Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Accelerated Approval of Proposed Rule Change Relating to the Listing of the United States Brent Oil Fund, LP, 20028-20030 [2010-8688]

Download as PDF 20028 Federal Register / Vol. 75, No. 73 / Friday, April 16, 2010 / Notices 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 Web site viewing and printing 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 available publicly. All submissions should refer to File Number SR–CBOE– 2010–031 and should be submitted on or before May 7, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–8687 Filed 4–15–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61881; File No. SR– NYSEArca–2010–14] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Accelerated Approval of Proposed Rule Change Relating to the Listing of the United States Brent Oil Fund, LP WReier-Aviles on DSKGBLS3C1PROD with NOTICES April 9, 2010. I. Introduction On March 3, 2010, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 units of the United States Brent Oil Fund, LP. The proposed rule change was published for comment in the Federal Register on March 24, 2010.3 The Commission 12 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. 61721 (March 16, 2010), 75 FR 14237 (‘‘Notice’’). 1 15 VerDate Nov<24>2008 15:07 Apr 15, 2010 Jkt 220001 received no comments on the proposed rule change. This order approves the proposed rule change on an accelerated basis. II. Description of Proposed Rule Change The Exchange proposes to list and trade units (‘‘Units’’) of the United States Brent Oil Fund, LP (‘‘USBO’’) pursuant to NYSE Arca Equities Rule 8.300, which governs the listing and trading of partnership units on the Exchange.4 USBO, a Delaware limited partnership, is a commodity pool that is managed and controlled by its general partner, United States Commodity Funds LLC (‘‘General Partner’’). The General Partner is a single member limited liability company that was formed in Delaware on May 10, 2005 and is registered as a commodity pool operator with the Commodity Futures Trading Commission (‘‘CFTC’’), and is a member of the National Futures Association. The General Partner is not affiliated with a broker-dealer. The Exchange represents that USBO will comply with the requirements NYSE Arca Equities Rule 8.300 5 and with the requirements of Rule 10A–3 under the Act 6 as it applies to limited partnerships. The net assets of USBO will consist primarily of investments in futures contracts for crude oil, heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the ICE Futures Exchange, New York Mercantile Exchange (‘‘NYMEX’’), or other U.S. and foreign exchanges (collectively, ‘‘Futures Contracts’’). USBO may also invest in other crude oil-related investments, such as cashsettled options on Futures Contracts, forward contracts for crude oil, cleared swap contracts and over-the-counter transactions that are based on the price of crude oil, and other petroleum-based fuels, Futures Contracts, and indices based on the foregoing (‘‘Other Crude Oil-Related Investments’’ and, together with Futures Contracts, ‘‘Crude Oil Interests’’). USBO will invest in Crude Oil Interests to the fullest extent possible without being leveraged or unable to satisfy its current or potential margin or collateral obligations with respect to its investments in Futures Contracts and 4 USBO has filed with the Commission Amendment No. 2 to Form S–1, dated January 22, 2010 (File No. 333–162015) (‘‘Registration Statement’’). 5 The Exchange represents that a minimum of 100,000 Units will be outstanding at the commencement of trading on the Exchange, the net asset value (‘‘NAV’’) per Unit will be calculated daily, and the NAV and the portfolio composition will be made available to all market participants at the same time. 6 17 CFR 240.10A–3. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 Other Crude Oil-Related Investments. The primary focus of the General Partner will be investing in Futures Contracts and the management of investments in short-term obligations of the United States of two years or less (‘‘Treasuries’’), cash and/or cash equivalents for margining purposes and as collateral. The investment objective of USBO is intended to have the daily changes in percentage terms of its Units’ NAV reflect the daily changes in percentage terms of the spot price of Brent crude oil as measured by the changes in the price of the futures contract on Brent crude oil, as traded on ICE Futures Exchange that is the near-month contract to expire, except when the near-month contract is within two weeks of expiration, in which case the futures contract will be the next-month contract to expire (‘‘Benchmark Futures Contract’’), less USBO’s expenses. The General Partner will employ a ‘‘neutral’’ investment strategy intended to track the changes in the price of the Benchmark Futures Contract regardless of whether the price goes up or goes down. USBO may invest in Crude Oil Interests other than the Benchmark Futures Contract to comply with accountability levels and position limits. On each day during a four-day period, the General Partner anticipates it will ‘‘roll’’ USBO’s positions in oil investments by closing, or selling, a percentage of USBO’s positions in Crude Oil Interests and reinvesting the proceeds from closing those positions in new Crude Oil Interests that reflect the change in the Benchmark Futures Contract. The Exchange represents that USBO will create and redeem Units only in blocks of 100,000 Units called Creation Baskets and Redemption Baskets, respectively. Only Authorized Purchasers may purchase or redeem Creation Baskets or Redemption Baskets. Additional information regarding the Units, USBO, the investment objective, policies, investment strategies, accountability levels, position limits, calculation of NAV, availability of information, trading rules and halts, and surveillance procedures, among other things, can be found in the Registration Statement and in the Notice, as applicable.7 III. Discussion and Commission’s Findings After careful review, the Commission finds that NYSE Arca’s proposal to list and trade the Units is consistent with 7 See E:\FR\FM\16APN1.SGM supra notes 3 and 4. 16APN1 Federal Register / Vol. 75, No. 73 / Friday, April 16, 2010 / Notices WReier-Aviles on DSKGBLS3C1PROD with NOTICES the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.8 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,9 which requires that an exchange have rules designed, among other things, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general to protect investors and the public interest. The Commission notes that it has previously approved the listing and trading of other petroleumbased funds that are substantially similar to USBO.10 The Commission finds that the proposal to list and trade the Units on the Exchange is also consistent with Section 11A(a)(1)(C)(iii) of the Act,11 which sets forth Congress’ finding that it is in the public interest and appropriate for the protection of investors and 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. Quotation and last-sale information for the Units will be disseminated through the facilities of the Consolidated Tape Association, and the Indicative Partnership Value (‘‘IPV’’) will be calculated, updated and disseminated on a per-Unit basis every 15 seconds during the Exchange’s Core 8 In approving this 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). 9 15 U.S.C. 78f(b)(5). 10 See, e.g., Securities Exchange Act Release Nos. 53582 (March 31, 2006), 71 FR 17510 (April 6, 2006) (SR–Amex–2005–127) (order approving listing and trading on the American Stock Exchange LLC (‘‘Amex’’) of United States Oil Fund, LP); 56831 (November 21, 2007), 72 FR 67612 (November 29, 2007) (SR–Amex–2007–98) (order approving listing and trading on the Amex of United States 12 Month Oil Fund, LP and United States 12 Month Natural Gas Fund, LP); 55632 (April 13, 2007), 72 FR 19987 (April 20, 2007) (SR–Amex–2006–112) (order approving listing and trading on the Amex of United States Natural Gas Fund, LP); 57188 (January 23, 2008), 73 FR 5607 (January 30, 2008) (SR–Amex–2007–70) (order approving listing and trading on the Amex of United States Heating Oil Fund, LP and United States Gasoline Fund, LP); 58965 (November 17, 2008), 73 FR 71078 (November 24, 2008) (SR–NYSEArca–2008–127) (order approving listing and trading on the Exchange of United States Oil Fund, LP, United States 12 Month Oil Fund, LP, United States Heating Oil Fund, LP, United States Gasoline Fund, LP, United States 12 Month Natural Gas Fund, LP and United States Natural Gas Fund, LP); and 59173 (December 29, 2008), 74 FR 490 (January 6, 2009) (SR–NYSEArca–2008–125) (order approving listing and trading on the Exchange of United States Short Oil Fund, LP). 11 15 U.S.C. 78k–l(a)(1)(C)(iii). VerDate Nov<24>2008 15:07 Apr 15, 2010 Jkt 220001 Trading Session by one or more major market data vendors. In addition, USBO will make available on its Web site on each business day its total portfolio composition that will include, as applicable, the name and value of each Crude Oil Interest, the specific types of Other Crude Oil-Related Investments, Treasuries, and the amount of cash and cash equivalents held in USBO’s portfolio. With respect to information regarding the underlying Futures Contracts, ICE Futures Exchange disseminates price information on the Futures Contracts traded on the ICE Futures Exchange on a real-time basis during normal trading hours on the ICE Futures Exchange from 8 p.m. to 6 p.m. Eastern Time. With respect to any Futures Contracts that are traded on NYMEX, NYMEX disseminates price information on a real-time basis during normal trading hours on NYMEX from 10 a.m. to 2:30 p.m. E.T. The Commission further believes that the proposal is reasonably designed to promote fair disclosure of information that may be necessary to price the Units appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Commission notes that if the Exchange becomes aware that the NAV or the portfolio composition applicable to the Units is not disseminated to all market participants at the same time, the Exchange will halt trading in the Units. Further, if the indicative partnership value or the underlying benchmark investment, commodity or asset applicable to the Units is not being disseminated as required, the Exchange may halt trading during the day in which the interruption first occurs; if the interruption persists past the trading day on which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption.12 The Exchange has represented that the Units are equity securities subject to the Exchange’s rules governing the trading of equity securities. In support of this proposal, the Exchange has made representations, including: 1. USBO will comply with the requirements of NYSE Arca Equities Rule 8.300, which includes initial and continued listing criteria. 12 Trading in the Units may also be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Units inadvisable. These may include: The extent to which trading is not occurring in the underlying Futures Contracts; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present; or (3) pursuant to the Exchange’s ‘‘circuit breaker’’ rule (see NYSE Arca Equities Rule 7.12). PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 20029 2. The Exchange has appropriate rules to facilitate transactions in this type of security in all trading sessions. 3. The Exchange’s surveillance procedures are adequate to properly monitor the trading of the Units in all trading sessions and to deter and detect violations of Exchange rules and applicable Federal securities laws. 4. 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 Units. Specifically, the Information Bulletin will discuss the following: (a) The risks involved in trading the Units during the Opening and Late Trading Sessions (for Futures Contracts traded on ICE Futures), or, in addition, part of the Core Trading Session (for Futures Contracts traded on NYMEX) when an updated IPV will not be calculated or publicly disseminated; (b) the procedures for purchases and redemptions of Units (and that Units are not individually redeemable); (c) 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 the Units; (d) how information regarding the IPV is disseminated; (e) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Units prior to or concurrently with the confirmation of a transaction; and (f) trading information. 5. USBO will be in compliance with Rule 10A–3 under the Act.13 6. To the extent that USBO invests in Futures Contracts traded on exchanges other than ICE Futures Exchange and NYMEX, not more than 10% of USBO’s assets in the aggregate shall consist of Crude Oil Interests whose principal trading market is not a member of the Intermarket Surveillance Group or is a market with which the Exchange does not have a comprehensive surveillance sharing agreement. This approval order is based on the Exchange’s representations.14 For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations 13 17 CFR 240.10A–3. Commission notes that it does not regulate the market for the futures in which USBO plans to take positions, which is the responsibility of the CFTC. The CFTC has the authority to set limits on the positions that any person may take in futures on commodities. These limits may be directly set by the CFTC, or by the markets on which the futures are traded. The Commission has no role in establishing position limits on futures in commodities, even though such limits could impact a commodity-based exchange-traded product that is under the jurisdiction of the Commission. 14 The E:\FR\FM\16APN1.SGM 16APN1 20030 Federal Register / Vol. 75, No. 73 / Friday, April 16, 2010 / Notices thereunder applicable to a national securities exchange. IV. Accelerated Approval The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,15 for approving the proposal prior to the thirtieth day after the publication of the Notice in the Federal Register. The Commission notes that it has approved the listing and trading of other limited partnerships, the characteristics of which are substantially similar to USBO.16 The Commission also notes that it has not received any comments regarding this proposal. The Commission believes that the proposal to list and trade the Units does not raise any novel regulatory issues and accelerating approval of this proposal should benefit investors by creating, without undue delay, additional competition in the market for limited partnership units. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,17 that the proposed rule change (SR–NYSEArca– 2010–14) be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–8688 Filed 4–15–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Rule Change Amending Its Fee Schedule WReier-Aviles on DSKGBLS3C1PROD with NOTICES April 7, 2010. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b-4 thereunder,3 notice is hereby given that, on March 30, 2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been U.S.C. 78s(b)(2). supra note 10 and accompanying text. 17 15 U.S.C. 78s(b)(2). 18 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b-4. 16 See VerDate Nov<24>2008 15:07 Apr 15, 2010 Jkt 220001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes changes to its Schedule of Fees and Charges for Exchange Services (the ‘‘Schedule’’). While changes to the Schedule pursuant to this proposal will be effective upon filing, the changes will become operative on April 1, 2010. The amended section of the Schedule is available on the Commission’s Website at https://www.sec.gov. A copy of this filing is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [Release No. 34–61868; File No. SR– NYSEArca-2010–21] 15 15 prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1. Purpose The Exchange is proposing changes to the Tier 1 rates and volume levels. Under this proposal, Tier 1 rates will be applied to ETP Holders and Market Makers that provide liquidity on the Exchange with an ADV per month of greater than 55 million shares. Currently the Tier 1 volume level is set at 60 million shares. The Exchange also proposes to increase the credit for orders that provide liquidity to the Book in Tape A and Tape C securities from $0.0029 per share to $0.0030 per share in Tier 1. In conjunction with these changes, the Exchange will eliminate the Super Tier. All other Tiered pricing remains the unchanged. The Exchange is also proposing to modify its fees structure for securities that execute at prices below $1. For these securities, the Exchange currently charges ETP Holders accessing liquidity PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 a fee equal to 0.1% (10 basis points) of the total dollar value of the execution and provides no credit to ETP Holders providing liquidity. Under the new fee structure, ETP Holders accessing liquidity will be charged 0.3% (30 basis points) of the total dollar value of the execution, and ETP Holder providing liquidity will be provided a credit equal to 0.25% (25 basis points) of the total dollar value of the transaction. These fees are consistent with the limitations of Regulation NMS, SEC Rule 610(c), for securities with a price of less than $1.00. The proposed changes to the Schedule are part of the Exchange’s continued effort to attract and enhance participation on the Exchange by offering volume based incentives along with attractive rates for removing liquidity and rebates for providing liquidity. The Exchange believes the proposed fees are reasonable and equitable in that they apply uniformly to all similarly situated ETP Holders. The proposed changes will become operative on April 1, 2010. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Securities Exchange Act of 1934 (the ‘‘Act’’),4 in general, and Section 6(b)(4) of the Act,5 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The proposed changes to the Schedule are part of the Exchange’s continued effort to attract and enhance participation on the Exchange by offering volume based incentives along with attractive rates for removing liquidity and rebates for providing liquidity to the Exchange. The proposed changes to the Schedule are reasonable and equitable in that they apply uniformly to all similarly situated ETP Holders. 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. 4 15 5 15 E:\FR\FM\16APN1.SGM U.S.C. 78f(b). [sic] U.S.C. 78f(b)(4). 16APN1

Agencies

[Federal Register Volume 75, Number 73 (Friday, April 16, 2010)]
[Notices]
[Pages 20028-20030]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-8688]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61881; File No. SR-NYSEArca-2010-14]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Accelerated Approval of Proposed Rule Change Relating to the Listing of 
the United States Brent Oil Fund, LP

April 9, 2010.

I. Introduction

    On March 3, 2010, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') 
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 units of the United States Brent Oil Fund, LP. The 
proposed rule change was published for comment in the Federal Register 
on March 24, 2010.\3\ The Commission received no comments on the 
proposed rule change. This order approves the proposed rule change on 
an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1)
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 61721 (March 16, 
2010), 75 FR 14237 (``Notice'').
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II. Description of Proposed Rule Change

    The Exchange proposes to list and trade units (``Units'') of the 
United States Brent Oil Fund, LP (``USBO'') pursuant to NYSE Arca 
Equities Rule 8.300, which governs the listing and trading of 
partnership units on the Exchange.\4\ USBO, a Delaware limited 
partnership, is a commodity pool that is managed and controlled by its 
general partner, United States Commodity Funds LLC (``General 
Partner''). The General Partner is a single member limited liability 
company that was formed in Delaware on May 10, 2005 and is registered 
as a commodity pool operator with the Commodity Futures Trading 
Commission (``CFTC''), and is a member of the National Futures 
Association. The General Partner is not affiliated with a broker-
dealer. The Exchange represents that USBO will comply with the 
requirements NYSE Arca Equities Rule 8.300 \5\ and with the 
requirements of Rule 10A-3 under the Act \6\ as it applies to limited 
partnerships.
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    \4\ USBO has filed with the Commission Amendment No. 2 to Form 
S-1, dated January 22, 2010 (File No. 333-162015) (``Registration 
Statement'').
    \5\ The Exchange represents that a minimum of 100,000 Units will 
be outstanding at the commencement of trading on the Exchange, the 
net asset value (``NAV'') per Unit will be calculated daily, and the 
NAV and the portfolio composition will be made available to all 
market participants at the same time.
    \6\ 17 CFR 240.10A-3.
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    The net assets of USBO will consist primarily of investments in 
futures contracts for crude oil, heating oil, gasoline, natural gas and 
other petroleum-based fuels that are traded on the ICE Futures 
Exchange, New York Mercantile Exchange (``NYMEX''), or other U.S. and 
foreign exchanges (collectively, ``Futures Contracts''). USBO may also 
invest in other crude oil-related investments, such as cash-settled 
options on Futures Contracts, forward contracts for crude oil, cleared 
swap contracts and over-the-counter transactions that are based on the 
price of crude oil, and other petroleum-based fuels, Futures Contracts, 
and indices based on the foregoing (``Other Crude Oil-Related 
Investments'' and, together with Futures Contracts, ``Crude Oil 
Interests'').
    USBO will invest in Crude Oil Interests to the fullest extent 
possible without being leveraged or unable to satisfy its current or 
potential margin or collateral obligations with respect to its 
investments in Futures Contracts and Other Crude Oil-Related 
Investments. The primary focus of the General Partner will be investing 
in Futures Contracts and the management of investments in short-term 
obligations of the United States of two years or less (``Treasuries''), 
cash and/or cash equivalents for margining purposes and as collateral.
    The investment objective of USBO is intended to have the daily 
changes in percentage terms of its Units' NAV reflect the daily changes 
in percentage terms of the spot price of Brent crude oil as measured by 
the changes in the price of the futures contract on Brent crude oil, as 
traded on ICE Futures Exchange that is the near-month contract to 
expire, except when the near-month contract is within two weeks of 
expiration, in which case the futures contract will be the next-month 
contract to expire (``Benchmark Futures Contract''), less USBO's 
expenses. The General Partner will employ a ``neutral'' investment 
strategy intended to track the changes in the price of the Benchmark 
Futures Contract regardless of whether the price goes up or goes down. 
USBO may invest in Crude Oil Interests other than the Benchmark Futures 
Contract to comply with accountability levels and position limits. On 
each day during a four-day period, the General Partner anticipates it 
will ``roll'' USBO's positions in oil investments by closing, or 
selling, a percentage of USBO's positions in Crude Oil Interests and 
reinvesting the proceeds from closing those positions in new Crude Oil 
Interests that reflect the change in the Benchmark Futures Contract.
    The Exchange represents that USBO will create and redeem Units only 
in blocks of 100,000 Units called Creation Baskets and Redemption 
Baskets, respectively. Only Authorized Purchasers may purchase or 
redeem Creation Baskets or Redemption Baskets.
    Additional information regarding the Units, USBO, the investment 
objective, policies, investment strategies, accountability levels, 
position limits, calculation of NAV, availability of information, 
trading rules and halts, and surveillance procedures, among other 
things, can be found in the Registration Statement and in the Notice, 
as applicable.\7\
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    \7\ See supra notes 3 and 4.
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III. Discussion and Commission's Findings

    After careful review, the Commission finds that NYSE Arca's 
proposal to list and trade the Units is consistent with

[[Page 20029]]

the requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\8\ In particular, the 
Commission finds that the proposed rule change is consistent with 
Section 6(b)(5) of the Act,\9\ which requires that an exchange have 
rules designed, among other things, to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and in general 
to protect investors and the public interest. The Commission notes that 
it has previously approved the listing and trading of other petroleum-
based funds that are substantially similar to USBO.\10\
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    \8\ In approving this 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).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ See, e.g., Securities Exchange Act Release Nos. 53582 
(March 31, 2006), 71 FR 17510 (April 6, 2006) (SR-Amex-2005-127) 
(order approving listing and trading on the American Stock Exchange 
LLC (``Amex'') of United States Oil Fund, LP); 56831 (November 21, 
2007), 72 FR 67612 (November 29, 2007) (SR-Amex-2007-98) (order 
approving listing and trading on the Amex of United States 12 Month 
Oil Fund, LP and United States 12 Month Natural Gas Fund, LP); 55632 
(April 13, 2007), 72 FR 19987 (April 20, 2007) (SR-Amex-2006-112) 
(order approving listing and trading on the Amex of United States 
Natural Gas Fund, LP); 57188 (January 23, 2008), 73 FR 5607 (January 
30, 2008) (SR-Amex-2007-70) (order approving listing and trading on 
the Amex of United States Heating Oil Fund, LP and United States 
Gasoline Fund, LP); 58965 (November 17, 2008), 73 FR 71078 (November 
24, 2008) (SR-NYSEArca-2008-127) (order approving listing and 
trading on the Exchange of United States Oil Fund, LP, United States 
12 Month Oil Fund, LP, United States Heating Oil Fund, LP, United 
States Gasoline Fund, LP, United States 12 Month Natural Gas Fund, 
LP and United States Natural Gas Fund, LP); and 59173 (December 29, 
2008), 74 FR 490 (January 6, 2009) (SR-NYSEArca-2008-125) (order 
approving listing and trading on the Exchange of United States Short 
Oil Fund, LP).
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    The Commission finds that the proposal to list and trade the Units 
on the Exchange is also consistent with Section 11A(a)(1)(C)(iii) of 
the Act,\11\ which sets forth Congress' finding that it is in the 
public interest and appropriate for the protection of investors and 
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. Quotation and last-
sale information for the Units will be disseminated through the 
facilities of the Consolidated Tape Association, and the Indicative 
Partnership Value (``IPV'') will be calculated, updated and 
disseminated on a per-Unit basis every 15 seconds during the Exchange's 
Core Trading Session by one or more major market data vendors. In 
addition, USBO will make available on its Web site on each business day 
its total portfolio composition that will include, as applicable, the 
name and value of each Crude Oil Interest, the specific types of Other 
Crude Oil-Related Investments, Treasuries, and the amount of cash and 
cash equivalents held in USBO's portfolio. With respect to information 
regarding the underlying Futures Contracts, ICE Futures Exchange 
disseminates price information on the Futures Contracts traded on the 
ICE Futures Exchange on a real-time basis during normal trading hours 
on the ICE Futures Exchange from 8 p.m. to 6 p.m. Eastern Time. With 
respect to any Futures Contracts that are traded on NYMEX, NYMEX 
disseminates price information on a real-time basis during normal 
trading hours on NYMEX from 10 a.m. to 2:30 p.m. E.T.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78k-l(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission further believes that the proposal is reasonably 
designed to promote fair disclosure of information that may be 
necessary to price the Units appropriately and to prevent trading when 
a reasonable degree of transparency cannot be assured. The Commission 
notes that if the Exchange becomes aware that the NAV or the portfolio 
composition applicable to the Units is not disseminated to all market 
participants at the same time, the Exchange will halt trading in the 
Units. Further, if the indicative partnership value or the underlying 
benchmark investment, commodity or asset applicable to the Units is not 
being disseminated as required, the Exchange may halt trading during 
the day in which the interruption first occurs; if the interruption 
persists past the trading day on which it occurred, the Exchange will 
halt trading no later than the beginning of the trading day following 
the interruption.\12\
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    \12\ Trading in the Units may also be halted because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in the Units inadvisable. These may include: The extent to 
which trading is not occurring in the underlying Futures Contracts; 
or (2) whether other unusual conditions or circumstances detrimental 
to the maintenance of a fair and orderly market are present; or (3) 
pursuant to the Exchange's ``circuit breaker'' rule (see NYSE Arca 
Equities Rule 7.12).
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    The Exchange has represented that the Units are equity securities 
subject to the Exchange's rules governing the trading of equity 
securities. In support of this proposal, the Exchange has made 
representations, including:
    1. USBO will comply with the requirements of NYSE Arca Equities 
Rule 8.300, which includes initial and continued listing criteria.
    2. The Exchange has appropriate rules to facilitate transactions in 
this type of security in all trading sessions.
    3. The Exchange's surveillance procedures are adequate to properly 
monitor the trading of the Units in all trading sessions and to deter 
and detect violations of Exchange rules and applicable Federal 
securities laws.
    4. 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 Units. 
Specifically, the Information Bulletin will discuss the following: (a) 
The risks involved in trading the Units during the Opening and Late 
Trading Sessions (for Futures Contracts traded on ICE Futures), or, in 
addition, part of the Core Trading Session (for Futures Contracts 
traded on NYMEX) when an updated IPV will not be calculated or publicly 
disseminated; (b) the procedures for purchases and redemptions of Units 
(and that Units are not individually redeemable); (c) 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 the Units; (d) how information regarding the IPV is 
disseminated; (e) the requirement that ETP Holders deliver a prospectus 
to investors purchasing newly issued Units prior to or concurrently 
with the confirmation of a transaction; and (f) trading information.
    5. USBO will be in compliance with Rule 10A-3 under the Act.\13\
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    \13\ 17 CFR 240.10A-3.
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    6. To the extent that USBO invests in Futures Contracts traded on 
exchanges other than ICE Futures Exchange and NYMEX, not more than 10% 
of USBO's assets in the aggregate shall consist of Crude Oil Interests 
whose principal trading market is not a member of the Intermarket 
Surveillance Group or is a market with which the Exchange does not have 
a comprehensive surveillance sharing agreement.
    This approval order is based on the Exchange's representations.\14\
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    \14\ The Commission notes that it does not regulate the market 
for the futures in which USBO plans to take positions, which is the 
responsibility of the CFTC. The CFTC has the authority to set limits 
on the positions that any person may take in futures on commodities. 
These limits may be directly set by the CFTC, or by the markets on 
which the futures are traded. The Commission has no role in 
establishing position limits on futures in commodities, even though 
such limits could impact a commodity-based exchange-traded product 
that is under the jurisdiction of the Commission.
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    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act and the rules and regulations

[[Page 20030]]

thereunder applicable to a national securities exchange.

IV. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\15\ for approving the proposal prior to the thirtieth day 
after the publication of the Notice in the Federal Register. The 
Commission notes that it has approved the listing and trading of other 
limited partnerships, the characteristics of which are substantially 
similar to USBO.\16\ The Commission also notes that it has not received 
any comments regarding this proposal. The Commission believes that the 
proposal to list and trade the Units does not raise any novel 
regulatory issues and accelerating approval of this proposal should 
benefit investors by creating, without undue delay, additional 
competition in the market for limited partnership units.
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    \15\ 15 U.S.C. 78s(b)(2).
    \16\ See supra note 10 and accompanying text.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\17\ that the proposed rule change (SR-NYSEArca-2010-14) be, and it 
hereby is, approved on an accelerated basis.
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    \17\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8688 Filed 4-15-10; 8:45 am]
BILLING CODE 8011-01-P
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