Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to the Listing and Trading of Safety First Trust Certificates Linked to the Dow Jones Industrial Average, 21839-21843 [E9-10863]

Download as PDF Federal Register / Vol. 74, No. 89 / Monday, May 11, 2009 / Notices SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold an Open Meeting on Wednesday, May 13, 2009 at 10 a.m., in the Auditorium, Room L–002. The subject matter of the Open Meeting will be: The Commission will hear oral argument in an appeal by Thomas C. Bridge, James D. Edge, and Jeffrey K. Robles from the decision of an administrative law judge. The law judge found that Bridge, a registered representative formerly associated with A.G. Edwards, and Charles Sacco, another former A.G. Edwards registered representative who settled a related Commission proceeding against him, willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b–5 by taking action to ‘‘continue market timing after they had been restricted from doing so’’ by registered investment companies. The law judge further found that Edge, Bridge’s supervisor, failed reasonably to supervise Bridge with a view to preventing his antifraud violations, and that Robles, Sacco’s supervisor, failed reasonably to supervise Sacco. For these violations, the law judge imposed the following sanctions: Bridge was ordered to cease and desist from violating or causing violations of the antifraud provisions, to disgorge approximately $40,000 plus prejudgment interest, to pay a $250,000 civil penalty, and to serve a one-year suspension from associating with a broker or dealer. Edge and Robles were both ordered to pay a $250,000 civil penalty, were barred from associating with a broker or dealer in a supervisory capacity, and were suspended from associating with a broker or dealer in any capacity for thirty days. Among the issues likely to be argued are whether Bridge’s and Sacco’s conduct in connection with their market timing activity was fraudulent, whether Edge and Robles provided reasonable supervision under the circumstances, and, if so, whether and to what extent sanctions should be imposed on them. Commissioner Casey, as duty officer, determined that no earlier notice thereof was possible. At times, changes in Commission priorities require alterations in the scheduling of meeting items. VerDate Nov<24>2008 15:05 May 08, 2009 Jkt 217001 21839 For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. SECURITIES AND EXCHANGE COMMISSION Dated: May 7, 2009. Elizabeth M. Murphy, Secretary. [FR Doc. E9–11015 Filed 5–7–09; 11:15 am] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to the Listing and Trading of Safety First Trust Certificates Linked to the Dow Jones Industrial Average BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold an Open Meeting on Thursday, May 14, 2009 at 10 a.m., in the Auditorium, Room L–002. The subject matter of the Open Meeting will be: The Commission will consider custody-related matters, including whether to propose amendments to rule 206(4)–2 under the Investment Advisers Act of 1940 and related forms and rules. The proposed amendments would enhance the protections provided advisory clients when they entrust their funds and securities to an investment adviser. If adopted, the amendments would require investment advisers having custody of client funds and securities to obtain a surprise examination by an independent public accountant, and, unless the client assets are maintained with an independent custodian, obtain a review of custodial controls from an independent public accountant. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Dated: May 7, 2009. Elizabeth M. Murphy, Secretary. [FR Doc. E9–11077 Filed 5–7–09; 4:15 pm] BILLING CODE 8010–01–P PO 00000 [Release No. 34–59861; File No. SR– NYSEArca–2009–33] May 5, 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 April 22, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca, through its wholly-owned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or the ‘‘Corporation’’), proposes to list under NYSE Arca Equities Rule 5.2(j)(7) (‘‘Trust Certificates’’) Safety First Trust Series 2009–2, Principal-Protected Trust Certificates Linked to the Dow Jones Industrial Average. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nyx.com, at the Exchange’s principal office and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 2 17 Frm 00065 Fmt 4703 Sfmt 4703 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\11MYN1.SGM 11MYN1 21840 Federal Register / Vol. 74, No. 89 / Monday, May 11, 2009 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose As provided in NYSE Arca Equities Rule 5.2(j)(7), Trust Certificates are certificates representing an interest in a special purpose trust created pursuant to a trust agreement. The trust only issues Trust Certificates, which may or may not provide for the repayment of the original principal investment amount. The sole purpose of the trust is to invest the proceeds from its initial public offering to provide for a return linked to the performance of specified assets and to engage only in activities incidental to these objectives. Trust Certificates pay an amount at maturity based upon the performance of an underlying index or indexes of equity securities (‘‘Equity Index Reference Asset’’); instruments that are direct obligations of the issuing company, either exercisable throughout their life (i.e., American style) or exercisable only on their expiration date (i.e., European style), entitling the holder to a cash settlement in U.S. dollars to the extent that the foreign or domestic index has declined below (for a put warrant) or increased above (for a call warrant) the pre-stated cash settlement value of the index (‘‘Index Warrants’’); or a combination of two or more Equity Index Reference Assets or Index Warrants, as set forth in NYSE Arca Equities Rule 5.2(j)(7). The Exchange proposes to list under NYSE Arca Equities Rule 5.2(j)(7) the Safety First Trust Series 2009–2, Principal-Protected Trust Certificates Linked to the Dow Jones Industrial Average (‘‘Certificates’’).3 According to the Registration Statement, the Certificates are preferred securities of Safety First Trust Series 2009–2 (‘‘Trust’’) and will mature on a specified date in 2014 (‘‘Maturity Date’’).4 Investors will receive at maturity for each certificate held intact (that is, that has not been exchanged by the holder, as described below) an amount in cash equal to $10 plus a ‘‘Supplemental Distribution Amount,’’ which may be positive or zero. The Supplemental Distribution Amount will be based on the percentage change of the value of 3 See the Registration Statement for Safety First Trust Series 2009–1, dated October 31, 2008 (Nos. 333–154914, 154914–07, 154914–11); Registration Statement for Safety First Trust Series 2009–2, dated March 31, 2009 (Nos. 333–157386 and 157386–01) (‘‘Registration Statements’’). 4 The Certificates will be subject to acceleration to an earlier Maturity Date upon one of the acceleration events described in the Registration Statements. VerDate Nov<24>2008 15:05 May 08, 2009 Jkt 217001 the Dow Jones Industrial Average (‘‘Index’’) during the term of the Certificates. The Supplemental Distribution Amount for each Certificate will equal the product of (a) $10, (b) the percentage change in the value of the Index and (c) the Participation Rate, which is 100%–110%,5 provided that the Supplemental Distribution Amount will not be less than zero.6 A holder of the Certificates has an interest in two separate securities— equity index participation securities (‘‘Securities’’) and equity index warrants (‘‘Warrants’’) of Citigroup Funding Inc.7 The assets of the Trust will consist of the Securities and the Warrants. Beginning on the date the Certificates are issued and ending one business day prior to the Valuation Date,8 a holder can exercise an ‘‘exchange right.’’ A holder can exercise the exchange right by providing notice to his or her broker and instructing the broker to forward that notice to the institutional trustee for the Certificates (U.S. Bank National Association), on any business day, to exchange the Certificates the investor holds for a pro rata portion of the assets of the Trust, which consist of the Securities and the Warrants. According to the Registration Statement, such holders will lose the benefit of principal protection at maturity, and this could result in their receiving substantially less than the amount of the original investment in the Certificates. In order to exercise the exchange right, the investor’s account must be approved for options trading.9 The Securities will mature on the Maturity Date. At maturity, each Security will pay a ‘‘Security Payment’’ equal to $10 plus a ‘‘Security Return Amount,’’ which could be positive, zero or negative. If the value of the Index on the Valuation Date is greater than its value on the pricing date, the Security Return Amount for each Security will equal the product of (a) $10, (b) the percentage increase in the Index and (c) the Participation Rate, which equals 100%–110% (e.g., assuming a Participation Rate of 100%, if the Index rises 30%, the Security Return Amount would be $3.00 ($10 times 0.30 times 1.00), and the Security Payment would be $13.00 ($10 plus $3.00)). 5 The Participation Rate will be determined at the time of issuance of the Certificates. 6 The Trust payments will not be guaranteed pursuant to a financial guaranty insurance policy. 7 The Securities and Warrants will not be exchange-listed and may trade over-the-counter. 8 Capitalized terms used but not defined herein have the meanings set forth in the Registration Statements. 9 See NYSE Arca Equities Rule 5.2(j)(7), Commentary .08. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 If the value of the Index on the Valuation Date is less than or equal to its value on the pricing date, the Security Return Amount for each security will equal the product of (a) $10 and (b) the percentage decrease in the Index. Thus, because the holder’s participation in the depreciation of the Index is not limited by the Participation Rate, if the value of the Index on the Valuation Date is less than its value on the pricing date, investors will participate fully in the depreciation of the Index (e.g., if the Index falls 30%, the Security Return Amount would be ¥$3.00 ($10 times ¥0.30) and the Security Payment would be $7.00 ($10 minus $3.00). The Security Return Amount will be used only for the purpose of determining the Security Payment for the Securities and is different from the Supplemental Distribution Amount used in determining the maturity payment on the Certificates. The Warrants will be automatically exercised on the Maturity Date. If the value of the Index increases or does not change, the Warrants will pay zero. If the value of the Index decreases, the warrants will pay a positive amount equal to the product of (a) $10 and (b) the percentage decrease in the value of the Index. The Certificates are similar to securities previously approved by the Commission for listing on the Exchange, including Trust Certificates issued by Citigroup Funding, Inc. based on the Index and other indexes.10 At least one million publicly held trading units will be issued prior to listing and trading on the Exchange, with at least 400 public beneficial holders. The issuer of the Certificates, Citigroup Funding, Inc. has total assets of at least $100 million and net worth of at least $10 million. In addition, the issuer will be required to 10 See Securities Exchange Release No. 59051 (December 4, 2008), 73 FR 75155 (December 10, 2008) (SR–NYSEArca–2008–123) (order approving Rule 5.2(j)(7) and listing on the Exchange of 14 issues thereunder). Two of the issues in SR– NYSEArca–2008–123 related to Trust Certificates based on the Index and other indexes: Safety First Trust Series 2007–3 linked to the Dow Jones Industrial Average, the Dow Jones EUROSTOXX 50 Index®, the Nikkei 225 Stock Average® and the S&P BRIC® Index; Safety First Trust Series 2006– 1 Linked to the Dow Jones Industrial Average and the Nikkei 225 Stock Average®. The Certificates have similar characteristics and payout provisions to the Trust Certificates approved by the Commission in SR–NYSEArca–2008–123. In addition, the Commission has approved the listing and trading on the Exchange of Safety First Trust Series 2009–1, Principal-Protected Trust Certificates Linked to the S&P 500® Index, which have similar characteristics to the Certificates. See Securities Exchange Act Release No. 59747 (April 10, 2009), 74 FR 18012 (April 20, 2009) (SR–NYSEArca–2009– 20). E:\FR\FM\11MYN1.SGM 11MYN1 Federal Register / Vol. 74, No. 89 / Monday, May 11, 2009 / Notices have a minimum tangible net worth of $250,000,000, and, in the alternative, the issuer will be required to have a minimum tangible net worth of $150,000,000 and the original issue price of the Certificates combined with all of the issuer’s other Trust Certificates listed on a national securities exchange or otherwise publicly traded in the United States, must not be greater than 25 percent of the issuer’s tangible net worth at the time of issuance.11 The Certificates also will be subject to the continued listing criteria of NYSE Arca Equities Rule 5.2(j)(7)12 and will meet all other criteria of NYSE Arca Equities Rule 5.2(j)(7). Additional information relating to Citigroup Funding, Inc., the Trust, Certificates, Securities, Warrants, exercise right, Security Return Amount, Supplemental Distribution Amount, and risks is included in the Registration Statements. Exchange Rules Applicable to Trust Certificates The Certificates will be subject to all Exchange rules governing the trading of equity securities. The Exchange’s equity margin rules will apply to transactions in Trust Certificates. The Certificates will trade during trading hours set forth in NYSE Arca Equities Rule 7.34(a).13 11 The parameters relating to number of units, number of public beneficial holders and issuer assets and net worth and minimum tangible net worth are similar to those in NYSE Arca Equities Rule 5.2(j)(6)(A). 12 Commentary .01 provides criteria for continued listing and provides that the Corporation will commence delisting or removal proceedings with respect to an issue of Trust Certificates (unless the Commission has approved the continued trading of such issue) (i) if the aggregate market value or the principal amount of the securities publicly held is less than $400,000; (ii) if the value of the index or composite value of the indexes is no longer calculated or widely disseminated on at least a 15second basis with respect to indexes containing only securities listed on a national securities exchange, or on at least a 60-second basis with respect to indexes containing foreign country securities; or (iii) if such other event shall occur or condition exists which in the opinion of the Corporation makes further dealings on the Corporation inadvisable. 13 Pursuant to NYSE Arca Equities Rule 7.34(a), the NYSE Arca Marketplace will have three trading sessions each day the Corporation is open for business unless otherwise determined by the Corporation: Opening Session—begins at 1 a.m. (Pacific Time) and concludes at the commencement of the Core Trading Session. The Opening Auction and the Market Order Auction shall occur during the Opening Session. Core Trading Session—begins for each security at 6:30 a.m. (Pacific Time) or at the conclusion of the Market Order Auction, whichever comes later, and concludes at 1 p.m. (Pacific Time). Late Trading Session—begins following the conclusion of the Core Trading Session and concludes at 5 p.m. (Pacific Time). VerDate Nov<24>2008 15:05 May 08, 2009 Jkt 217001 21841 Trading Halts With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in Trust Certificates. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in Trust Certificates inadvisable. These may include: (1) The extent to which trading is not occurring in the underlying securities; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present.14 The Exchange’s current trading surveillance focuses on detecting when securities trade outside their normal patterns. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations. The Exchange may obtain information via ISG from other exchanges who are members of the ISG.15 In addition, the Exchange also has a generally policy prohibiting the distribution of material, non-public information by its employees. Information Dissemination The value of the Index is calculated and disseminated on at least a 15second basis. If the Index is not being disseminated as required, the Exchange may halt trading during the day on which the interruption first occurs. If such interruption persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. Quotation and last sale information will be disseminated by the Exchange via the Consolidated Tape. The value of the Index is widely disseminated by major market data vendors and financial publications. Information Bulletin Firewalls Dow Jones & Company (‘‘Dow Jones’’), which publishes the Index, is not a registered broker-dealer, and Citigroup Funding, Inc. is not affiliated with Dow Jones. With respect to any index upon which the value of an issue of Trust Certificates is based that is maintained by a broker-dealer, the Exchange would require that such broker-dealer erect a ‘‘firewall’’ around personnel responsible for the maintenance of such index or who have access to information concerning adjustments to the index, and the index would be required to be calculated by a third party who is not a broker-dealer. Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products, which include Trust Certificates, to monitor trading in the securities. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the securities in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. 14 See NYSE Arca Equities Rule 7.12, Commentary .04. PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading an issue of Trust Certificates and suitability recommendation requirements. Specifically, the Information Bulletin will discuss the following: (1) The procedures for purchases and exchanges of Trust Certificates; (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading an issue of Trust Certificates; (3) trading hours; and (4) trading information. In addition, the Information Bulletin will reference that an issue of Trust Certificates is subject to various fees and expenses described in the applicable prospectus. 2. Statutory Basis The proposed rule change is consistent with Section 6(b)16 of the Act in general and furthers the objectives of Section 6(b)(5)17 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transaction in securities, and, in general to protect investors and the public interest. The proposed rule change will permit listing on the Exchange in a timely manner of the Certificates. The Exchange believes that the provisions of NYSE Arca Equities Rule 5.2(j)(7), together with the Exchange’s applicable surveillance, 15 For a list of current members of the ISG, see https://www.isgportal.org. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(5). E:\FR\FM\11MYN1.SGM 11MYN1 21842 Federal Register / Vol. 74, No. 89 / Monday, May 11, 2009 / Notices serves to foster investor protection and the public interest.18 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. 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–NYSEArca–2009–33 and should be submitted on or before June 1, 2009. IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.19 In particular, the Commission believes that Electronic Comments the proposal is consistent with Section • Use the Commission’s Internet 6(b)(5) of the Act 20 in that it is designed comment form (https://www.sec.gov/ to prevent fraudulent and manipulative rules/sro.shtml); or acts and practices, to promote just and • Send an e-mail to ruleequitable principles of trade, to foster comments@sec.gov. Please include File Number SR–NYSEArca–2009–33 on the cooperation and coordination with persons engaged in regulating, clearing, subject line. settling, processing information with Paper Comments respect to, and facilitating transaction in securities, and, in general to protect • Send paper comments in triplicate investors and the public interest. to Elizabeth M. Murphy, Secretary, The Commission believes that the Securities and Exchange Commission, proposal to list and trade the Certificates Station Place, 100 F Street, NE., on the Exchange is consistent with Washington, DC 20549–1090. Section 11A(a)(1)(C)(iii) of the Act,21 All submissions should refer to File which sets forth Congress’ finding that Number SR–NYSEArca–2009–33. This it is in the public interest and file number should be included on the appropriate for the protection of subject line if e-mail is used. To help the investors and the maintenance of fair Commission process and review your and orderly markets to assure the comments more efficiently, please use availability to brokers, dealers, and only one method. The Commission will investors of information with respect to post all comments on the Commission’s quotations for and transactions in Internet Web site (https://www.sec.gov/ securities. The Exchange will rules/sro.shtml). Copies of the disseminate quotation and last-sale data submission, all subsequent information via the Consolidated Tape. amendments, all written statements In addition, the value of the Index is with respect to the proposed rule calculated on at least a 15-second basis change that are filed with the and is widely disseminated by major Commission, and all written market data vendors and financial communications relating to the publications. proposed rule change between the The Commission further believes that Commission and any person, other than the proposal to list and trade the those that may be withheld from the Certificates is reasonably designed to public in accordance with the promote fair disclosure of information provisions of 5 U.S.C. 552, will be 19 In approving this proposed rule change, the available for inspection and copying in III. 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: 18 E-mail from Tim Malinowski, Director, NYSE Euronext, to Edward Cho, Special Counsel, Division of Trading and Markets, Commission, dated May 4, 2009. VerDate Nov<24>2008 15:05 May 08, 2009 Jkt 217001 Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 20 15 U.S.C. 78f(b)(5). 21 15 U.S.C. 78k–1(a)(1)(C)(iii). PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 that may be necessary to price the Certificates. The Exchange represents that, if the value of the Index is not being disseminated as required, the Exchange may halt trading during the day on which the interruption first occurs. If such interruption persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. The Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in Trust Certificates.22 Dow Jones, which publishes the Index, is not a registered broker-dealer, and Citigroup Funding, Inc. is not affiliated with Dow Jones. With respect to any index upon which the value of an issue of Trust Certificates is based and that is maintained by a broker-dealer, the Exchange would require that such broker-dealer erect a ‘‘firewall’’ around personnel responsible for the maintenance of such index or who have access to information concerning adjustments to the index, and the index would be required to be calculated by a third party who is not a broker-dealer. In addition, the Exchange states that it has a general policy prohibiting the distribution of material, non-public information by its employees. The Commission also notes that the Trust Certificates will be subject to the requirements of NYSE Arca Equities Rule 5.2(j)(7), including the continued listing criteria thereunder. Additionally, NYSE Arca states that: (1) At least one million publicly held trading units will be issued prior to listing and trading on the Exchange, with at least 400 public beneficial holders; (2) the issuer, Citigroup Funding, Inc., has total assets of at least $100 million and a net worth of at least $10 million; and (3) the issuer will be required to have either (a) a minimum tangible net worth of $250,000,000, or (b) a minimum tangible net worth of $150,000,000 and the original issue price of the Certificates, combined with all of the issuer’s other Trust Certificates listed on a national securities exchange or otherwise publicly traded in the United States, must not be greater than 25% of the issuer’s tangible net worth at the time of issuance.23 22 Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in Trust Certificates inadvisable. These may include: (1) The extent to which trading is not occurring in the underlying securities; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. 23 The Commission notes that the foregoing criteria relating to the issuance and the issuer are E:\FR\FM\11MYN1.SGM 11MYN1 Federal Register / Vol. 74, No. 89 / Monday, May 11, 2009 / Notices Further, the Exchange represents that the Certificates are equity securities subject to the Exchange’s rules governing the trading of equity securities, including the Exchange’s equity margin rules. In support of this proposal, the Exchange has made representations, including: (1) The Exchange’s surveillance procedures are adequate to properly monitor Exchange trading of the Certificates in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. The Exchange may obtain information via the Intermarket Surveillance Group (‘‘ISG’’) from other exchanges who are members of the ISG. (2) Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Certificates. Specifically, the Information Bulletin will discuss the following: (a) The procedures for purchases and exchanges of Trust Certificates; (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading an issue of Trust Certificates; (c) trading hours; and (d) trading information. In addition, the Information Bulletin will reference that an issue of Trust Certificates is subject to various fees and expenses described in the applicable prospectus. This approval order is based on the Exchange’s representations. The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,24 for approving the proposed rule change prior to the 30th day after the date of publication of notice in the Federal Register. The Commission notes that it has previously approved for listing and trading on the Exchange other issues of Trust Certificates issued by Citigroup Funding, Inc. based on the Index and other indexes that have similar characteristics and payout provisions to the Certificates.25 The Commission believes that the Exchange’s proposal to list and trade the Certificates does not present any novel or significant regulatory issues. The Commission believes that accelerating substantially similar to the requirements applicable to Index-Linked Securities. See NYSE Arca Equities Rule 5.2(j)(6)(A). 24 15 U.S.C. 78s(b)(2). 25 See Securities Exchange Release Nos. 59051 (December 4, 2008), 73 FR 75155 (December 10, 2008) (SR–NYSEArca–2008–123) (approving the listing and trading of 14 issues of Trust Certificates under NYSE Arca Equities Rule 5.2(j)(7)); and 59747 (April 10, 2009), 74 FR 18012 (April 20, 2009) (SR–NYSEArca–2009–20) (approving the listing and trading of Trust Certificates linked to the S&P 500 Index). VerDate Nov<24>2008 15:05 May 08, 2009 Jkt 217001 approval of this proposal should benefit investors by creating, without undue delay, additional competition in the market for Trust Certificates. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,26 that the proposed rule change (SR–NYSEArca– 2009–33) be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–10863 Filed 5–8–09; 8:45 am] BILLING CODE 8010–01–P DEPARTMENT OF STATE [Public Notice 6608] Secretary of State’s Determination Under the International Religious Freedom Act of 1998 The Secretary of State designation of ‘‘countries of particular concern’’ for religious freedom violations. Pursuant to Section 408(a) of the International Religious Freedom Act of 1998 (Pub. L. 105–292), as amended (the Act), notice is hereby given that, on January 16, 2009, the Secretary of State, under authority delegated by the President, has designated each of the following as a ‘‘country of particular concern’’ (CPC) under section 402(b) of the Act, for having engaged in or tolerated particularly severe violations of religious freedom: Burma, China, Eritrea, Iran, North Korea, Saudi Arabia, Sudan, and Uzbekistan. The Secretary simultaneously designated the following Presidential actions for these CPCs: For Burma, the existing ongoing arms embargo referenced in 22 CFR 126.1(a), pursuant to section 402(c)(5) of the Act; For China, the existing ongoing restrictions on exports to China of crime control and detection instruments and equipment, under Public Law 101–246 and the Foreign Relations Authorization Act of 1990 and 1991, pursuant to section 402(c)(5) of the Act; For Eritrea, the existing ongoing arms embargo referenced in 22 CFR 126.1(a), pursuant to section 402(c)(5) of the Act; For Iran, the existing ongoing restrictions on United States security assistance in accordance with section 40 of the Arms Export Control Act, pursuant to section 402(c)(5) of the Act; 21843 For North Korea, the existing ongoing restrictions to which North Korea is subject pursuant to sections 402 and 409 of the Trade Act of 1974 (the JacksonVanik Amendment), pursuant to section 402(c)(5) of the Act; For Saudi Arabia, a waiver to ‘‘further the purposes of the Act,’’ pursuant to section 407 of the Act; For Sudan, the use of the voice and vote of the United States to oppose any loan or other use of the funds of international financial institutions to or for Sudan, consistent with section 1621 of the International Financial Institutions Act, pursuant to section 402(c)(5) of the Act; and For Uzbekistan, a 180-day waiver to ‘‘further the purposes of the Act,’’ pursuant to section 407 of the Act. Dated: May 5, 2009. Kurt D. Donnelly, Office Director, Office of International Religious Freedom, Department of State. [FR Doc. E9–10970 Filed 5–8–09; 8:45 am] BILLING CODE 4710–18–P SUMMARY: 26 15 27 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00069 Fmt 4703 Sfmt 4703 DEPARTMENT OF TRANSPORTATION Federal Transit Administration American Recovery and Reinvestment Act of 2009 Public Transportation Capital Investment Grants Program Appropriation and Allocations AGENCY: Federal Transit Administration (FTA), DOT. ACTION: Notice. SUMMARY: The ‘‘American Recovery and Reinvestment Act, 2009’’ (Pub. L. 111– 5; ‘‘ARRA’’), signed into law by President Barack Obama on February 17, 2009, includes $8.4 billion for transit capital improvements. The Federal Transit Administration (FTA) published in the Federal Register the transit formula program-related provisions of the ARRA, as well as program and grant application requirements for these funds, on March 5, 2009. This notice implements the Capital Investment Grants Program provisions of the ARRA and provides program and grant application requirements for these funds, for FTA’s New Starts and Small Starts programs. DATES: FTA may de-obligate and reallocate certain undisbursed funds by May 11, 2010. FOR FURTHER INFORMATION CONTACT: For general information about this notice contact Henrika Buchanan-Smith, Director, Office of Transit Programs, at (202) 366–2053. Please contact the appropriate FTA regional or E:\FR\FM\11MYN1.SGM 11MYN1

Agencies

[Federal Register Volume 74, Number 89 (Monday, May 11, 2009)]
[Notices]
[Pages 21839-21843]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10863]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59861; File No. SR-NYSEArca-2009-33]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change 
Relating to the Listing and Trading of Safety First Trust Certificates 
Linked to the Dow Jones Industrial Average

May 5, 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 April 22, 2009, NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons and is approving the proposed rule change on an accelerated 
basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    NYSE Arca, through its wholly-owned subsidiary NYSE Arca Equities, 
Inc. (``NYSE Arca Equities'' or the ``Corporation''), proposes to list 
under NYSE Arca Equities Rule 5.2(j)(7) (``Trust Certificates'') Safety 
First Trust Series 2009-2, Principal-Protected Trust Certificates 
Linked to the Dow Jones Industrial Average. The text of the proposed 
rule change is available on the Exchange's Web site at https://www.nyx.com, at the Exchange's principal office and at the Commission's 
Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item III below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

[[Page 21840]]

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

1. Purpose
    As provided in NYSE Arca Equities Rule 5.2(j)(7), Trust 
Certificates are certificates representing an interest in a special 
purpose trust created pursuant to a trust agreement. The trust only 
issues Trust Certificates, which may or may not provide for the 
repayment of the original principal investment amount. The sole purpose 
of the trust is to invest the proceeds from its initial public offering 
to provide for a return linked to the performance of specified assets 
and to engage only in activities incidental to these objectives. Trust 
Certificates pay an amount at maturity based upon the performance of an 
underlying index or indexes of equity securities (``Equity Index 
Reference Asset''); instruments that are direct obligations of the 
issuing company, either exercisable throughout their life (i.e., 
American style) or exercisable only on their expiration date (i.e., 
European style), entitling the holder to a cash settlement in U.S. 
dollars to the extent that the foreign or domestic index has declined 
below (for a put warrant) or increased above (for a call warrant) the 
pre-stated cash settlement value of the index (``Index Warrants''); or 
a combination of two or more Equity Index Reference Assets or Index 
Warrants, as set forth in NYSE Arca Equities Rule 5.2(j)(7).
    The Exchange proposes to list under NYSE Arca Equities Rule 
5.2(j)(7) the Safety First Trust Series 2009-2, Principal-Protected 
Trust Certificates Linked to the Dow Jones Industrial Average 
(``Certificates'').\3\ According to the Registration Statement, the 
Certificates are preferred securities of Safety First Trust Series 
2009-2 (``Trust'') and will mature on a specified date in 2014 
(``Maturity Date'').\4\ Investors will receive at maturity for each 
certificate held intact (that is, that has not been exchanged by the 
holder, as described below) an amount in cash equal to $10 plus a 
``Supplemental Distribution Amount,'' which may be positive or zero. 
The Supplemental Distribution Amount will be based on the percentage 
change of the value of the Dow Jones Industrial Average (``Index'') 
during the term of the Certificates. The Supplemental Distribution 
Amount for each Certificate will equal the product of (a) $10, (b) the 
percentage change in the value of the Index and (c) the Participation 
Rate, which is 100%-110%,\5\ provided that the Supplemental 
Distribution Amount will not be less than zero.\6\
---------------------------------------------------------------------------

    \3\ See the Registration Statement for Safety First Trust Series 
2009-1, dated October 31, 2008 (Nos. 333-154914, 154914-07, 154914-
11); Registration Statement for Safety First Trust Series 2009-2, 
dated March 31, 2009 (Nos. 333-157386 and 157386-01) (``Registration 
Statements'').
    \4\ The Certificates will be subject to acceleration to an 
earlier Maturity Date upon one of the acceleration events described 
in the Registration Statements.
    \5\ The Participation Rate will be determined at the time of 
issuance of the Certificates.
    \6\ The Trust payments will not be guaranteed pursuant to a 
financial guaranty insurance policy.
---------------------------------------------------------------------------

    A holder of the Certificates has an interest in two separate 
securities--equity index participation securities (``Securities'') and 
equity index warrants (``Warrants'') of Citigroup Funding Inc.\7\ The 
assets of the Trust will consist of the Securities and the Warrants. 
Beginning on the date the Certificates are issued and ending one 
business day prior to the Valuation Date,\8\ a holder can exercise an 
``exchange right.'' A holder can exercise the exchange right by 
providing notice to his or her broker and instructing the broker to 
forward that notice to the institutional trustee for the Certificates 
(U.S. Bank National Association), on any business day, to exchange the 
Certificates the investor holds for a pro rata portion of the assets of 
the Trust, which consist of the Securities and the Warrants. According 
to the Registration Statement, such holders will lose the benefit of 
principal protection at maturity, and this could result in their 
receiving substantially less than the amount of the original investment 
in the Certificates. In order to exercise the exchange right, the 
investor's account must be approved for options trading.\9\
---------------------------------------------------------------------------

    \7\ The Securities and Warrants will not be exchange-listed and 
may trade over-the-counter.
    \8\ Capitalized terms used but not defined herein have the 
meanings set forth in the Registration Statements.
    \9\ See NYSE Arca Equities Rule 5.2(j)(7), Commentary .08.
---------------------------------------------------------------------------

    The Securities will mature on the Maturity Date. At maturity, each 
Security will pay a ``Security Payment'' equal to $10 plus a ``Security 
Return Amount,'' which could be positive, zero or negative. If the 
value of the Index on the Valuation Date is greater than its value on 
the pricing date, the Security Return Amount for each Security will 
equal the product of (a) $10, (b) the percentage increase in the Index 
and (c) the Participation Rate, which equals 100%-110% (e.g., assuming 
a Participation Rate of 100%, if the Index rises 30%, the Security 
Return Amount would be $3.00 ($10 times 0.30 times 1.00), and the 
Security Payment would be $13.00 ($10 plus $3.00)).
    If the value of the Index on the Valuation Date is less than or 
equal to its value on the pricing date, the Security Return Amount for 
each security will equal the product of (a) $10 and (b) the percentage 
decrease in the Index. Thus, because the holder's participation in the 
depreciation of the Index is not limited by the Participation Rate, if 
the value of the Index on the Valuation Date is less than its value on 
the pricing date, investors will participate fully in the depreciation 
of the Index (e.g., if the Index falls 30%, the Security Return Amount 
would be -$3.00 ($10 times -0.30) and the Security Payment would be 
$7.00 ($10 minus $3.00). The Security Return Amount will be used only 
for the purpose of determining the Security Payment for the Securities 
and is different from the Supplemental Distribution Amount used in 
determining the maturity payment on the Certificates.
    The Warrants will be automatically exercised on the Maturity Date. 
If the value of the Index increases or does not change, the Warrants 
will pay zero. If the value of the Index decreases, the warrants will 
pay a positive amount equal to the product of (a) $10 and (b) the 
percentage decrease in the value of the Index.
    The Certificates are similar to securities previously approved by 
the Commission for listing on the Exchange, including Trust 
Certificates issued by Citigroup Funding, Inc. based on the Index and 
other indexes.\10\ At least one million publicly held trading units 
will be issued prior to listing and trading on the Exchange, with at 
least 400 public beneficial holders. The issuer of the Certificates, 
Citigroup Funding, Inc. has total assets of at least $100 million and 
net worth of at least $10 million. In addition, the issuer will be 
required to

[[Page 21841]]

have a minimum tangible net worth of $250,000,000, and, in the 
alternative, the issuer will be required to have a minimum tangible net 
worth of $150,000,000 and the original issue price of the Certificates 
combined with all of the issuer's other Trust Certificates listed on a 
national securities exchange or otherwise publicly traded in the United 
States, must not be greater than 25 percent of the issuer's tangible 
net worth at the time of issuance.\11\ The Certificates also will be 
subject to the continued listing criteria of NYSE Arca Equities Rule 
5.2(j)(7)\12\ and will meet all other criteria of NYSE Arca Equities 
Rule 5.2(j)(7).
---------------------------------------------------------------------------

    \10\ See Securities Exchange Release No. 59051 (December 4, 
2008), 73 FR 75155 (December 10, 2008) (SR-NYSEArca-2008-123) (order 
approving Rule 5.2(j)(7) and listing on the Exchange of 14 issues 
thereunder). Two of the issues in SR-NYSEArca-2008-123 related to 
Trust Certificates based on the Index and other indexes: Safety 
First Trust Series 2007-3 linked to the Dow Jones Industrial 
Average, the Dow Jones EUROSTOXX 50 Index[reg], the Nikkei 225 Stock 
Average[reg] and the S&P BRIC[supreg] Index; Safety First Trust 
Series 2006-1 Linked to the Dow Jones Industrial Average and the 
Nikkei 225 Stock Average[supreg]. The Certificates have similar 
characteristics and payout provisions to the Trust Certificates 
approved by the Commission in SR-NYSEArca-2008-123. In addition, the 
Commission has approved the listing and trading on the Exchange of 
Safety First Trust Series 2009-1, Principal-Protected Trust 
Certificates Linked to the S&P 500[supreg] Index, which have similar 
characteristics to the Certificates. See Securities Exchange Act 
Release No. 59747 (April 10, 2009), 74 FR 18012 (April 20, 2009) 
(SR-NYSEArca-2009-20).
    \11\ The parameters relating to number of units, number of 
public beneficial holders and issuer assets and net worth and 
minimum tangible net worth are similar to those in NYSE Arca 
Equities Rule 5.2(j)(6)(A).
    \12\ Commentary .01 provides criteria for continued listing and 
provides that the Corporation will commence delisting or removal 
proceedings with respect to an issue of Trust Certificates (unless 
the Commission has approved the continued trading of such issue) (i) 
if the aggregate market value or the principal amount of the 
securities publicly held is less than $400,000; (ii) if the value of 
the index or composite value of the indexes is no longer calculated 
or widely disseminated on at least a 15-second basis with respect to 
indexes containing only securities listed on a national securities 
exchange, or on at least a 60-second basis with respect to indexes 
containing foreign country securities; or (iii) if such other event 
shall occur or condition exists which in the opinion of the 
Corporation makes further dealings on the Corporation inadvisable.
---------------------------------------------------------------------------

    Additional information relating to Citigroup Funding, Inc., the 
Trust, Certificates, Securities, Warrants, exercise right, Security 
Return Amount, Supplemental Distribution Amount, and risks is included 
in the Registration Statements.
Exchange Rules Applicable to Trust Certificates
    The Certificates will be subject to all Exchange rules governing 
the trading of equity securities. The Exchange's equity margin rules 
will apply to transactions in Trust Certificates. The Certificates will 
trade during trading hours set forth in NYSE Arca Equities Rule 
7.34(a).\13\
---------------------------------------------------------------------------

    \13\ Pursuant to NYSE Arca Equities Rule 7.34(a), the NYSE Arca 
Marketplace will have three trading sessions each day the 
Corporation is open for business unless otherwise determined by the 
Corporation:
    Opening Session--begins at 1 a.m. (Pacific Time) and concludes 
at the commencement of the Core Trading Session. The Opening Auction 
and the Market Order Auction shall occur during the Opening Session.
    Core Trading Session--begins for each security at 6:30 a.m. 
(Pacific Time) or at the conclusion of the Market Order Auction, 
whichever comes later, and concludes at 1 p.m. (Pacific Time).
    Late Trading Session--begins following the conclusion of the 
Core Trading Session and concludes at 5 p.m. (Pacific Time).
---------------------------------------------------------------------------

Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in Trust Certificates. Trading may be halted because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in Trust Certificates inadvisable. These may include: (1) The 
extent to which trading is not occurring in the underlying securities; 
or (2) whether other unusual conditions or circumstances detrimental to 
the maintenance of a fair and orderly market are present.\14\
---------------------------------------------------------------------------

    \14\ See NYSE Arca Equities Rule 7.12, Commentary .04.
---------------------------------------------------------------------------

Information Dissemination
    The value of the Index is calculated and disseminated on at least a 
15-second basis. If the Index is not being disseminated as required, 
the Exchange may halt trading during the day on which the interruption 
first occurs. If such interruption persists past the trading day in 
which it occurred, the Exchange will halt trading no later than the 
beginning of the trading day following the interruption.
    Quotation and last sale information will be disseminated by the 
Exchange via the Consolidated Tape. The value of the Index is widely 
disseminated by major market data vendors and financial publications.
Firewalls
    Dow Jones & Company (``Dow Jones''), which publishes the Index, is 
not a registered broker-dealer, and Citigroup Funding, Inc. is not 
affiliated with Dow Jones. With respect to any index upon which the 
value of an issue of Trust Certificates is based that is maintained by 
a broker-dealer, the Exchange would require that such broker-dealer 
erect a ``firewall'' around personnel responsible for the maintenance 
of such index or who have access to information concerning adjustments 
to the index, and the index would be required to be calculated by a 
third party who is not a broker-dealer.
Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products, which include Trust 
Certificates, to monitor trading in the securities. The Exchange 
represents that these procedures are adequate to properly monitor 
Exchange trading of the securities in all trading sessions and to deter 
and detect violations of Exchange rules and applicable federal 
securities laws.
    The Exchange's current trading surveillance focuses on detecting 
when securities trade outside their normal patterns. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange may obtain information via ISG from other exchanges 
who are members of the ISG.\15\
---------------------------------------------------------------------------

    \15\ For a list of current members of the ISG, see https://www.isgportal.org.
---------------------------------------------------------------------------

    In addition, the Exchange also has a generally policy prohibiting 
the distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading an issue of Trust Certificates and 
suitability recommendation requirements.
    Specifically, the Information Bulletin will discuss the following: 
(1) The procedures for purchases and exchanges of Trust Certificates; 
(2) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due 
diligence on its ETP Holders to learn the essential facts relating to 
every customer prior to trading an issue of Trust Certificates; (3) 
trading hours; and (4) trading information.
    In addition, the Information Bulletin will reference that an issue 
of Trust Certificates is subject to various fees and expenses described 
in the applicable prospectus.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b)\16\ of the 
Act in general and furthers the objectives of Section 6(b)(5)\17\ in 
particular in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transaction in 
securities, and, in general to protect investors and the public 
interest. The proposed rule change will permit listing on the Exchange 
in a timely manner of the Certificates. The Exchange believes that the 
provisions of NYSE Arca Equities Rule 5.2(j)(7), together with the 
Exchange's applicable surveillance,

[[Page 21842]]

serves to foster investor protection and the public interest.\18\
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ E-mail from Tim Malinowski, Director, NYSE Euronext, to 
Edward Cho, Special Counsel, Division of Trading and Markets, 
Commission, dated May 4, 2009.
---------------------------------------------------------------------------

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

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

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

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

III. 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-2009-33 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2009-33. 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 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-NYSEArca-2009-33 and should 
be submitted on or before June 1, 2009.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\19\ In particular, the Commission believes that the proposal 
is consistent with Section 6(b)(5) of the Act \20\ in that it is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transaction in securities, and, in general to protect investors and the 
public interest.
---------------------------------------------------------------------------

    \19\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal to list and trade the 
Certificates on the Exchange is consistent with Section 
11A(a)(1)(C)(iii) of the Act,\21\ which sets forth Congress' finding 
that it is in the public interest and appropriate for the protection of 
investors and the maintenance of fair and orderly markets to assure the 
availability to brokers, dealers, and investors of information with 
respect to quotations for and transactions in securities. The Exchange 
will disseminate quotation and last-sale data information via the 
Consolidated Tape. In addition, the value of the Index is calculated on 
at least a 15-second basis and is widely disseminated by major market 
data vendors and financial publications.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade 
the Certificates is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Certificates. The 
Exchange represents that, if the value of the Index is not being 
disseminated as required, the Exchange may halt trading during the day 
on which the interruption first occurs. If such interruption persists 
past the trading day in which it occurred, the Exchange will halt 
trading no later than the beginning of the trading day following the 
interruption. The Exchange may consider all relevant factors in 
exercising its discretion to halt or suspend trading in Trust 
Certificates.\22\ Dow Jones, which publishes the Index, is not a 
registered broker-dealer, and Citigroup Funding, Inc. is not affiliated 
with Dow Jones. With respect to any index upon which the value of an 
issue of Trust Certificates is based and that is maintained by a 
broker-dealer, the Exchange would require that such broker-dealer erect 
a ``firewall'' around personnel responsible for the maintenance of such 
index or who have access to information concerning adjustments to the 
index, and the index would be required to be calculated by a third 
party who is not a broker-dealer. In addition, the Exchange states that 
it has a general policy prohibiting the distribution of material, non-
public information by its employees.
---------------------------------------------------------------------------

    \22\ Trading may be halted because of market conditions or for 
reasons that, in the view of the Exchange, make trading in Trust 
Certificates inadvisable. These may include: (1) The extent to which 
trading is not occurring in the underlying securities; or (2) 
whether other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present.
---------------------------------------------------------------------------

    The Commission also notes that the Trust Certificates will be 
subject to the requirements of NYSE Arca Equities Rule 5.2(j)(7), 
including the continued listing criteria thereunder. Additionally, NYSE 
Arca states that: (1) At least one million publicly held trading units 
will be issued prior to listing and trading on the Exchange, with at 
least 400 public beneficial holders; (2) the issuer, Citigroup Funding, 
Inc., has total assets of at least $100 million and a net worth of at 
least $10 million; and (3) the issuer will be required to have either 
(a) a minimum tangible net worth of $250,000,000, or (b) a minimum 
tangible net worth of $150,000,000 and the original issue price of the 
Certificates, combined with all of the issuer's other Trust 
Certificates listed on a national securities exchange or otherwise 
publicly traded in the United States, must not be greater than 25% of 
the issuer's tangible net worth at the time of issuance.\23\
---------------------------------------------------------------------------

    \23\ The Commission notes that the foregoing criteria relating 
to the issuance and the issuer are substantially similar to the 
requirements applicable to Index-Linked Securities. See NYSE Arca 
Equities Rule 5.2(j)(6)(A).

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

[[Page 21843]]

    Further, the Exchange represents that the Certificates are equity 
securities subject to the Exchange's rules governing the trading of 
equity securities, including the Exchange's equity margin rules. In 
support of this proposal, the Exchange has made representations, 
including:
    (1) The Exchange's surveillance procedures are adequate to properly 
monitor Exchange trading of the Certificates in all trading sessions 
and to deter and detect violations of Exchange rules and applicable 
federal securities laws. The Exchange may obtain information via the 
Intermarket Surveillance Group (``ISG'') from other exchanges who are 
members of the ISG.
    (2) Prior to the commencement of trading, the Exchange will inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Certificates. 
Specifically, the Information Bulletin will discuss the following: (a) 
The procedures for purchases and exchanges of Trust Certificates; (b) 
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence 
on its ETP Holders to learn the essential facts relating to every 
customer prior to trading an issue of Trust Certificates; (c) trading 
hours; and (d) trading information. In addition, the Information 
Bulletin will reference that an issue of Trust Certificates is subject 
to various fees and expenses described in the applicable prospectus.

This approval order is based on the Exchange's representations.

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\24\ for approving the proposed rule change prior to the 30th 
day after the date of publication of notice in the Federal Register. 
The Commission notes that it has previously approved for listing and 
trading on the Exchange other issues of Trust Certificates issued by 
Citigroup Funding, Inc. based on the Index and other indexes that have 
similar characteristics and payout provisions to the Certificates.\25\ 
The Commission believes that the Exchange's proposal to list and trade 
the Certificates does not present any novel or significant regulatory 
issues. The Commission believes that accelerating approval of this 
proposal should benefit investors by creating, without undue delay, 
additional competition in the market for Trust Certificates.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(2).
    \25\ See Securities Exchange Release Nos. 59051 (December 4, 
2008), 73 FR 75155 (December 10, 2008) (SR-NYSEArca-2008-123) 
(approving the listing and trading of 14 issues of Trust 
Certificates under NYSE Arca Equities Rule 5.2(j)(7)); and 59747 
(April 10, 2009), 74 FR 18012 (April 20, 2009) (SR-NYSEArca-2009-20) 
(approving the listing and trading of Trust Certificates linked to 
the S&P 500 Index).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\26\ that the proposed rule change (SR-NYSEArca-2009-33) be, and it 
hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(2).
    \27\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-10863 Filed 5-8-09; 8:45 am]
BILLING CODE 8010-01-P
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