Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change Relating to SPDR Barclays Capital Convertible Bond ETF, 16901-16903 [E9-8326]
Download as PDF
<![CDATA[
Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices
are applicable to a national securities
exchange, and, in particular, with the
requirements of Section 6 of the Act.7
Specifically, the Exchange believes that
the proposed rule change is consistent
with Section 6(b)(4) of the Act,8 in that
it provides for the equitable allocation
of reasonable dues, fees and other
charges among members and other
persons using any facility or system
which the Exchange operates or
controls. The Exchange notes that it
operates in a highly competitive market
in which market participants can
readily direct order flow to competing
venues if they deem fee levels at a
particular venue to be excessive. The
Exchange believes that its fees and
credits are competitive with those
charged by other venues and that the
various changes it has proposed to
reduce its fees will benefit Members
both due to the obvious economic
savings and due to the potential of
increased available liquidity at the
Exchange. For those proposed changes
that will result in increased fees charged
to Members or lower rebates received by
Members, such as the reduction of the
rebate in Tape A and C securities, the
Exchange believes that any additional
revenue it receives will allow the
Exchange to devote additional capital to
its operations, which may, in turn,
benefit Members of the Exchange.
Finally, the Exchange believes that the
proposed rates are equitable in that they
apply uniformly to all Members.
(B) Self-Regulatory Organization’s
Statement of Burden on Competition
The Exchange does not believe that
the proposed rule change imposes any
burden on competition.
(C) Self-Regulatory Organization’s
Statement on Comments Regarding the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has been designated as a fee change
pursuant to Section 19(b)(3)(A)(ii) of the
Act 9 and Rule 19b–4(f)(2) thereunder,10
because it establishes or changes a due,
fee or other charge imposed on members
by the Exchange. Accordingly, the
7 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
9 15 U.S.C. 78s(b)(3)(A)(ii).
10 17 CFR 240.19b–4(f)(6) [sic].
8 15
VerDate Nov<24>2008
18:51 Apr 10, 2009
Jkt 217001
proposal is effective upon filing with
the Commission.
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 proposal 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–BATS–-2009–008 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 No.
SR–BATS–2009–008. 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 changes 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 such filing also will be
available for inspection and copying at
the principal office of BATS. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
16901
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–BATS–2009–008 and should be
submitted on or before May 4, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–8323 Filed 4–10–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59708; File No. SR–
NYSEArca–2009–12]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Approving Proposed
Rule Change Relating to SPDR
Barclays Capital Convertible Bond ETF
April 6, 2009.
I. Introduction
On February 18, 2009, NYSE Arca,
Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’),
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 list and trade
shares (‘‘Shares’’) of the SPDR® Barclays
Capital Convertible Bond ETF. The
proposed rule change was published for
comment in the Federal Register on
March 6, 2009.3 The Commission
received no comment letters on the
proposed rule change. This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
The Exchange proposes to list and
trade the SPDR® Barclays Capital
Convertible Bond ETF (‘‘Fund’’) 4 under
NYSE Arca Equities Rule 5.2(j)(3), the
Exchange’s listing standards for
Investment Company Units (‘‘Units’’).5
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 59459
(February 26, 2009), 74 FR 9860 (‘‘Notice’’).
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) (‘‘Registration
Statement’’).
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
1 15
E:\FR\FM\13APN1.SGM
Continued
13APN1
16902
Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices
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 (‘‘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 Index includes both U.S.
convertible bonds and convertible
preferred equity securities.6 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.
The Exchange represents that: (i)
except for Commentaries .01(a)(A)(2) 7
and .01(a)(A)(5) 8 to NYSE Arca Equities
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 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 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).
7 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. According to the Exchange, 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.
8 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 Exchange states that, while the Index does
not include any non-U.S. securities, as of November
30, 2008, six of the 31 convertible preferred
securities in the Index, accounting for 8% of the
Index weight, were not listed on a national
VerDate Nov<24>2008
18:51 Apr 10, 2009
Jkt 217001
Rule 5.2(j)(3), the Shares currently
satisfy all other of the generic listing
standards under the rule; (ii) 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 (iii) the Trust is
required to comply with Rule 10A–3 9
under the Act for the initial and
continued listing of the Shares.
Additionally, 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 Bulletins to
ETP Holders, as set forth in prior
Commission orders approving the
generic listing rules applicable to the
listing and trading of Units.10 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).11
III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that NYSE Arca’s proposal to list
and trade the Shares is consistent with
the Act and the rules and regulations
thereunder applicable to a national
securities exchange.12 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,13 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
securities exchange; those issues were traded overthe-counter.
9 17 CFR 240.10A–3.
10 See, e.g., Securities Exchange Act Release Nos.
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); 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); and 41983 (October 6, 1999),
64 FR 56008 (October 15, 1999) (SR–PCX–98–29)
(order approving rules for listing and trading of
Units).
11 See also Notice, supra, note 3.
12 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).
13 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
NYSE Arca Equities Rule 5.2(j)(3)
permits the Exchange to consider
qualifying Units for listing and trading
pursuant to Rule 19b–4(e) under the
Act. The Shares, however, do not
qualify for generic listing under the
Exchange’s rule because, although 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, the Index components
consisting of convertible preferred
stocks do not separately meet the
criteria set forth in Commentaries
.01(a)(A)(2) and .01(a)(A)(5) of the rule
applicable to Units based on U.S.
indexes or portfolios.14
The Commission believes that the
listing and trading of the Shares is
consistent with the Act. The Shares
currently satisfy all but two of the
generic listing standards under the rule,
and the Commission believes that the
composition of the Index, despite failing
to satisfy the requirements of
Commentaries .01(a)(A)(2) and
.01(a)(A)(5) to NYSE Arca Equities Rule
5.2(j)(3), does not raise any regulatory
concerns. Additionally, the continued
listing standards under NYSE Arca
Equities Rules 5.2(j)(3) and 5.5(g)(2)
applicable to Units will apply to the
Shares, and the Trust is required to
comply with Rule 10A–3 15 under the
Act for the initial and continued listing
of the Shares. Finally, the Commission
notes that it has not received any
comments regarding the proposed rule
change.
IV. Conclusion
For the foregoing reasons, the
Commission believes that the
Exchange’s proposal to list and trade the
Shares is consistent with the Act. This
order is based on the Exchange’s
representations.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,16 that the
proposed rule change (SR–NYSEArca–
2009–12) be, and it hereby is, approved.
14 See
notes 7 and 8, supra.
CFR 240.10A–3.
16 15 U.S.C. 78s(b)(1).
15 17
E:\FR\FM\13APN1.SGM
13APN1
Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–8326 Filed 4–10–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59706; File No. SR–
NASDAQ–2009–029]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify Fees
for Members Using the NASDAQ
Market Center
April 6, 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 25,
2009, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’) 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 NASDAQ. Pursuant to
Section 19(b)(3)(A)(ii) of the Act 3 and
Rule 19b–4(f)(2) thereunder,4 NASDAQ
has designated this proposal as
establishing or changing a due, fee, or
other charge, which renders the
proposed rule change effective upon
filing.
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
NASDAQ proposes to modify pricing
for NASDAQ members using the Nasdaq
Market Center. NASDAQ will
implement this rule change on April 1,
2009. The text of the proposed rule
change is available at https://
nasdaqomx.cchwallstreet.com/, at
NASDAQ’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,
NASDAQ included statements
17 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)(ii).
4 17 CFR 240.19b–4(f)(2).
18:51 Apr 10, 2009
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ is proposing to modify its
pricing for order execution and routing.
As detailed below, the effect of the fee
changes varies with respect to the listing
venue of the securities being traded and
whether a member is accessing or
providing liquidity or routing an order.
Execution of Orders for Securities Listed
on NASDAQ or the New York Stock
Exchange (‘‘NYSE’’); Routing of Orders
for Securities Listed on NASDAQ or
NYSE to Venues Other Than NYSE;
Routing of Orders for Exchange-Traded
Funds (‘‘ETFs’’) to NYSE
NASDAQ is reducing fees to access
liquidity in securities listed on
NASDAQ and NYSE by reducing the
levels of market activity at which
members qualify for reduced pricing
and by reducing the fees charged to
these qualifying members. Specifically,
NASDAQ is introducing a new pricing
tier for members with an average daily
volume through the Nasdaq Market
Center in all securities of (i) more than
50 million shares of liquidity provided,
and (ii) more than 60 million shares of
liquidity accessed and/or routed.5
Members qualifying for this tier will pay
$0.0026 per share executed when
accessing liquidity (or 0.1% of the total
transaction cost in the case of
executions of securities priced at less
than $1 per share). A second pricing tier
will apply to members with an average
daily volume through the Nasdaq
Market Center in all securities of (i)
more than 25 million shares of liquidity
provided, and (ii) more than 40 million
shares of liquidity accessed and/or
routed. Members qualifying for this tier
will pay $0.0028 per share executed
when accessing liquidity (or 0.1% of the
total transaction cost in the case of
executions at less than $1 per share). By
contrast, under the current pricing
5 As is currently the case with respect to reduced
pricing tiers, orders that do not attempt to execute
in the Nasdaq Market Center for the full size of the
order prior to routing are not counted in
determining shares of liquidity routed.
1 15
VerDate Nov<24>2008
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.
NASDAQ has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
Jkt 217001
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
16903
schedule, a member must have an
average daily volume of (i) more than 35
million shares of liquidity provided and
(ii) more than 55 million shares of
liquidity accessed and/or routed in
order to qualify for a fee to access
liquidity of $0.0029. Thus, under the
change, favorable pricing becomes
available at lower levels of liquidity
provision (25 million shares versus 35
million shares) and routing and/or
accessing (40 million shares versus 55
million shares), and the reduced fees are
themselves lower ($0.0026 or $0.0028
per share executed, versus $0.0029 per
share executed). However, in order to
simplify its schedule, NASDAQ is
eliminating a reduced fee of $0.00295
per share executed for members that
access a daily average of more than 55
million shares of liquidity during a
month but that do not otherwise qualify
for a lower rate. As is currently the case,
members not qualifying for a reduced
pricing tier will pay $0.0030 per share
executed to access liquidity (or 0.1% of
the total transaction cost in the case of
executions at less than $1 per share).
NASDAQ is also instituting changes
with respect to fees for routing orders
that attempt to execute in the Nasdaq
Market Center for the full size of the
order before routing. These routing
changes apply to orders in NASDAQlisted securities, orders in NYSE-listed
securities routed to venues other than
NYSE, and routing of orders for ETFs to
NYSE. With respect to such activity,
NASDAQ is eliminating volume-based
tiers, with fees that currently range from
$0.0029 to $0.003, and instituting a
lower fee of $0.0026 available to all
members.6 Fees for routing orders that
do not check the Nasdaq Market Center
for the full size of the order before
routing remain unchanged, except with
respect to orders in securities that are
priced at $1 or more per share and listed
on NASDAQ or NYSE, where the order
is directed to NASDAQ OMX BX
(‘‘BX’’). For securities listed on
NASDAQ or NYSE, BX is replacing its
fee to access liquidity with a credit of
$0.0006.7 Because that credit is
designed to encourage direct use of BX
by its members, NASDAQ will not be
passing on the credit to NASDAQ
members that use its routing facility to
access BX. Nevertheless, NASDAQ
believes that the change in BX pricing
warrants eliminating the fee for routing
orders to BX in circumstances where
NASDAQ members choose to direct
orders to BX. Similarly, NASDAQ is
6 The fee remains 0.3% of the total transaction
cost in the case of securities priced at less than $1
per share.
7 SR–BX–2009–018 (March 25, 2009).
E:\FR\FM\13APN1.SGM
13APN1
]]>Agencies
[Federal Register Volume 74, Number 69 (Monday, April 13, 2009)]
[Notices]
[Pages 16901-16903]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-8326]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59708; File No. SR-NYSEArca-2009-12]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving
Proposed Rule Change Relating to SPDR Barclays Capital Convertible Bond
ETF
April 6, 2009.
I. Introduction
On February 18, 2009, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca''), 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 list and trade shares
(``Shares'') of the SPDR[supreg] Barclays Capital Convertible Bond ETF.
The proposed rule change was published for comment in the Federal
Register on March 6, 2009.\3\ The Commission received no comment
letters on the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 59459 (February 26,
2009), 74 FR 9860 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange proposes to list and trade the SPDR[supreg] Barclays
Capital Convertible Bond ETF (``Fund'') \4\ under NYSE Arca Equities
Rule 5.2(j)(3), the Exchange's listing standards for Investment Company
Units (``Units'').\5\
---------------------------------------------------------------------------
\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) (``Registration Statement'').
\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).
---------------------------------------------------------------------------
[[Page 16902]]
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 (``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 Index includes both U.S. convertible bonds and convertible
preferred equity securities.\6\ 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.
---------------------------------------------------------------------------
\6\ 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 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).
---------------------------------------------------------------------------
The Exchange represents that: (i) except for Commentaries
.01(a)(A)(2) \7\ and .01(a)(A)(5) \8\ to NYSE Arca Equities Rule
5.2(j)(3), the Shares currently satisfy all other of the generic
listing standards under the rule; (ii) 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 (iii) the Trust is required to
comply with Rule 10A-3 \9\ under the Act for the initial and continued
listing of the Shares. Additionally, 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
Bulletins to ETP Holders, as set forth in prior Commission orders
approving the generic listing rules applicable to the listing and
trading of Units.\10\ 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).\11\
---------------------------------------------------------------------------
\7\ 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. According to the Exchange, 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.
\8\ 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 Exchange states that, while the
Index does not include any non-U.S. securities, as of November 30,
2008, six of the 31 convertible preferred securities in the Index,
accounting for 8% of the Index weight, were not listed on a national
securities exchange; those issues were traded over-the-counter.
\9\ 17 CFR 240.10A-3.
\10\ See, e.g., Securities Exchange Act Release Nos. 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); 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); and 41983 (October 6, 1999), 64
FR 56008 (October 15, 1999) (SR-PCX-98-29) (order approving rules
for listing and trading of Units).
\11\ See also Notice, supra, note 3.
---------------------------------------------------------------------------
III. Discussion and Commission's Findings
After careful review, the Commission finds that NYSE Arca's
proposal to list and trade the Shares is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\12\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\13\
in that it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, 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.
---------------------------------------------------------------------------
\12\ 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).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
NYSE Arca Equities Rule 5.2(j)(3) permits the Exchange to consider
qualifying Units for listing and trading pursuant to Rule 19b-4(e)
under the Act. The Shares, however, do not qualify for generic listing
under the Exchange's rule because, although 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, the Index components consisting
of convertible preferred stocks do not separately meet the criteria set
forth in Commentaries .01(a)(A)(2) and .01(a)(A)(5) of the rule
applicable to Units based on U.S. indexes or portfolios.\14\
---------------------------------------------------------------------------
\14\ See notes 7 and 8, supra.
---------------------------------------------------------------------------
The Commission believes that the listing and trading of the Shares
is consistent with the Act. The Shares currently satisfy all but two of
the generic listing standards under the rule, and the Commission
believes that the composition of the Index, despite failing to satisfy
the requirements of Commentaries .01(a)(A)(2) and .01(a)(A)(5) to NYSE
Arca Equities Rule 5.2(j)(3), does not raise any regulatory concerns.
Additionally, the continued listing standards under NYSE Arca Equities
Rules 5.2(j)(3) and 5.5(g)(2) applicable to Units will apply to the
Shares, and the Trust is required to comply with Rule 10A-3 \15\ under
the Act for the initial and continued listing of the Shares. Finally,
the Commission notes that it has not received any comments regarding
the proposed rule change.
---------------------------------------------------------------------------
\15\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------
IV. Conclusion
For the foregoing reasons, the Commission believes that the
Exchange's proposal to list and trade the Shares is consistent with the
Act. This order is based on the Exchange's representations.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-NYSEArca-2009-12) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(1).
[[Page 16903]]
---------------------------------------------------------------------------
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-8326 Filed 4-10-09; 8:45 am]
BILLING CODE 8010-01-P
