase to include
all of its assets plus a portion of the
assets of the paired Down Trust. This
portion of assets due from the Down
Trust will be multiplied by a specified
‘‘leverage factor.’’ Conversely, if the
level of the Reference Value of the Index
falls below its starting level on and after
the closing date, the Up Trust’s
Underlying Value will decrease, because
a portion of its assets will be included
in the Underlying Value of its paired
Down Trust, such portion being
multiplied by the leverage factor.
The Initial Notice stated that the
leverage factor would be 2, as initially
described in the Registration
Statements. The Trusts now intend to
utilize a leverage factor of 3.8 The effect
of this will be to triple any increase or
decrease in the Underlying Value of the
Up Trust or the Down Trust, depending
upon whether there is an increase or
decrease in the Reference Value of the
Index.
Additional information relating to the
Trusts and Shares is available in the
Registration Statements, the Notice, the
Initial Notice and the Approval Order.9
II. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
7 The Reference Value of the Index is the
Reference Price for purposes of NYSE Arca Equities
Rule 8.400.
8 With the exception of the proposed change to
the leverage factor, and a change in the distribution
date from a date in 2018 to a date in 2014, the
Exchange states that all representations made by the
Exchange in the Initial Notice continue to apply.
See Notice, supra note 5, 74 FR at 11168, n. 8.
9 See supra notes 3 and 5.
E:\FR\FM\07APN1.SGM
07APN1
15804
Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices
requirements of Section 6 of the Act 10
and the rules and regulations
thereunder applicable to a national
securities exchange.11 In particular, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act,12 which requires, among other
things, that the Exchange’s rules be
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, 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 Commission notes that it has
previously approved the listing and
trading of the Trusts under NYSE Arca
Equities Rule 8.400.13 The Commission
also notes that the Exchange has
represented that, with the exception of
the change to the leverage factor
applicable to the Trusts, and a change
to the distribution date, all prior
representations made in the Initial
Notice will continue to apply.14 This
approval order is based on the
Exchange’s representations.
The Commission believes that the
increase from 2 to 3 of the leverage
factor applicable to the Up MacroShares
and the Down MacroShares,
respectively, is reasonable to facilitate
the listing and trading of the Shares.
Additionally, the Commission believes
that the increase of the leverage factor
should help to increase competition
among market participants and benefit
investors. The Commission also notes
that it has previously approved the
listing and trading of other exchangetraded products with up to 300%
leverage.15
10 15
U.S.C. 78f.
11 In approving this proposed rule change the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
12 15 U.S.C. 78f(b)(5).
13 See Approval Order, supra note 3.
14 See supra notes 5 and 8.
15 See e.g., Securities Exchange Act Release Nos.
58825 (October 21, 2008), 73 FR 63756 (October 27,
2008) (SR–NYSEArca–2008–89) (approving
amendment to Rule 5.2(j)(3) to permit listing of
Investment Company Units where the issuer seeks
to provide investment results, before fees and
expenses, up to ¥300% of the percentage
performance on a given day of a particular equity
index); 59332 (January 30, 2009), 74 FR 6338
(February 2, 2009) (SR–NYSEArca–2008–136)
(approving amendment to NYSE Arca Equities Rule
5.2(j)(6) to permit a loss or negative payment at
maturity with respect to an issue of Index-Linked
Securities to be accelerated by a multiple up to
VerDate Nov<24>2008
17:13 Apr 06, 2009
Jkt 217001
III. Accelerated Approval
The Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,16 for approving the proposal prior
to the thirtieth day after the date of
publication of the Notice in the Federal
Register. The Commission has received
no comments regarding the proposed
rule change, and the Commission finds
that the proposed rule change does not
raise any novel regulatory issues.
Additionally, the Commission believes
that accelerating approval of this
proposal should benefit the market by
making available to investors, without
undue delay, additional products in the
market for Paired Trust Shares.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–NYSEArca–
2009–14) be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7775 Filed 4–6–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59665; File No. SR–
NYSEAmex–2009–05]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Amex LLC Amending Equities Rule
48.10 To Extend the Temporary
Provisions of the Rule Relating to the
Ability of the Exchange To Declare an
Extreme Market Volatility Condition
and Suspend Certain Exchange
Requirements Relating to the Closing
of Securities at the Exchange
March 31, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March
23, 2009, NYSE Amex LLC 4 (the
three times the performance of an underlying
Reference Asset, as defined in NYSE Arca Equities
Rule 5.2(j)(6)).
16 15 U.S.C. 78s(b)(2).
17 Id.
18 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See e-mail from Clare F. Saperstein, Managing
Director, Office of General Counsel, NYSE
Regulation, Inc., to David Liu, Assistant Director,
Commission, dated March 31, 2009.
PO 00000
Frm 00116
Fmt 4703
Sfmt 4703
‘‘Exchange’’ or ‘‘NYSE Amex’’) filed
with the Securities and Exchange
Commission (the ‘‘SEC’’ or
‘‘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) of the
Act 5 and Rule 19b–4(f)(6) thereunder,6
which renders it effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Equities Rule 48.10 to extend the
temporary provisions of the rule relating
to the ability of the Exchange to declare
an extreme market volatility condition
and suspend certain Exchange
requirements relating to the closing of
securities at the Exchange. 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
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 amend
NYSE Amex Equities Rule 48.10 to
temporarily extend the provisions of the
rule relating to declaring an extreme
market volatility condition at the close.7
On November 26, 2008, NYSE Amex
filed a rule proposal to conform its rules
to those of the New York Stock
5 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
7 See SR–NYSE–2009–35 (formally submitted on
March 23, 2009).
6 17
E:\FR\FM\07APN1.SGM
07APN1
Agencies
[Federal Register Volume 74, Number 65 (Tuesday, April 7, 2009)]
[Notices]
[Pages 15803-15804]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7775]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59678; File No. SR-NYSEArca-2009-14]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Accelerated Approval of a Proposed Rule Change Relating to the Leverage
Factor Applicable to the MacroShares Major Metro Housing Trusts
April 1, 2009.
On March 3, 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'') pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to modify the representation made in SR-NYSEArca-
2008-92 \3\ regarding the leverage factor applicable to the MacroShares
Major Metro Housing Up Trust (``Up Trust'') and the MacroShares Major
Metro Housing Down Trust (``Down Trust'') (collectively, the
``Trusts'') and, specifically, to indicate that the leverage factor to
be applied will be 3 rather than 2.\4\ The proposed rule change was
published in the Federal Register on March 16, 2009 for a 15-day
comment period.\5\ The Commission received no comments on the proposal.
This order grants approval to the proposed rule change on an
accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 58704 (October 1,
2008), 73 FR 59026 (October 8, 2008) (order approving listing and
trading on the Exchange of the Trusts (``Approval Order'')); See
also Securities Exchange Act Release No. 58469 (September 5, 2008),
73 FR 53306 (September 15, 2008) (SR-NYSEArca-2008-92) (notice of
proposed rule change to list and trade the Trusts on the Exchange)
(``Initial Notice''). The Shares are being offered by the Trusts
under the Securities Act of 1933, 15 U.S.C. 77a. On February 17,
2009, the depositor filed with the Commission preliminary
Registration Statements on Form S-1 (Amendment No. 3) for the Up
MacroShares (File No. 333-151522) and for the Down MacroShares (File
No. 333-151523) (``Registration Statements'').
\4\ Shares of the Up Trust and the Down Trust are referred to
collectively as ``Shares.''
\5\ See Securities Exchange Act Release No. 59542 (March 9,
2009), 74 FR 11167 (``Notice'').
---------------------------------------------------------------------------
I. Description of the Proposal
The Commission previously approved, pursuant to Section 19(b)(2) of
the Act, the Exchange's proposal to list and trade the Up MacroShares
and the Down MacroShares as Paired Trust Shares under NYSE Arca
Equities Rule 8.400.\6\
---------------------------------------------------------------------------
\6\ See Approval Order, supra note 3.
---------------------------------------------------------------------------
As described in the Approval Order and the Initial Notice, the Up
Trust and the Down Trust intend to issue Up MacroShares and Down
MacroShares, respectively, on a continuous basis. The Up MacroShares
and the Down MacroShares represent undivided beneficial interests in
the Up Trust and the Down Trust, respectively.
The Trusts will make quarterly distributions and a final
distribution that is based on the value of the S&P/Case-Shiller
Composite-10 Home Price Index (``Index''), as well as on prevailing
interest rates on U.S. Treasury obligations. The last published value
of the S&P/Case-Shiller Composite-10 Home Price Index is referred to as
the ``Reference Value of the Index'' or ``Reference Value'', as
discussed in the Initial Notice.\7\
---------------------------------------------------------------------------
\7\ The Reference Value of the Index is the Reference Price for
purposes of NYSE Arca Equities Rule 8.400.
---------------------------------------------------------------------------
If the Reference Value rises above its specified starting level,
the Up Trust's Underlying Value (as described in the Initial Notice)
will increase to include all of its assets plus a portion of the assets
of the paired Down Trust. This portion of assets due from the Down
Trust will be multiplied by a specified ``leverage factor.''
Conversely, if the level of the Reference Value of the Index falls
below its starting level on and after the closing date, the Up Trust's
Underlying Value will decrease, because a portion of its assets will be
included in the Underlying Value of its paired Down Trust, such portion
being multiplied by the leverage factor.
The Initial Notice stated that the leverage factor would be 2, as
initially described in the Registration Statements. The Trusts now
intend to utilize a leverage factor of 3.\8\ The effect of this will be
to triple any increase or decrease in the Underlying Value of the Up
Trust or the Down Trust, depending upon whether there is an increase or
decrease in the Reference Value of the Index.
---------------------------------------------------------------------------
\8\ With the exception of the proposed change to the leverage
factor, and a change in the distribution date from a date in 2018 to
a date in 2014, the Exchange states that all representations made by
the Exchange in the Initial Notice continue to apply. See Notice,
supra note 5, 74 FR at 11168, n. 8.
---------------------------------------------------------------------------
Additional information relating to the Trusts and Shares is
available in the Registration Statements, the Notice, the Initial
Notice and the Approval Order.\9\
---------------------------------------------------------------------------
\9\ See supra notes 3 and 5.
---------------------------------------------------------------------------
II. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the
[[Page 15804]]
requirements of Section 6 of the Act \10\ and the rules and regulations
thereunder applicable to a national securities exchange.\11\ In
particular, the Commission finds that the proposal is consistent with
Section 6(b)(5) of the Act,\12\ which requires, among other things,
that the Exchange's rules be 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, 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f.
\11\ In approving this proposed rule change the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission notes that it has previously approved the listing
and trading of the Trusts under NYSE Arca Equities Rule 8.400.\13\ The
Commission also notes that the Exchange has represented that, with the
exception of the change to the leverage factor applicable to the
Trusts, and a change to the distribution date, all prior
representations made in the Initial Notice will continue to apply.\14\
This approval order is based on the Exchange's representations.
---------------------------------------------------------------------------
\13\ See Approval Order, supra note 3.
\14\ See supra notes 5 and 8.
---------------------------------------------------------------------------
The Commission believes that the increase from 2 to 3 of the
leverage factor applicable to the Up MacroShares and the Down
MacroShares, respectively, is reasonable to facilitate the listing and
trading of the Shares. Additionally, the Commission believes that the
increase of the leverage factor should help to increase competition
among market participants and benefit investors. The Commission also
notes that it has previously approved the listing and trading of other
exchange-traded products with up to 300% leverage.\15\
---------------------------------------------------------------------------
\15\ See e.g., Securities Exchange Act Release Nos. 58825
(October 21, 2008), 73 FR 63756 (October 27, 2008) (SR-NYSEArca-
2008-89) (approving amendment to Rule 5.2(j)(3) to permit listing of
Investment Company Units where the issuer seeks to provide
investment results, before fees and expenses, up to -300% of the
percentage performance on a given day of a particular equity index);
59332 (January 30, 2009), 74 FR 6338 (February 2, 2009) (SR-
NYSEArca-2008-136) (approving amendment to NYSE Arca Equities Rule
5.2(j)(6) to permit a loss or negative payment at maturity with
respect to an issue of Index-Linked Securities to be accelerated by
a multiple up to three times the performance of an underlying
Reference Asset, as defined in NYSE Arca Equities Rule 5.2(j)(6)).
---------------------------------------------------------------------------
III. Accelerated Approval
The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\16\ for approving the proposal prior to the thirtieth day
after the date of publication of the Notice in the Federal Register.
The Commission has received no comments regarding the proposed rule
change, and the Commission finds that the proposed rule change does not
raise any novel regulatory issues. Additionally, the Commission
believes that accelerating approval of this proposal should benefit the
market by making available to investors, without undue delay,
additional products in the market for Paired Trust Shares.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\17\ that the proposed rule change (SR-NYSEArca-2009-14) be, and it
hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------
\17\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7775 Filed 4-6-09; 8:45 am]
BILLING CODE 8010-01-P