Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Relating To Listing and Trading of Shares of Twenty-Six Series of ProShares Trust II Under NYSE Arca Equities Rule 8.200, 3532-3539 [2012-1290]
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Federal Register / Vol. 77, No. 15 / Tuesday, January 24, 2012 / Notices
OCC Market Loan program11 account)
because these are effectively matched
and/or approved by other mechanisms.
DTC also seeks to conform the language
of its existing procedures pertaining to
processing of reclaims to reflect its
current practices:
(v) Receiving Participants may, only
on the same day as the original delivery,
instruct a matched reclaim transaction.
Any such matched reclaim of a DO with
a settlement value of less than $15
million and a PO with a value less than
$1 million may be processed without
reference to the collateral monitor and
net debit cap controls for the original
delivering Participant.12
III. Discussion
Section 19(b)(2)(B) of the Act directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization.13 In
particular, Section 17A(b)(3)(A)14 of the
Act requires, among other things, that
the clearing agency be so organized and
have the capacity to safeguard the
securities and funds which are in the
custody or control of such clearing
agency or for which it is responsible.
Because the proposed change would
allow DTC to enhance the risk
management controls associated with
the RAD function to reduce Participant
counterparty risk, to enhance DTC’s
liquidity management, and to facilitate
customer account transfers, the
Commission believes that the proposed
rule change is consistent with DTC’s
obligations under the Act to safeguard
securities and funds in its possession or
control for which it is responsible.
srobinson on DSK4SPTVN1PROD with NOTICES
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposal is
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the Act
and the rules and regulations
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) 15 of the Act, that the
proposed rule change (File No. SR–
11 For more information about the OCC’s Market
Loan Program, see Securities Exchange Release Act
No. 34–59298 (January 26, 2009) 74 FR 5692
(January 30, 2009) [SR–DTC–2008–15].
12 For more information regarding this change, see
Securities Exchange Release Act No. 34–48121 (July
2, 2003) 68 FR 41030 (July 2, 2003) [SR–DTC–2003–
06].
13 15 U.S.C. 78s(b)(2)(B).
14 15 U.S.C. 78q–1(b)(3)(A).
15 15 U.S.C. 78s(b)(2).
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DTC–2011–08) be, and hereby is,
approved.16
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–1289 Filed 1–23–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66180; File No. SR–
NYSEArca–2012–04]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating To Listing and
Trading of Shares of Twenty-Six Series
of ProShares Trust II Under NYSE Arca
Equities Rule 8.200
January 18, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that,
on January 6, 2012, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to list and
trade shares of the following under
NYSE Arca Equities Rule 8.200:
ProShares UltraPro Australian Dollar,
ProShares UltraPro Canadian Dollar,
ProShares UltraPro Swiss Franc,
ProShares UltraPro Euro, ProShares
UltraPro U.S. Dollar, and ProShares
UltraPro Yen (collectively, ‘‘UltraPro
Funds’’); ProShares UltraPro Short
Australian Dollar, ProShares UltraPro
Short Canadian Dollar, ProShares
UltraPro Short Swiss Franc, ProShares
UltraPro Short Euro, ProShares UltraPro
Short U.S. Dollar, and ProShares
UltraPro Short Yen (collectively,
‘‘UltraPro Short Funds’’); ProShares
Ultra Australian Dollar, ProShares Ultra
Canadian Dollar, ProShares Ultra Swiss
16 In
approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
17 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
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Franc and ProShares Ultra U.S. Dollar
(collectively, ‘‘Ultra Funds’’); ProShares
UltraShort Australian Dollar, ProShares
UltraShort Canadian Dollar, ProShares
UltraShort Swiss Franc and ProShares
UltraShort U.S. Dollar (collectively,
‘‘UltraShort Funds’’); and ProShares
Short Australian Dollar, ProShares Short
Canadian Dollar, ProShares Short Swiss
Franc, ProShares Short Euro, ProShares
Short U.S. Dollar, and ProShares Short
Yen (collectively, ‘‘Short Funds’’). The
text of the proposed rule change is
available at the Exchange, the
Commission’s Public Reference Room,
and www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NYSE Arca Equities Rule 8.200,
Commentary .02 permits the trading of
Trust Issued Receipts (‘‘TIRs’’) either by
listing or pursuant to unlisted trading
privileges (‘‘UTP’’).3 The Exchange
proposes to list and trade shares
(‘‘Shares’’) of the following pursuant to
NYSE Arca Equities Rule 8.200:
ProShares UltraPro Australian Dollar,
ProShares UltraPro Canadian Dollar,
ProShares UltraPro Swiss Franc,
ProShares UltraPro Euro, ProShares
UltraPro U.S. Dollar, ProShares UltraPro
Yen, ProShares UltraPro Short
Australian Dollar, ProShares UltraPro
Short Canadian Dollar, ProShares
UltraPro Short Swiss Franc, ProShares
UltraPro Short Euro, ProShares UltraPro
Short U.S. Dollar, ProShares UltraPro
Short Yen, ProShares Ultra Australian
Dollar, ProShares Ultra Canadian Dollar,
3 Commentary .02 to NYSE Arca Equities Rule
8.200 applies to TIRs that invest in ‘‘Financial
Instruments.’’ The term ‘‘Financial Instruments,’’ as
defined in Commentary .02(b)(4) to NYSE Arca
Equities Rule 8.200, means any combination of
investments, including cash; securities; options on
securities and indices; futures contracts; options on
futures contracts; forward contracts; equity caps,
collars and floors; and swap agreements.
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srobinson on DSK4SPTVN1PROD with NOTICES
ProShares Ultra Swiss Franc, ProShares
Ultra U.S. Dollar, ProShares UltraShort
Australian Dollar, ProShares UltraShort
Canadian Dollar, ProShares UltraShort
Swiss Franc, ProShares UltraShort U.S.
Dollar, ProShares Short Australian
Dollar, ProShares Short Canadian
Dollar, ProShares Short Swiss Franc,
ProShares Short Euro, ProShares Short
U.S. Dollar, and ProShares Short Yen
(each a ‘‘Fund’’ and, collectively,
‘‘Funds’’).4 Each of the Funds is a series
of the ProShares Trust II (‘‘Trust’’), a
Delaware statutory trust. ProShare
Capital Management LLC (‘‘Sponsor’’) is
the Trust’s sponsor and Wilmington
Trust Company is the Trust’s trustee.
Brown Brothers Harriman & Co.
(‘‘Administrator’’) serves as the
administrator, custodian and transfer
agent of the Funds. SEI Investments
Distribution Co. (‘‘Distributor’’) serves
as distributor of the Shares.
The Exchange notes that the
Commission has previously approved
the listing and trading of other series of
the Commodities and Currency Trust
(now known as ProShares Trust II) on
the American Stock Exchange LLC,5
trading on NYSE Arca pursuant to UTP 6
and listing and trading on NYSE Arca.7
The Exchange further notes that the
shares of other ProShares Ultra Funds,
UltraShort Funds and Short Funds
based on various securities indexes have
previously been approved by the
Commission.8
According to the Registration
Statement, the UltraPro Funds seek
daily investment results (before fees and
expenses) that correspond to three times
4 See registration statement on Form S–1, dated
December 22, 2011 (File No. 333–178707)
(‘‘Registration Statement’’). The description of the
Funds and the Shares contained herein is based, in
part, on the Registration Statement.
5 See, e.g., Securities Exchange Act Release No.
58161 (July 15, 2008), 73 FR 42380 (July 21, 2008)
(SR–Amex–2008–39).
6 See, e.g., Securities Exchange Act Release No.
58162 (July 15, 2008), 73 FR 42391 (July 21, 2008)
(SR–NYSEArca–2008–73).
7 See, e.g., Securities Exchange Act Release No.
58457 (September 3, 2008), 73 FR 52711 (September
10, 2008) (SR–NYSEArca–2008–91) (approving
listing of certain leveraged ProShares Funds on the
Exchange).
8 See, e.g., Securities Exchange Act Release Nos.
52553 (October 3, 2005), 70 FR 59100 (October 11,
2005) (SR–Amex–2004–62) (approving the listing
and trading of shares of the xtraShares Trust); 54040
(June 23, 2006), 71 FR 37629 (June 30, 2006) (SR–
Amex–2006–41) (approving the listing and trading
of shares of the ProShares Trust); 55117 (January 17,
2007), 72 FR 3442 (January 25, 2007) (SR–Amex
2006–101) (approving the listing and trading of
shares of the ProShares Trust); 56592 (October 1,
2007), 72 FR 57364 (October 9, 2007) (SR–Amex–
2007–60) (approving the listing and trading of 6
issues of shares of the ProShares Trust based on
international equity indexes); and 56998 (December
19, 2007), 72 FR 73404 (December 27, 2007) (SR–
Amex–2007–104) (approving the listing and trading
of shares of the ProShares Trust).
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17:25 Jan 23, 2012
Jkt 226001
(+300%) the daily performance, whether
positive or negative, of their
corresponding benchmark and the
UltraPro Short Funds seek daily
investment results (before fees and
expenses) that correspond to three times
the inverse (¥300%) of the daily
performance, whether positive or
negative, of their corresponding
benchmark. The Ultra Funds seek daily
investment results (before fees and
expenses) that correspond to twice
(+200%) the daily performance, whether
positive or negative, of their
corresponding benchmarks and the
UltraShort Funds seek daily investment
results (before fees and expenses) that
correspond to twice the inverse
(¥200%) of the daily performance,
whether positive or negative, of their
corresponding benchmarks. The Short
Funds seek daily investment results
(before fees and expenses) that
correspond to the inverse (¥100%) of
the daily performance, whether positive
or negative, of their corresponding
benchmarks. Each reference to a
corresponding benchmark is a
‘‘Benchmark’’ and together,
‘‘Benchmarks,’’ as described below.
Each of the Funds will hold futures
contracts on the applicable Benchmark
and, in the case of a Benchmark index,
futures on such Benchmark index or the
Benchmark index components, traded
on a United States exchange
(‘‘Benchmark Futures Contracts’’) and,
to a limited extent, forward contracts, as
described below, to produce the
economically ‘‘inverse,’’ ‘‘leveraged,’’
and ‘‘inverse leveraged’’ investment
results, as set forth by each Fund’s
investment objective.9
According to the Registration
Statement, each Fund seeks to achieve
its investment objective by investing
under normal market conditions,10 in
Benchmark Futures Contracts. In the
event position accountability rules or
position limits are reached with respect
to a particular Benchmark Futures
Contract, the Sponsor may, in its
commercially reasonable judgment,
cause the relevant Fund to obtain
exposure through over-the-counter
forward contracts referencing the
particular exchange rate, index or index
9 Terms relating to the Funds, the Shares and the
Benchmarks referred to, but not defined, herein are
defined in the Registration Statement.
10 The term ‘‘under normal conditions’’ [sic]
includes, but is not limited to, the absence of
extreme volatility or trading halts in the futures
markets or the financial markets generally;
operational issues causing dissemination of
inaccurate market information; or force majeure
type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of
terrorism, riot or labor disruption or any similar
intervening circumstance.
PO 00000
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3533
components, or invest in other forward
contracts not based on the particular
exchange rate, if such instruments tend
to exhibit trading prices or returns that
correlate with the Benchmarks or any
Benchmark Futures Contract and will
further the investment objective of a
Fund.11 A Fund may also invest in
forward contracts if the market for a
specific Benchmark Futures Contract
experiences emergencies (e.g., natural
disaster, terrorist attack or an act of God)
or disruptions (e.g., a trading halt or a
flash crash) to prevent a Fund from
obtaining the appropriate amount of
investment exposure to the affected
Benchmark Futures Contracts directly.12
Each Fund will also invest in cash
equivalents (such as shares of money
market funds, bank deposits, bank
money market accounts, certain variable
rate-demand notes and repurchase
agreements collateralized by
government securities, whether
denominated in U.S. dollars or the
applicable foreign currency) that serve
or will serve as collateral for the
investments in futures and forward
contracts. The Funds do not currently
intend to invest directly in any currency
but may invest directly in U.S. Treasury
securities.
The Funds’ investment in Benchmark
Futures Contracts and forward contracts
may involve a small investment relative
to the amount of investment exposure
assumed and may result in losses
exceeding the amounts invested. Such
instruments, particularly when used to
create leverage, may expose the Funds
to potentially dramatic changes (losses
or gains) in the value of the instruments
and imperfect correlation between the
value of the instruments and the
applicable Benchmark.
The Funds will not seek to achieve
their stated investment objective over a
period of time greater than one day
because mathematical compounding
prevents the Funds from perfectly
achieving such results. Accordingly,
results over periods of time greater than
one day typically will not be a simple
multiple (e.g., 2x, 3x, or ¥1x, ¥2x,
¥3x) of the period return of the
corresponding Benchmark and may
differ significantly.
If an UltraPro Fund (or UltraPro Short
Fund) is successful in meeting its
11 To the extent practicable, the Funds will invest
in forward contracts cleared through the facilities
of a centralized clearing house.
12 According to the Registration Statement, the
Sponsor will also attempt to mitigate the Funds’
credit risk by transacting only with large, wellcapitalized institutions using measures designed to
determine the creditworthiness of a counterparty.
The Sponsor will take various steps to limit
counterparty credit risk, as described in the
Registration Statement.
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srobinson on DSK4SPTVN1PROD with NOTICES
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Federal Register / Vol. 77, No. 15 / Tuesday, January 24, 2012 / Notices
objective, its value on a given day
(before fees and expenses) should gain
(or lose) approximately three times as
much on a percentage basis as its
corresponding Benchmark when the
Benchmark rises on a given day.
Conversely, its value on a given day
(before fees and expenses) should lose
(or gain) approximately three times as
much on a percentage basis as the
corresponding Benchmark when the
Benchmark declines on a given day.
If an Ultra Fund (or UltraShort Fund)
is successful in meeting its objective, its
value on a given day (before fees and
expenses) should gain (or lose)
approximately twice as much on a
percentage basis as its corresponding
Benchmark when the Benchmark rises
on a given day. Conversely, its value on
a given day (before fees and expenses)
should lose (or gain) approximately
twice as much on a percentage basis as
the corresponding Benchmark when the
Benchmark declines on a given day.
If a Short Fund is successful in
meeting its objective, its value on a
given day (before fees and expenses)
should gain approximately as much on
a percentage basis as the corresponding
Benchmark when the Benchmark
declines on a given day. Conversely, its
value on a given day (before fees and
expenses) should lose approximately as
much on a percentage basis as the
corresponding Benchmark when the
Benchmark rises on a given day.
In seeking to achieve each Fund’s
daily investment objective, the Sponsor
will use a mathematical approach to
investing. Using this approach, the
Sponsor will determine the type,
quantity and mix of investment
positions that the Sponsor believes in
combination should produce daily
returns consistent with a Fund’s
objective. The Sponsor will rely upon a
pre-determined model to generate
orders that result in repositioning each
Fund’s investments in accordance with
its daily investment objectives.
According to the Registration
Statement, a number of factors may
affect a Fund’s ability to achieve a high
degree of correlation with its
Benchmark, and there can be no
guarantee that a Fund will achieve a
high degree of correlation. While the
Funds do not expect that their daily
returns will deviate adversely from their
respective daily investment objectives,
several factors may affect their ability to
achieve this correlation. Among these
factors are a Fund’s expenses, including
fees, transaction costs and the cost of
the investment techniques employed by
that Fund, bid-ask spreads, a Fund’s
Share prices being rounded to the
nearest cent, changes to a Benchmark
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Jkt 226001
that are not disseminated in advance
and the need to conform a Fund’s
portfolio holdings to comply with
investment restrictions or policies or
regulatory or tax law requirements.
ProShares UltraPro Australian Dollar,
ProShares UltraPro Short Australian
Dollar, ProShares Ultra Australian
Dollar, ProShares UltraShort Australian
Dollar, and ProShares Short Australian
Dollar
These Funds will be designed to track
a multiple, the inverse or an inverse
multiple of the daily performance of the
Australian dollar spot price versus the
U.S. dollar (‘‘AUD/USD’’). The
Benchmark for each of these Funds will
be the U.S. dollar price of the Australian
dollar. These Funds will use the 4 p.m.
Eastern Time (‘‘E.T.’’) Australian Dollar
exchange rate as provided by
Bloomberg, expressed in terms of U.S.
dollars per unit of foreign currency, as
the basis for the underlying Benchmark.
The Australian dollar is the national
currency of Australia and the currency
of the accounts of the Reserve Bank of
Australia, the Australian central bank.
The official currency code for the
Australian dollar is ‘‘AUD.’’ The
Australian dollar is referred to in
Australia as ‘‘dollar.’’ As with U.S.
currency, 100 Australian cents are equal
to one Australian dollar. In Australia,
unlike most other countries, cash
transactions are rounded to the nearest
five cents. The most commonly used
symbol used to represent the Australian
dollar is ‘‘A$.’’
As of December 30, 2011, open
interest in AUD/USD futures contracts
traded on the Chicago Mercantile
Exchange (‘‘CME’’) was $11.56 billion.
AUD/USD futures contracts had an
average daily trading volume in 2011 of
123,006 contracts.
ProShares UltraPro Canadian Dollar,
ProShares UltraPro Short Canadian
Dollar, ProShares Ultra Canadian Dollar,
ProShares UltraShort Canadian Dollar,
and ProShares Short Canadian Dollar
These Funds will be designed to track
a multiple, the inverse or an inverse
multiple of the daily performance of the
Canadian dollar spot price versus the
U.S. dollar (CAD/USD). The Benchmark
for each of these Funds will be the U.S.
dollar price of the Canadian dollar.
These Funds will use the 4 p.m. E.T.
Canadian dollar exchange rate as
provided by Bloomberg, expressed in
terms of U.S. dollars per unit of foreign
currency, as the basis for the underlying
Benchmark. The Canadian Dollar is the
national currency of Canada and the
currency of the accounts of the Bank of
Canada, the Canadian central bank. The
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Fmt 4703
Sfmt 4703
official currency code for the Canadian
dollar is ‘‘CAD.’’ As with U.S. currency,
100 Canadian cents are equal to one
Canadian dollar.
As of December 30, 2011, open
interest in CAD/USD futures contracts
traded on CME was $11.66 billion.
CAD/USD futures contracts had an
average daily trading volume in 2011 of
89,667 contracts.
ProShares UltraPro Swiss Franc,
ProShares UltraPro Short Swiss Franc,
ProShares Ultra Swiss Franc, ProShares
UltraShort Swiss Franc, and ProShares
Short Swiss Franc
These Funds will be designed to track
a multiple, the inverse or an inverse
multiple of the daily performance of the
Swiss franc spot price versus the U.S.
dollar (‘‘CHF/USD’’). The Benchmark
for each of these Funds will be the U.S.
dollar price of the Swiss Franc. These
Funds will use the 4 p.m. E.T. Swiss
franc exchange rate as provided by
Bloomberg, expressed in terms of U.S.
dollars per unit of foreign currency, as
the basis for the underlying Benchmark.
The Swiss franc is the national currency
of Switzerland and Liechtenstein and
the currency of the accounts of the
Swiss National Bank, the central bank of
Switzerland. The official currency code
for the Swiss franc is ‘‘CHF.’’ Each
Swiss franc is equal to 100 Swiss
centimes.
As of December 30, 2011, open
interest in CHF/USD futures contracts
traded on CME was $4.99 billion.
CHF/USD futures contracts had an
average daily trading volume in 2011 of
40,955 contracts.
ProShares UltraPro Euro, ProShares
UltraPro Short Euro, and ProShares
Short Euro
These Funds will be designed to track
a multiple, the inverse, or an inverse
multiple of the daily change in the spot
price of the euro versus the U.S. dollar
(‘‘EUR/USD’’). The Benchmark for each
of these Funds will be the U.S. dollar
price of the Euro. These Funds will use
the 4 p.m. E.T. Euro exchange rate as
provided by Bloomberg, expressed in
terms of U.S. dollars per unit of foreign
currency, as the basis for the underlying
Benchmark. The Euro is the official
currency of the Eurozone, which
consists of 17 European states
including: Austria, Belgium, Cyprus,
Estonia, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg,
Malta, the Netherlands, Portugal,
Slovakia, Slovenia, and Spain. The Euro
is managed and administered by the
European Central Bank and the
European System of Central Banks. As
of December 30, 2011, open interest in
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EUR\USD futures contracts traded on
CME was $46.12 billion. EUR\USD
futures contracts had an average daily
trading volume in 2011 of 336,947
contracts.
ProShares UltraPro U.S. Dollar,
ProShares UltraPro Short U.S. Dollar,
ProShares Ultra U.S. Dollar, ProShares
UltraShort U.S. Dollar, and ProShares
Short U.S. Dollar
These Funds will be designed to track
a multiple, the inverse or an inverse
multiple of the daily performance of
their Benchmark, the U.S. Dollar Index
(‘‘U.S. Dollar Index’’ or ‘‘Index’’).13 The
U.S. Dollar Index is a geometricallyaveraged calculation of six currencies
weighted against the U.S. dollar. The six
component currencies are the Euro,
Japanese yen, British pound, Canadian
dollar, Swedish krona and Swiss franc.
The component currencies do not have
the same weight. The Euro has a
weighting of 57.6%, the Japanese yen a
weighting of 13.6%, the British pound
a weighting of 11.9%, the Canadian
dollar a weighting of 9.1%, the Swedish
krona a weighting of 4.2% and the
Swiss franc a weighting of 3.6%. The
U.S. Dollar Index is calculated by
Bloomberg in real time approximately
every 15 seconds using the spot prices
of the Index’s component currencies.
The price used for the calculation of the
Index is the mid-point between the
Bloomberg top of the book bid/offer in
the component currencies.
In addition to the data on EUR/USD,
CAD/USD, CHF/USD and JPY/USD
futures contracts stated herein, as of
December 30, 2011, open interest in
U.S. Dollar Index futures contracts
traded on ICE was $5.44 billion. U.S.
Dollar Index futures contracts had an
average daily trading volume in 2011 of
30,341 contracts. Open interest in
British pound (‘‘GBP/USD’’) futures
contracts traded on the CME was $19.59
billion, and GBP/USD futures contracts
had an average daily trading volume in
2011 of 116,115 contracts. Open interest
in Swedish krona (‘‘SEK/USD’’) futures
contracts traded on the CME was $16.79
million, and SEK/USD futures contracts
had an average daily trading volume of
8 contracts.
ProShares UltraPro Yen, ProShares
UltraPro Short Yen, and ProShares
Short Yen
These Funds will be designed to track
a multiple, the inverse or an inverse
multiple of the daily performance of the
Japanese yen spot price versus the U.S.
dollar (‘‘JPY/USD’’). The Benchmark for
each of these Funds will be the U.S.
dollar price of the Japanese yen. These
Funds will use the 4 p.m. E.T. Japanese
yen exchange rate as provided by
Bloomberg, expressed in terms of U.S.
dollars per unit of foreign currency, as
the basis for the underlying Benchmark.
The Japanese yen has been the official
currency of Japan since 1871. The Bank
of Japan has been operating as the
central bank of Japan since 1882. The
official currency code for the Japanese
yen is ‘‘YEN.’’
As of December 30, 2011, open
interest in JPY/USD futures contracts
traded on the CME was $25.75 billion.
JPY/USD futures contracts had an
average daily trading volume in 2011 of
113,476 contracts.
Benchmark Futures Contracts Held by
the Funds
All open Benchmark Futures
Contracts held by the Funds will be
traded on a United States exchange and
will be calculated at their then current
market value, based upon the last traded
price before the net asset value (‘‘NAV’’)
calculation time, for that particular
futures contract traded on the applicable
United States exchange on the date with
respect to which NAV is being
determined; provided, that if a futures
contract traded on a United States
exchange could not be liquidated on
such day, due to the operation of daily
limits or other rules of the exchange
upon which that position is traded or
otherwise, the Sponsor may in its sole
discretion choose to determine a fair
value price as the basis for determining
the market value of such position for
such day.
The Benchmark Futures Contracts
trade on the follow exchanges:
Fund benchmarks
Benchmark futures contracts
Australian dollar/US dollar exchange rate ....................................................................
Canadian dollar/US dollar exchange rate .....................................................................
European euro/US dollar exchange rate ......................................................................
Japanese yen/US dollar exchange rate ........................................................................
Swiss franc/US dollar exchange rate ............................................................................
US Dollar Index .............................................................................................................
AUD/USD ..................................................
CAD/USD ..................................................
EUR/USD ..................................................
JPY/USD ...................................................
CHF/USD ..................................................
USDX ........................................................
CAD/USD ..................................................
CHF/USD ..................................................
EUR/USD ..................................................
GBP/USD ..................................................
JPY/USD ...................................................
SEK/USD ...................................................
Exchange 14
CME
CME
CME
CME
CME
ICE
CME
CME
CME
CME
CME
CME
srobinson on DSK4SPTVN1PROD with NOTICES
The daily 4 p.m. E.T. closing value for
each Benchmark is published daily on
www.wsj.com. The value of the
Benchmarks will be disseminated by
one or more major market data vendors
and will be updated at least every 15
seconds during the Exchange’s Core
Trading Session. Data regarding the
Benchmarks is also available from the
respective Benchmark provider to
subscribers.15
13 The U.S. Dollar Index was created by the U.S.
Federal Reserve in 1973. Following the ending of
the 1944 Bretton Woods Agreement, which had
established a system of fixed exchange rates, the
U.S. Federal Reserve Bank began the calculation of
the U.S. Dollar Index to provide an external
bilateral trade-weighted average of the U.S. dollar
as it freely floated against global currencies. Futures
contracts based on the U.S. Dollar Index (‘‘USDX’’
or ‘‘U.S. Dollar Index futures contracts’’) were listed
on November 20, 1985, and are now available only
on the IntercontinentalExchange (‘‘ICE’’) electronic
trading platform. Options on the futures contracts
began trading on September 3, 1986, and are
available both on the ICE electronic trading
platform and on the ICE options trading floor.
14 Each Benchmark Futures Contract trades
electronically for 21 or more hours each trading
session, beginning every Sunday evening and
closing for the week on the following Friday
evening.
15 ICE Futures U.S., Inc. compiles, maintains,
determines and weights the components of the U.S.
Dollar Index. The U.S. Dollar Index and USDX are
trademarks and service marks of ICE Futures U.S.,
Inc. registered in the United States, Great Britain,
the European Union and Japan and used under
license. ICE Futures U.S., Inc. is not engaged in the
business of trading in commodities or securities but
operates a derivatives exchange. ICE Futures U.S.,
Inc. maintains a Code of Conduct applicable to all
personnel that prohibits disclosure of any
confidential information obtained during the course
of one’s employment and the use or disclosure of
any material non-public information relating to
Continued
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srobinson on DSK4SPTVN1PROD with NOTICES
Net Asset Value
According to the Registration
Statement, the NAV of each Fund will
be total assets including, but not limited
to, all cash and cash equivalents or
other debt securities, less total
liabilities, each determined on the basis
of generally accepted accounting
principles. In particular, the NAV will
include any unrealized profit or loss on
Benchmark Futures Contracts and other
Fund holdings, and any other credit or
debit accruing to a Fund but unpaid or
not received by a Fund.
The NAV per Share of each Fund will
be computed by dividing the value of
the net assets of such Fund (i.e., the
value of its total assets, less total
liabilities) by its total number of Shares
outstanding. Expenses and fees will be
accrued daily and taken into account for
purposes of determining NAV. The NAV
of each Fund will be calculated by the
Administrator and will be determined
each business day as described in the
Registration Statement.
Creation and Redemption of Shares
According to the Registration
Statement, the Funds will create and
redeem Shares from time to time, but
only in one or more ‘‘Creation Units.’’
A Creation Unit is a block of 50,000
Shares of a Fund. Creation Units may be
created or redeemed only by authorized
participants, as described in the
Registration Statement. Except when
aggregated in Creation Units, the Shares
will not be redeemable securities.
Authorized participants may pay a fixed
and variable transaction fee in
connection with each order to create or
redeem a Creation Unit. Authorized
participants may sell the Shares
included in the Creation Units they
purchase from the Funds to other
investors. On any business day, an
authorized participant may place an
order with the Distributor to create one
or more Creation Units. An order to
create or redeem Shares must be placed
by 3 p.m. E.T. The total cash payment
required to create each Creation Unit
will be the NAV of 50,000 Shares of the
applicable Fund on the purchase order
date plus the applicable transaction fee.
According to the Registration
Statement, the procedures by which an
authorized participant can redeem one
or more Creation Units will mirror the
procedures for the purchase of Creation
Units. On any business day, an
authorized participant may place an
order with the Distributor to redeem one
or more Creation Units. Individual
changes to the composition of the U.S. Dollar Index
or changes to the U.S. Dollar Index methodology in
violation of applicable laws, rules or regulations.
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17:25 Jan 23, 2012
Jkt 226001
shareholders may not redeem directly
from a Fund.
By placing a redemption order, an
authorized participant agrees to deliver
the Creation Units to be redeemed
through DTC’s book-entry system to the
applicable Fund not later than noon
E.T., on the third business day
immediately following the redemption
order date (T+3). The redemption
proceeds from a Fund will consist of the
cash redemption amount. The cash
redemption amount will be equal to the
NAV of the number of Creation Unit(s)
of such Fund requested in the
authorized participant’s redemption
order as of the time of the calculation of
such Fund’s NAV on the redemption
order date, less transaction fees, as
described in the Registration Statement.
Availability of Information Regarding
the Shares
The Web site for the Funds
(www.proshares.com) and/or the
Exchange, which are publicly accessible
at no charge, will contain the following
information: (a) The current NAV per
Share daily and the prior business day’s
NAV per Share; (b) calculation of the
premium or discount of the closing
market price against the NAV per Share;
(c) the prospectus; and (d) other
applicable quantitative information.
The NAV per Share will be calculated
and disseminated daily. One or more
major market data vendors will
disseminate for the Funds on a daily
basis information with respect to the
corresponding Indicative Optimized
Portfolio Value (‘‘IOPV’’) (as discussed
below), recent NAV per Share and
Shares outstanding. The Exchange will
also make available on its Web site
(www.nyse.com) daily trading volume of
the Shares, closing prices of the Shares,
and the NAV per Share. The intraday
pricing and settlement values of the
Benchmark Futures Contracts held by
the Funds are also available from the
CME, the ICE, and other public sources
or on-line information services such as
www.ino.com. Real-time dissemination
of spot pricing for the Australian dollar,
Canadian dollar, Swiss franc, Euro and
Japanese yen and data for the U.S.
Dollar Index are available from various
major market data vendors. Quotation
and last sale information for the Shares
will be available via the Consolidated
Tape Association (‘‘CTA’’) high-speed
line.
Portfolio Disclosure
Each Fund’s total portfolio
composition will be disclosed on the
Funds’ Web site or another relevant
Web site as determined by the Trust
and/or the Exchange. The Trust will
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
provide Web site disclosure of portfolio
holdings daily and will include, as
applicable, the description and notional
value (in U.S. dollars) of the Funds’
investments in Benchmark Futures
Contracts and forward contracts, if any,
cash equivalents and amount of cash
held in the portfolio of each Fund. This
public Web site disclosure of the
portfolio composition of each Fund will
occur at the same time as the disclosure
by the Sponsor of the portfolio
composition to authorized participants,
so that all market participants are
provided portfolio composition
information at the same time. Therefore,
the same portfolio information will be
provided on the public Web site as well
as in electronic files provided to
authorized participants. Accordingly,
each investor will have access to the
current portfolio composition of each
Fund through the Funds’ Web site.
Dissemination of Net Asset Value and
Indicative Optimized Portfolio Value
The Administrator will calculate and
disseminate, once each trading day, the
NAV per Share to market participants.
The NAV calculation time for each
Fund will be 4 p.m. E.T. The Exchange
will obtain a representation (prior to
listing of the Funds) from the Trust that
the NAV per Share will be calculated
daily and made available to all market
participants at the same time. In
addition, the Sponsor will cause to be
made available on a daily basis the total
payment required to create each
Creation Unit of the applicable Fund on
the purchase order date in connection
with the issuance of the respective
Shares.
The IOPV relating to Shares of each
Fund will be widely disseminated by
one or more major market data vendors
at least every 15 seconds during the
Core Trading Session.16 The IOPV will
be an indicator of the value of the
investments and cash and receivables
less liabilities of a Fund at the time the
IOPV is disseminated. The IOPV will be
calculated by NYSE Arca using the prior
day’s closing net assets of each Fund as
a base and updating throughout the Core
Trading Session changes in the value of
Benchmark Futures Contracts and
forward contracts, if any, held by the
Fund. The IOPV should not be viewed
as an actual real time update of the NAV
because NAV is calculated only once at
the end of each trading day. The IOPV
also should not be viewed as a precise
value of the Shares.
16 Currently, it is the Exchange’s understanding
that several major market data vendors display and/
or make widely available IOPV published on CTA
or other data feeds.
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srobinson on DSK4SPTVN1PROD with NOTICES
Criteria for Initial and Continued Listing
The Funds will be subject to the
criteria in NYSE Arca Equities Rule
8.200 and Commentary .02 thereto for
initial and continued listing of the
Shares.
The minimum number of Shares for
each Fund to be outstanding at the start
of trading will be 100,000 Shares. The
Exchange believes that this minimum
number of Shares for each Fund to be
outstanding at the start of trading is
sufficient to provide adequate market
liquidity and to further the objectives of
the Funds. The Exchange represents
that, for the initial and continued listing
of the Shares, the Funds must be in
compliance with NYSE Arca Equities
Rule 5.3 and Rule 10A–3 under the Act.
Trading Rules
The Exchange deems the Shares to be
equity securities, thus rendering trading
in the Shares subject to the Exchange’s
existing rules governing the trading of
equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m.
to 8 p.m. E.T.17 The Exchange has
appropriate rules to facilitate
transactions in the Shares during all
trading sessions. As provided in NYSE
Arca Equities Rule 7.6, Commentary .03,
the minimum price variation (‘‘MPV’’)
for quoting and entry of orders in equity
securities traded on the NYSE Arca
Marketplace is $0.01, with the exception
of securities that are priced less than
$1.00 for which the MPV for order entry
is $0.0001.
The trading of the Shares will be
subject to NYSE Arca Equities Rule
8.200, Commentary .02(e), which sets
forth certain restrictions on Equity
Trading Permit (‘‘ETP’’) Holders acting
as registered Market Makers in TIRs to
facilitate surveillance. See
‘‘Surveillance’’ below for more
information.
With respect to trading halts, the
Exchange may consider all relevant
factors in exercising its discretion to
halt or suspend trading in the Shares.
Trading may be halted because of
market conditions or for reasons that, in
the view of the Exchange, make trading
in the Shares inadvisable. These may
include: (1) The extent to which trading
is not occurring in the underlying
Benchmark Futures Contracts, or (2)
whether other unusual conditions or
circumstances detrimental to the
maintenance of a fair and orderly
market are present. In addition, trading
in Shares will be subject to trading halts
caused by extraordinary market
17 See NYSE Arca Equities Rule 7.34 regarding
hours for the NYSE Arca Opening, Core and Late
Trading Sessions.
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17:25 Jan 23, 2012
Jkt 226001
volatility pursuant to the Exchange’s
‘‘circuit breaker’’ rule 18 or by the halt or
suspension of trading of the underlying
Benchmark Futures Contracts.
The Exchange represents that the
Exchange may halt trading during the
day in which an interruption to the
dissemination of the IOPV, the
Benchmark value, or the value of the
underlying Benchmark Futures
Contracts occurs. If the interruption to
the dissemination of the IOPV, the
Benchmark value, or the value of the
underlying Benchmark Futures
Contracts 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. In addition, if the
Exchange becomes aware that the NAV
with respect to the Shares is not
disseminated to all market participants
at the same time, it will halt trading in
the Shares until such time as the NAV
is available to all market participants.
Surveillance
The Exchange intends to utilize its
existing surveillance procedures
applicable to derivative products,
including TIRs, to monitor trading in
the Shares. The Exchange represents
that these procedures are adequate to
properly monitor Exchange trading of
the Shares 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
securities trading 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 can obtain market
surveillance information, including
customer identity information, with
respect to transactions occurring on the
ICE and the CME in that these markets
are members of the Intermarket
Surveillance Group (‘‘ISG’’). A list of
ISG members is available at
www.isgportal.org.19
The Exchange also has a general
policy prohibiting the distribution of
material, non-public information by its
employees.
18 See
NYSE Arca Equities Rule 7.12.
Exchange may obtain information
regarding Benchmark Futures Contracts from
exchanges with which the Exchange has entered
into a surveillance sharing agreement or that are
ISG members. The Exchange notes that not all
components of the portfolio for the Funds may
trade on markets that are members of ISG or with
which the Exchange has in place a comprehensive
surveillance sharing agreement.
19 The
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
3537
Suitability
Currently, NYSE Arca Equities Rule
9.2(a) (Diligence as to Accounts)
provides that an ETP Holder, before
recommending a transaction in any
security, must have reasonable grounds
to believe that the recommendation is
suitable for the customer based on any
facts disclosed by the customer as to its
other security holdings and as to its
financial situation and needs. Further,
the rule provides, with a limited
exception, that prior to the execution of
a transaction recommended to a noninstitutional customer, the ETP Holder
must make reasonable efforts to obtain
information concerning the customer’s
financial status, tax status, investment
objectives, and any other information
that such ETP Holder believes would be
useful to make a recommendation.
Prior to the commencement of
trading, the Exchange will inform its
ETP Holders of the suitability
requirements of NYSE Arca Equities
Rule 9.2(a) in an Information Bulletin.
Specifically, ETP Holders will be
reminded in the Information Bulletin
that, in recommending transactions in
these securities, they must have a
reasonable basis to believe that (1) the
recommendation is suitable for a
customer given reasonable inquiry
concerning the customer’s investment
objectives, financial situation, needs,
and any other information known by
such member, and (2) the customer can
evaluate the special characteristics, and
is able to bear the financial risks, of an
investment in the Shares. In connection
with the suitability obligation, the
Information Bulletin will also provide
that members must make reasonable
efforts to obtain the following
information: (1) The customer’s
financial status; (2) the customer’s tax
status; (3) the customer’s investment
objectives; and (4) such other
information used or considered to be
reasonable by such member or
registered representative in making
recommendations to the customer.
In addition, FINRA has implemented
increased sales practice and customer
margin requirements for FINRA
members applicable to leveraged
exchange-traded funds (‘‘ETFs’’) (which
include the Shares) and options on
leveraged ETFs, as described in FINRA
Regulatory Notices 09–31 (June 2009),
09–53 (August 2009) and 09–65
(November 2009) (‘‘FINRA Regulatory
Notices’’). ETP Holders that carry
customer accounts will be required to
follow the FINRA guidance set forth in
the FINRA Regulatory Notices.
As disclosed in the Registration
Statement, the Funds will seek
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Federal Register / Vol. 77, No. 15 / Tuesday, January 24, 2012 / Notices
srobinson on DSK4SPTVN1PROD with NOTICES
leveraged, inverse, or leveraged inverse
returns on a daily basis, and the Funds
will not seek to achieve their stated
investment objective over a period of
time greater than one day because
compounding prevents the Funds from
perfectly achieving such results.
Accordingly, results over periods of
time greater than one day typically will
not be a leveraged multiple (+300% or
+200%), the inverse (¥100%) or a
leveraged inverse multiple (¥200% or
¥300%) of the period return of the
applicable Benchmark and may differ
significantly from these multiples. The
Exchange’s Information Bulletin
regarding the Funds, described below,
will provide information regarding the
suitability of an investment in the
Shares, as stated in the Registration
Statement.
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 the Shares.
Specifically, the Information Bulletin
will discuss the following: (1) The risks
involved in trading the Shares during
the Opening and Late Trading Sessions
when an updated IOPV will not be
calculated or publicly disseminated; (2)
the procedures for purchases and
redemptions of Shares in Creation Unit
size (and that Shares are not
individually redeemable); (3) 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 Shares; (4) how information
regarding the IOPV is disseminated; (5)
the requirement that ETP Holders
deliver a prospectus to investors
purchasing newly issued Shares prior to
or concurrently with the confirmation of
a transaction; and (6) trading
information.
In addition, the Information Bulletin
will advise ETP Holders, prior to the
commencement of trading, of the
prospectus delivery requirements
applicable to the Funds. The Exchange
notes that investors purchasing Shares
directly from the Funds will receive a
prospectus. ETP Holders purchasing
Shares from the Funds for resale to
investors will deliver a prospectus to
such investors. The Information Bulletin
will reference the FINRA Regulatory
Notices regarding sales practice and
customer margin requirements for
FINRA members applicable to leveraged
ETFs and options on leveraged ETFs.
The Information Bulletin will also
discuss any exemptive, no-action and
interpretive relief granted by the
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17:25 Jan 23, 2012
Jkt 226001
Commission from any rules under the
Act.
In addition, the Information Bulletin
will reference that the Funds are subject
to various fees and expenses described
in the Registration Statement. The
Information Bulletin will also reference
that the Commodity Futures Trading
Commission has regulatory jurisdiction
over the trading of Benchmark Futures
contracts traded on U.S. markets.
The Information Bulletin will also
disclose the trading hours of the Shares
of the Funds. The Bulletin will disclose
that information about the Shares of the
Funds is publicly available on the
Funds’ Web site.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 20 that an
exchange have rules that are designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to remove
impediments to, and perfect the
mechanism of a free and open market
and, in general, to protect investors and
the public interest.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices in that the Shares will
be listed and traded on the Exchange
pursuant to the initial and continued
listing criteria in NYSE Arca Equities
Rule 8.200 and Commentary .02 thereto.
The Exchange has in place surveillance
procedures that are adequate to properly
monitor trading in the Shares in all
trading sessions and to deter and detect
violations of Exchange rules and
applicable federal securities laws. The
Exchange may obtain information via
ISG from other exchanges that are
members of ISG or with which the
Exchange has entered into a
comprehensive surveillance sharing
agreement. The Benchmark Futures
Contracts held by the Funds are traded
on CME and ICE, which are ISG
members. Each Fund will seek to
achieve its investment objective by
investing under normal market
conditions, in Benchmark Futures
Contracts. In the event position
accountability rules or position limits
are reached with respect to a particular
Benchmark Futures Contract, the
Sponsor, may, in its commercially
reasonable judgment, cause the relevant
Fund to obtain exposure through overthe-counter forward contracts
referencing the particular exchange rate,
index or index components, or invest in
other forward contracts not based on the
20 15
PO 00000
U.S.C. 78f(b)(5).
Frm 00106
Fmt 4703
Sfmt 4703
particular exchange rate, if such
instruments tend to exhibit trading
prices or returns that correlate with the
Benchmarks or any Benchmark Futures
Contract and will further the investment
objective of a Fund. The intra-day
futures prices, closing price and
settlement prices of the Benchmark
Futures Contracts held by the Funds are
also available from the CME and ICE, as
applicable, automated quotation
systems, published or other public
sources, or on-line information services.
Quotation and last sale information for
the Shares will be available via CTA.
Each Fund’s total portfolio composition
will be disclosed on the Funds’ Web site
or another relevant Web site.
The proposed rule change is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest in that a large amount of
information will be publicly available
regarding the Funds and the Shares,
thereby promoting market transparency.
Real-time dissemination of spot pricing
for the Australian dollar, Canadian
dollar, Swiss franc, Euro and Japanese
yen and data for the U.S. Dollar Index
is available from various major market
data vendors. The NAV per Share will
be calculated daily and made available
to all market participants at the same
time. One or more major market data
vendors will disseminate for the Funds
on a daily basis information with
respect to the IOPV, recent NAV per
Share and Shares outstanding. The
IOPV will be widely disseminated by
one or more major market data vendors
at least every 15 seconds during the
Core Trading Session. Trading in Shares
of the Funds will be halted if the circuit
breaker parameters in NYSE Arca
Equities Rule 7.12 have been reached or
because of market conditions or for
reasons that, in the view of the
Exchange, make trading in the Shares
inadvisable. The Exchange may halt
trading during the day in which an
interruption to the dissemination of the
IOPV, the Benchmark value or the value
of the underlying Benchmark Futures
Contracts occurs. If the interruption to
the dissemination of the IOPV, the
Benchmark value or the value of the
underlying Benchmark Futures
Contracts 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. In addition, if the
Exchange becomes aware that the NAV
with respect to the Shares is not
disseminated to all market participants
at the same time, it will halt trading in
the Shares until such time as the NAV
is available to all market participants.
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Moreover, 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 Shares. The
Information Bulletin will also reference
the FINRA Regulatory Notices regarding
sales practice and customer margin
requirements for FINRA members
applicable to leveraged ETFs and
options on leveraged ETFs.
The proposed rule change is designed
to perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest in that
it will facilitate the listing and trading
of additional types of exchange-traded
products that will enhance competition
among market participants, to the
benefit of investors and the marketplace.
As noted above, the Exchange has in
place surveillance procedures relating to
trading in the Shares and may obtain
information via ISG from other
exchanges that are members of ISG or
with which the Exchange has entered
into a comprehensive surveillance
sharing agreement. In addition, as noted
above, investors will have ready access
to information regarding the Funds’
holdings, IOPV, and quotation and last
sale information for the Shares.
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.
srobinson on DSK4SPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
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17:25 Jan 23, 2012
Jkt 226001
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2012–04 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2012–04. This
file number should be included on the
subject line if email 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 Web site viewing and
printing in the Commission’s Public
Reference Section, 100 F Street, NE.,
Washington, DC 20549–1090, on official
business days between 10 a.m. and 3
p.m. Copies of the filing will also be
available for inspection and copying at
the NYSE’s principal office and on its
Internet Web site at www.nyse.com. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2012–04 and
should be submitted on or before
February 14, 2012.
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
3539
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.21
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–1290 Filed 1–23–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66178; File No. SR–Phlx–
2011–170]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Order
Approving a Proposed Rule Change
Requesting Permanent Approval of the
Pilot Program Permitting NASDAQ
OMX PSX To Accept Inbound Orders
That Nasdaq Execution Services, LLC
Routes in Its Capacity as a Facility of
the NASDAQ Stock Market LLC
January 18, 2012.
I. Introduction
On December 1, 2011, NASDAQ OMX
PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) 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 requesting permanent approval
of the Exchange’s pilot program to
permit the Exchange’s NASDAQ OMX
PSX system (‘‘PSX’’) to accept certain
inbound orders that Nasdaq Execution
Services, LLC (‘‘NES’’) routes in its
capacity as a facility of the NASDAQ
Stock Market LLC (‘‘Nasdaq’’). The
proposed rule change was published for
comment in the Federal Register on
December 15, 2011.3 The Commission
received no comment letters regarding
the proposed rule change. This order
approves the proposed rule change.
II. Background
Exchange Rule 985(b) prohibits the
Exchange or any entity with which it is
affiliated from, directly or indirectly,
acquiring or maintaining an ownership
interest in, or engaging in a business
venture with, an Exchange member or
an affiliate of an Exchange member in
the absence of an effective filing under
Section 19(b) of the Exchange Act.4 NES
is a broker-dealer that is a member of
the Exchange, and currently provides to
members of Nasdaq optional routing
21 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. 65934
(December 9, 2011), 76 FR 78060 (‘‘Notice’’).
4 15 U.S.C. 78s(b).
1 15
E:\FR\FM\24JAN1.SGM
24JAN1
]]>Agencies
[Federal Register Volume 77, Number 15 (Tuesday, January 24, 2012)]
[Notices]
[Pages 3532-3539]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1290]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66180; File No. SR-NYSEArca-2012-04]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating To Listing and Trading of Shares of
Twenty-Six Series of ProShares Trust II Under NYSE Arca Equities Rule
8.200
January 18, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that, on January 6, 2012, NYSE Arca, Inc. (``Exchange''
or ``NYSE Arca'') 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.
---------------------------------------------------------------------------
\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
The Exchange proposes to list and trade shares of the following
under NYSE Arca Equities Rule 8.200: ProShares UltraPro Australian
Dollar, ProShares UltraPro Canadian Dollar, ProShares UltraPro Swiss
Franc, ProShares UltraPro Euro, ProShares UltraPro U.S. Dollar, and
ProShares UltraPro Yen (collectively, ``UltraPro Funds''); ProShares
UltraPro Short Australian Dollar, ProShares UltraPro Short Canadian
Dollar, ProShares UltraPro Short Swiss Franc, ProShares UltraPro Short
Euro, ProShares UltraPro Short U.S. Dollar, and ProShares UltraPro
Short Yen (collectively, ``UltraPro Short Funds''); ProShares Ultra
Australian Dollar, ProShares Ultra Canadian Dollar, ProShares Ultra
Swiss Franc and ProShares Ultra U.S. Dollar (collectively, ``Ultra
Funds''); ProShares UltraShort Australian Dollar, ProShares UltraShort
Canadian Dollar, ProShares UltraShort Swiss Franc and ProShares
UltraShort U.S. Dollar (collectively, ``UltraShort Funds''); and
ProShares Short Australian Dollar, ProShares Short Canadian Dollar,
ProShares Short Swiss Franc, ProShares Short Euro, ProShares Short U.S.
Dollar, and ProShares Short Yen (collectively, ``Short Funds''). The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and www.nyse.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSE Arca Equities Rule 8.200, Commentary .02 permits the trading
of Trust Issued Receipts (``TIRs'') either by listing or pursuant to
unlisted trading privileges (``UTP'').\3\ The Exchange proposes to list
and trade shares (``Shares'') of the following pursuant to NYSE Arca
Equities Rule 8.200: ProShares UltraPro Australian Dollar, ProShares
UltraPro Canadian Dollar, ProShares UltraPro Swiss Franc, ProShares
UltraPro Euro, ProShares UltraPro U.S. Dollar, ProShares UltraPro Yen,
ProShares UltraPro Short Australian Dollar, ProShares UltraPro Short
Canadian Dollar, ProShares UltraPro Short Swiss Franc, ProShares
UltraPro Short Euro, ProShares UltraPro Short U.S. Dollar, ProShares
UltraPro Short Yen, ProShares Ultra Australian Dollar, ProShares Ultra
Canadian Dollar,
[[Page 3533]]
ProShares Ultra Swiss Franc, ProShares Ultra U.S. Dollar, ProShares
UltraShort Australian Dollar, ProShares UltraShort Canadian Dollar,
ProShares UltraShort Swiss Franc, ProShares UltraShort U.S. Dollar,
ProShares Short Australian Dollar, ProShares Short Canadian Dollar,
ProShares Short Swiss Franc, ProShares Short Euro, ProShares Short U.S.
Dollar, and ProShares Short Yen (each a ``Fund'' and, collectively,
``Funds'').\4\ Each of the Funds is a series of the ProShares Trust II
(``Trust''), a Delaware statutory trust. ProShare Capital Management
LLC (``Sponsor'') is the Trust's sponsor and Wilmington Trust Company
is the Trust's trustee. Brown Brothers Harriman & Co.
(``Administrator'') serves as the administrator, custodian and transfer
agent of the Funds. SEI Investments Distribution Co. (``Distributor'')
serves as distributor of the Shares.
---------------------------------------------------------------------------
\3\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to
TIRs that invest in ``Financial Instruments.'' The term ``Financial
Instruments,'' as defined in Commentary .02(b)(4) to NYSE Arca
Equities Rule 8.200, means any combination of investments, including
cash; securities; options on securities and indices; futures
contracts; options on futures contracts; forward contracts; equity
caps, collars and floors; and swap agreements.
\4\ See registration statement on Form S-1, dated December 22,
2011 (File No. 333-178707) (``Registration Statement''). The
description of the Funds and the Shares contained herein is based,
in part, on the Registration Statement.
---------------------------------------------------------------------------
The Exchange notes that the Commission has previously approved the
listing and trading of other series of the Commodities and Currency
Trust (now known as ProShares Trust II) on the American Stock Exchange
LLC,\5\ trading on NYSE Arca pursuant to UTP \6\ and listing and
trading on NYSE Arca.\7\ The Exchange further notes that the shares of
other ProShares Ultra Funds, UltraShort Funds and Short Funds based on
various securities indexes have previously been approved by the
Commission.\8\
---------------------------------------------------------------------------
\5\ See, e.g., Securities Exchange Act Release No. 58161 (July
15, 2008), 73 FR 42380 (July 21, 2008) (SR-Amex-2008-39).
\6\ See, e.g., Securities Exchange Act Release No. 58162 (July
15, 2008), 73 FR 42391 (July 21, 2008) (SR-NYSEArca-2008-73).
\7\ See, e.g., Securities Exchange Act Release No. 58457
(September 3, 2008), 73 FR 52711 (September 10, 2008) (SR-NYSEArca-
2008-91) (approving listing of certain leveraged ProShares Funds on
the Exchange).
\8\ See, e.g., Securities Exchange Act Release Nos. 52553
(October 3, 2005), 70 FR 59100 (October 11, 2005) (SR-Amex-2004-62)
(approving the listing and trading of shares of the xtraShares
Trust); 54040 (June 23, 2006), 71 FR 37629 (June 30, 2006) (SR-Amex-
2006-41) (approving the listing and trading of shares of the
ProShares Trust); 55117 (January 17, 2007), 72 FR 3442 (January 25,
2007) (SR-Amex 2006-101) (approving the listing and trading of
shares of the ProShares Trust); 56592 (October 1, 2007), 72 FR 57364
(October 9, 2007) (SR-Amex-2007-60) (approving the listing and
trading of 6 issues of shares of the ProShares Trust based on
international equity indexes); and 56998 (December 19, 2007), 72 FR
73404 (December 27, 2007) (SR-Amex-2007-104) (approving the listing
and trading of shares of the ProShares Trust).
---------------------------------------------------------------------------
According to the Registration Statement, the UltraPro Funds seek
daily investment results (before fees and expenses) that correspond to
three times (+300%) the daily performance, whether positive or
negative, of their corresponding benchmark and the UltraPro Short Funds
seek daily investment results (before fees and expenses) that
correspond to three times the inverse (-300%) of the daily performance,
whether positive or negative, of their corresponding benchmark. The
Ultra Funds seek daily investment results (before fees and expenses)
that correspond to twice (+200%) the daily performance, whether
positive or negative, of their corresponding benchmarks and the
UltraShort Funds seek daily investment results (before fees and
expenses) that correspond to twice the inverse (-200%) of the daily
performance, whether positive or negative, of their corresponding
benchmarks. The Short Funds seek daily investment results (before fees
and expenses) that correspond to the inverse (-100%) of the daily
performance, whether positive or negative, of their corresponding
benchmarks. Each reference to a corresponding benchmark is a
``Benchmark'' and together, ``Benchmarks,'' as described below.
Each of the Funds will hold futures contracts on the applicable
Benchmark and, in the case of a Benchmark index, futures on such
Benchmark index or the Benchmark index components, traded on a United
States exchange (``Benchmark Futures Contracts'') and, to a limited
extent, forward contracts, as described below, to produce the
economically ``inverse,'' ``leveraged,'' and ``inverse leveraged''
investment results, as set forth by each Fund's investment
objective.\9\
---------------------------------------------------------------------------
\9\ Terms relating to the Funds, the Shares and the Benchmarks
referred to, but not defined, herein are defined in the Registration
Statement.
---------------------------------------------------------------------------
According to the Registration Statement, each Fund seeks to achieve
its investment objective by investing under normal market
conditions,\10\ in Benchmark Futures Contracts. In the event position
accountability rules or position limits are reached with respect to a
particular Benchmark Futures Contract, the Sponsor may, in its
commercially reasonable judgment, cause the relevant Fund to obtain
exposure through over-the-counter forward contracts referencing the
particular exchange rate, index or index components, or invest in other
forward contracts not based on the particular exchange rate, if such
instruments tend to exhibit trading prices or returns that correlate
with the Benchmarks or any Benchmark Futures Contract and will further
the investment objective of a Fund.\11\ A Fund may also invest in
forward contracts if the market for a specific Benchmark Futures
Contract experiences emergencies (e.g., natural disaster, terrorist
attack or an act of God) or disruptions (e.g., a trading halt or a
flash crash) to prevent a Fund from obtaining the appropriate amount of
investment exposure to the affected Benchmark Futures Contracts
directly.\12\
---------------------------------------------------------------------------
\10\ The term ``under normal conditions'' [sic] includes, but is
not limited to, the absence of extreme volatility or trading halts
in the futures markets or the financial markets generally;
operational issues causing dissemination of inaccurate market
information; or force majeure type events such as systems failure,
natural or man-made disaster, act of God, armed conflict, act of
terrorism, riot or labor disruption or any similar intervening
circumstance.
\11\ To the extent practicable, the Funds will invest in forward
contracts cleared through the facilities of a centralized clearing
house.
\12\ According to the Registration Statement, the Sponsor will
also attempt to mitigate the Funds' credit risk by transacting only
with large, well-capitalized institutions using measures designed to
determine the creditworthiness of a counterparty. The Sponsor will
take various steps to limit counterparty credit risk, as described
in the Registration Statement.
---------------------------------------------------------------------------
Each Fund will also invest in cash equivalents (such as shares of
money market funds, bank deposits, bank money market accounts, certain
variable rate-demand notes and repurchase agreements collateralized by
government securities, whether denominated in U.S. dollars or the
applicable foreign currency) that serve or will serve as collateral for
the investments in futures and forward contracts. The Funds do not
currently intend to invest directly in any currency but may invest
directly in U.S. Treasury securities.
The Funds' investment in Benchmark Futures Contracts and forward
contracts may involve a small investment relative to the amount of
investment exposure assumed and may result in losses exceeding the
amounts invested. Such instruments, particularly when used to create
leverage, may expose the Funds to potentially dramatic changes (losses
or gains) in the value of the instruments and imperfect correlation
between the value of the instruments and the applicable Benchmark.
The Funds will not seek to achieve their stated investment
objective over a period of time greater than one day because
mathematical compounding prevents the Funds from perfectly achieving
such results. Accordingly, results over periods of time greater than
one day typically will not be a simple multiple (e.g., 2x, 3x, or -1x,
-2x, -3x) of the period return of the corresponding Benchmark and may
differ significantly.
If an UltraPro Fund (or UltraPro Short Fund) is successful in
meeting its
[[Page 3534]]
objective, its value on a given day (before fees and expenses) should
gain (or lose) approximately three times as much on a percentage basis
as its corresponding Benchmark when the Benchmark rises on a given day.
Conversely, its value on a given day (before fees and expenses) should
lose (or gain) approximately three times as much on a percentage basis
as the corresponding Benchmark when the Benchmark declines on a given
day.
If an Ultra Fund (or UltraShort Fund) is successful in meeting its
objective, its value on a given day (before fees and expenses) should
gain (or lose) approximately twice as much on a percentage basis as its
corresponding Benchmark when the Benchmark rises on a given day.
Conversely, its value on a given day (before fees and expenses) should
lose (or gain) approximately twice as much on a percentage basis as the
corresponding Benchmark when the Benchmark declines on a given day.
If a Short Fund is successful in meeting its objective, its value
on a given day (before fees and expenses) should gain approximately as
much on a percentage basis as the corresponding Benchmark when the
Benchmark declines on a given day. Conversely, its value on a given day
(before fees and expenses) should lose approximately as much on a
percentage basis as the corresponding Benchmark when the Benchmark
rises on a given day.
In seeking to achieve each Fund's daily investment objective, the
Sponsor will use a mathematical approach to investing. Using this
approach, the Sponsor will determine the type, quantity and mix of
investment positions that the Sponsor believes in combination should
produce daily returns consistent with a Fund's objective. The Sponsor
will rely upon a pre-determined model to generate orders that result in
repositioning each Fund's investments in accordance with its daily
investment objectives.
According to the Registration Statement, a number of factors may
affect a Fund's ability to achieve a high degree of correlation with
its Benchmark, and there can be no guarantee that a Fund will achieve a
high degree of correlation. While the Funds do not expect that their
daily returns will deviate adversely from their respective daily
investment objectives, several factors may affect their ability to
achieve this correlation. Among these factors are a Fund's expenses,
including fees, transaction costs and the cost of the investment
techniques employed by that Fund, bid-ask spreads, a Fund's Share
prices being rounded to the nearest cent, changes to a Benchmark that
are not disseminated in advance and the need to conform a Fund's
portfolio holdings to comply with investment restrictions or policies
or regulatory or tax law requirements.
ProShares UltraPro Australian Dollar, ProShares UltraPro Short
Australian Dollar, ProShares Ultra Australian Dollar, ProShares
UltraShort Australian Dollar, and ProShares Short Australian Dollar
These Funds will be designed to track a multiple, the inverse or an
inverse multiple of the daily performance of the Australian dollar spot
price versus the U.S. dollar (``AUD/USD''). The Benchmark for each of
these Funds will be the U.S. dollar price of the Australian dollar.
These Funds will use the 4 p.m. Eastern Time (``E.T.'') Australian
Dollar exchange rate as provided by Bloomberg, expressed in terms of
U.S. dollars per unit of foreign currency, as the basis for the
underlying Benchmark. The Australian dollar is the national currency of
Australia and the currency of the accounts of the Reserve Bank of
Australia, the Australian central bank. The official currency code for
the Australian dollar is ``AUD.'' The Australian dollar is referred to
in Australia as ``dollar.'' As with U.S. currency, 100 Australian cents
are equal to one Australian dollar. In Australia, unlike most other
countries, cash transactions are rounded to the nearest five cents. The
most commonly used symbol used to represent the Australian dollar is
``A$.''
As of December 30, 2011, open interest in AUD/USD futures contracts
traded on the Chicago Mercantile Exchange (``CME'') was $11.56 billion.
AUD/USD futures contracts had an average daily trading volume in 2011
of 123,006 contracts.
ProShares UltraPro Canadian Dollar, ProShares UltraPro Short Canadian
Dollar, ProShares Ultra Canadian Dollar, ProShares UltraShort Canadian
Dollar, and ProShares Short Canadian Dollar
These Funds will be designed to track a multiple, the inverse or an
inverse multiple of the daily performance of the Canadian dollar spot
price versus the U.S. dollar (CAD/USD). The Benchmark for each of these
Funds will be the U.S. dollar price of the Canadian dollar. These Funds
will use the 4 p.m. E.T. Canadian dollar exchange rate as provided by
Bloomberg, expressed in terms of U.S. dollars per unit of foreign
currency, as the basis for the underlying Benchmark. The Canadian
Dollar is the national currency of Canada and the currency of the
accounts of the Bank of Canada, the Canadian central bank. The official
currency code for the Canadian dollar is ``CAD.'' As with U.S.
currency, 100 Canadian cents are equal to one Canadian dollar.
As of December 30, 2011, open interest in CAD/USD futures contracts
traded on CME was $11.66 billion. CAD/USD futures contracts had an
average daily trading volume in 2011 of 89,667 contracts.
ProShares UltraPro Swiss Franc, ProShares UltraPro Short Swiss Franc,
ProShares Ultra Swiss Franc, ProShares UltraShort Swiss Franc, and
ProShares Short Swiss Franc
These Funds will be designed to track a multiple, the inverse or an
inverse multiple of the daily performance of the Swiss franc spot price
versus the U.S. dollar (``CHF/USD''). The Benchmark for each of these
Funds will be the U.S. dollar price of the Swiss Franc. These Funds
will use the 4 p.m. E.T. Swiss franc exchange rate as provided by
Bloomberg, expressed in terms of U.S. dollars per unit of foreign
currency, as the basis for the underlying Benchmark. The Swiss franc is
the national currency of Switzerland and Liechtenstein and the currency
of the accounts of the Swiss National Bank, the central bank of
Switzerland. The official currency code for the Swiss franc is ``CHF.''
Each Swiss franc is equal to 100 Swiss centimes.
As of December 30, 2011, open interest in CHF/USD futures contracts
traded on CME was $4.99 billion. CHF/USD futures contracts had an
average daily trading volume in 2011 of 40,955 contracts.
ProShares UltraPro Euro, ProShares UltraPro Short Euro, and ProShares
Short Euro
These Funds will be designed to track a multiple, the inverse, or
an inverse multiple of the daily change in the spot price of the euro
versus the U.S. dollar (``EUR/USD''). The Benchmark for each of these
Funds will be the U.S. dollar price of the Euro. These Funds will use
the 4 p.m. E.T. Euro exchange rate as provided by Bloomberg, expressed
in terms of U.S. dollars per unit of foreign currency, as the basis for
the underlying Benchmark. The Euro is the official currency of the
Eurozone, which consists of 17 European states including: Austria,
Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia,
Slovenia, and Spain. The Euro is managed and administered by the
European Central Bank and the European System of Central Banks. As of
December 30, 2011, open interest in
[[Page 3535]]
EUR\USD futures contracts traded on CME was $46.12 billion. EUR\USD
futures contracts had an average daily trading volume in 2011 of
336,947 contracts.
ProShares UltraPro U.S. Dollar, ProShares UltraPro Short U.S. Dollar,
ProShares Ultra U.S. Dollar, ProShares UltraShort U.S. Dollar, and
ProShares Short U.S. Dollar
These Funds will be designed to track a multiple, the inverse or an
inverse multiple of the daily performance of their Benchmark, the U.S.
Dollar Index (``U.S. Dollar Index'' or ``Index'').\13\ The U.S. Dollar
Index is a geometrically-averaged calculation of six currencies
weighted against the U.S. dollar. The six component currencies are the
Euro, Japanese yen, British pound, Canadian dollar, Swedish krona and
Swiss franc. The component currencies do not have the same weight. The
Euro has a weighting of 57.6%, the Japanese yen a weighting of 13.6%,
the British pound a weighting of 11.9%, the Canadian dollar a weighting
of 9.1%, the Swedish krona a weighting of 4.2% and the Swiss franc a
weighting of 3.6%. The U.S. Dollar Index is calculated by Bloomberg in
real time approximately every 15 seconds using the spot prices of the
Index's component currencies. The price used for the calculation of the
Index is the mid-point between the Bloomberg top of the book bid/offer
in the component currencies.
---------------------------------------------------------------------------
\13\ The U.S. Dollar Index was created by the U.S. Federal
Reserve in 1973. Following the ending of the 1944 Bretton Woods
Agreement, which had established a system of fixed exchange rates,
the U.S. Federal Reserve Bank began the calculation of the U.S.
Dollar Index to provide an external bilateral trade-weighted average
of the U.S. dollar as it freely floated against global currencies.
Futures contracts based on the U.S. Dollar Index (``USDX'' or ``U.S.
Dollar Index futures contracts'') were listed on November 20, 1985,
and are now available only on the IntercontinentalExchange (``ICE'')
electronic trading platform. Options on the futures contracts began
trading on September 3, 1986, and are available both on the ICE
electronic trading platform and on the ICE options trading floor.
---------------------------------------------------------------------------
In addition to the data on EUR/USD, CAD/USD, CHF/USD and JPY/USD
futures contracts stated herein, as of December 30, 2011, open interest
in U.S. Dollar Index futures contracts traded on ICE was $5.44 billion.
U.S. Dollar Index futures contracts had an average daily trading volume
in 2011 of 30,341 contracts. Open interest in British pound (``GBP/
USD'') futures contracts traded on the CME was $19.59 billion, and GBP/
USD futures contracts had an average daily trading volume in 2011 of
116,115 contracts. Open interest in Swedish krona (``SEK/USD'') futures
contracts traded on the CME was $16.79 million, and SEK/USD futures
contracts had an average daily trading volume of 8 contracts.
ProShares UltraPro Yen, ProShares UltraPro Short Yen, and ProShares
Short Yen
These Funds will be designed to track a multiple, the inverse or an
inverse multiple of the daily performance of the Japanese yen spot
price versus the U.S. dollar (``JPY/USD''). The Benchmark for each of
these Funds will be the U.S. dollar price of the Japanese yen. These
Funds will use the 4 p.m. E.T. Japanese yen exchange rate as provided
by Bloomberg, expressed in terms of U.S. dollars per unit of foreign
currency, as the basis for the underlying Benchmark. The Japanese yen
has been the official currency of Japan since 1871. The Bank of Japan
has been operating as the central bank of Japan since 1882. The
official currency code for the Japanese yen is ``YEN.''
As of December 30, 2011, open interest in JPY/USD futures contracts
traded on the CME was $25.75 billion. JPY/USD futures contracts had an
average daily trading volume in 2011 of 113,476 contracts.
Benchmark Futures Contracts Held by the Funds
All open Benchmark Futures Contracts held by the Funds will be
traded on a United States exchange and will be calculated at their then
current market value, based upon the last traded price before the net
asset value (``NAV'') calculation time, for that particular futures
contract traded on the applicable United States exchange on the date
with respect to which NAV is being determined; provided, that if a
futures contract traded on a United States exchange could not be
liquidated on such day, due to the operation of daily limits or other
rules of the exchange upon which that position is traded or otherwise,
the Sponsor may in its sole discretion choose to determine a fair value
price as the basis for determining the market value of such position
for such day.
The Benchmark Futures Contracts trade on the follow exchanges:
------------------------------------------------------------------------
Benchmark futures
Fund benchmarks contracts Exchange \14\
------------------------------------------------------------------------
Australian dollar/US dollar AUD/USD........... CME
exchange rate.
Canadian dollar/US dollar CAD/USD........... CME
exchange rate.
European euro/US dollar EUR/USD........... CME
exchange rate.
Japanese yen/US dollar exchange JPY/USD........... CME
rate.
Swiss franc/US dollar exchange CHF/USD........... CME
rate.
US Dollar Index................ USDX.............. ICE
CAD/USD........... CME
CHF/USD........... CME
EUR/USD........... CME
GBP/USD........... CME
JPY/USD........... CME
SEK/USD........... CME
------------------------------------------------------------------------
The daily 4 p.m. E.T. closing value for each Benchmark is published
daily on www.wsj.com. The value of the Benchmarks will be disseminated
by one or more major market data vendors and will be updated at least
every 15 seconds during the Exchange's Core Trading Session. Data
regarding the Benchmarks is also available from the respective
Benchmark provider to subscribers.\15\
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\14\ Each Benchmark Futures Contract trades electronically for
21 or more hours each trading session, beginning every Sunday
evening and closing for the week on the following Friday evening.
\15\ ICE Futures U.S., Inc. compiles, maintains, determines and
weights the components of the U.S. Dollar Index. The U.S. Dollar
Index and USDX are trademarks and service marks of ICE Futures U.S.,
Inc. registered in the United States, Great Britain, the European
Union and Japan and used under license. ICE Futures U.S., Inc. is
not engaged in the business of trading in commodities or securities
but operates a derivatives exchange. ICE Futures U.S., Inc.
maintains a Code of Conduct applicable to all personnel that
prohibits disclosure of any confidential information obtained during
the course of one's employment and the use or disclosure of any
material non-public information relating to changes to the
composition of the U.S. Dollar Index or changes to the U.S. Dollar
Index methodology in violation of applicable laws, rules or
regulations.
---------------------------------------------------------------------------
[[Page 3536]]
Net Asset Value
According to the Registration Statement, the NAV of each Fund will
be total assets including, but not limited to, all cash and cash
equivalents or other debt securities, less total liabilities, each
determined on the basis of generally accepted accounting principles. In
particular, the NAV will include any unrealized profit or loss on
Benchmark Futures Contracts and other Fund holdings, and any other
credit or debit accruing to a Fund but unpaid or not received by a
Fund.
The NAV per Share of each Fund will be computed by dividing the
value of the net assets of such Fund (i.e., the value of its total
assets, less total liabilities) by its total number of Shares
outstanding. Expenses and fees will be accrued daily and taken into
account for purposes of determining NAV. The NAV of each Fund will be
calculated by the Administrator and will be determined each business
day as described in the Registration Statement.
Creation and Redemption of Shares
According to the Registration Statement, the Funds will create and
redeem Shares from time to time, but only in one or more ``Creation
Units.'' A Creation Unit is a block of 50,000 Shares of a Fund.
Creation Units may be created or redeemed only by authorized
participants, as described in the Registration Statement. Except when
aggregated in Creation Units, the Shares will not be redeemable
securities. Authorized participants may pay a fixed and variable
transaction fee in connection with each order to create or redeem a
Creation Unit. Authorized participants may sell the Shares included in
the Creation Units they purchase from the Funds to other investors. On
any business day, an authorized participant may place an order with the
Distributor to create one or more Creation Units. An order to create or
redeem Shares must be placed by 3 p.m. E.T. The total cash payment
required to create each Creation Unit will be the NAV of 50,000 Shares
of the applicable Fund on the purchase order date plus the applicable
transaction fee.
According to the Registration Statement, the procedures by which an
authorized participant can redeem one or more Creation Units will
mirror the procedures for the purchase of Creation Units. On any
business day, an authorized participant may place an order with the
Distributor to redeem one or more Creation Units. Individual
shareholders may not redeem directly from a Fund.
By placing a redemption order, an authorized participant agrees to
deliver the Creation Units to be redeemed through DTC's book-entry
system to the applicable Fund not later than noon E.T., on the third
business day immediately following the redemption order date (T+3). The
redemption proceeds from a Fund will consist of the cash redemption
amount. The cash redemption amount will be equal to the NAV of the
number of Creation Unit(s) of such Fund requested in the authorized
participant's redemption order as of the time of the calculation of
such Fund's NAV on the redemption order date, less transaction fees, as
described in the Registration Statement.
Availability of Information Regarding the Shares
The Web site for the Funds (www.proshares.com) and/or the Exchange,
which are publicly accessible at no charge, will contain the following
information: (a) The current NAV per Share daily and the prior business
day's NAV per Share; (b) calculation of the premium or discount of the
closing market price against the NAV per Share; (c) the prospectus; and
(d) other applicable quantitative information.
The NAV per Share will be calculated and disseminated daily. One or
more major market data vendors will disseminate for the Funds on a
daily basis information with respect to the corresponding Indicative
Optimized Portfolio Value (``IOPV'') (as discussed below), recent NAV
per Share and Shares outstanding. The Exchange will also make available
on its Web site (www.nyse.com) daily trading volume of the Shares,
closing prices of the Shares, and the NAV per Share. The intraday
pricing and settlement values of the Benchmark Futures Contracts held
by the Funds are also available from the CME, the ICE, and other public
sources or on-line information services such as www.ino.com. Real-time
dissemination of spot pricing for the Australian dollar, Canadian
dollar, Swiss franc, Euro and Japanese yen and data for the U.S. Dollar
Index are available from various major market data vendors. Quotation
and last sale information for the Shares will be available via the
Consolidated Tape Association (``CTA'') high-speed line.
Portfolio Disclosure
Each Fund's total portfolio composition will be disclosed on the
Funds' Web site or another relevant Web site as determined by the Trust
and/or the Exchange. The Trust will provide Web site disclosure of
portfolio holdings daily and will include, as applicable, the
description and notional value (in U.S. dollars) of the Funds'
investments in Benchmark Futures Contracts and forward contracts, if
any, cash equivalents and amount of cash held in the portfolio of each
Fund. This public Web site disclosure of the portfolio composition of
each Fund will occur at the same time as the disclosure by the Sponsor
of the portfolio composition to authorized participants, so that all
market participants are provided portfolio composition information at
the same time. Therefore, the same portfolio information will be
provided on the public Web site as well as in electronic files provided
to authorized participants. Accordingly, each investor will have access
to the current portfolio composition of each Fund through the Funds'
Web site.
Dissemination of Net Asset Value and Indicative Optimized Portfolio
Value
The Administrator will calculate and disseminate, once each trading
day, the NAV per Share to market participants. The NAV calculation time
for each Fund will be 4 p.m. E.T. The Exchange will obtain a
representation (prior to listing of the Funds) from the Trust that the
NAV per Share will be calculated daily and made available to all market
participants at the same time. In addition, the Sponsor will cause to
be made available on a daily basis the total payment required to create
each Creation Unit of the applicable Fund on the purchase order date in
connection with the issuance of the respective Shares.
The IOPV relating to Shares of each Fund will be widely
disseminated by one or more major market data vendors at least every 15
seconds during the Core Trading Session.\16\ The IOPV will be an
indicator of the value of the investments and cash and receivables less
liabilities of a Fund at the time the IOPV is disseminated. The IOPV
will be calculated by NYSE Arca using the prior day's closing net
assets of each Fund as a base and updating throughout the Core Trading
Session changes in the value of Benchmark Futures Contracts and forward
contracts, if any, held by the Fund. The IOPV should not be viewed as
an actual real time update of the NAV because NAV is calculated only
once at the end of each trading day. The IOPV also should not be viewed
as a precise value of the Shares.
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\16\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available IOPV
published on CTA or other data feeds.
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[[Page 3537]]
Criteria for Initial and Continued Listing
The Funds will be subject to the criteria in NYSE Arca Equities
Rule 8.200 and Commentary .02 thereto for initial and continued listing
of the Shares.
The minimum number of Shares for each Fund to be outstanding at the
start of trading will be 100,000 Shares. The Exchange believes that
this minimum number of Shares for each Fund to be outstanding at the
start of trading is sufficient to provide adequate market liquidity and
to further the objectives of the Funds. The Exchange represents that,
for the initial and continued listing of the Shares, the Funds must be
in compliance with NYSE Arca Equities Rule 5.3 and Rule 10A-3 under the
Act.
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T.\17\ The Exchange
has appropriate rules to facilitate transactions in the Shares during
all trading sessions. As provided in NYSE Arca Equities Rule 7.6,
Commentary .03, the minimum price variation (``MPV'') for quoting and
entry of orders in equity securities traded on the NYSE Arca
Marketplace is $0.01, with the exception of securities that are priced
less than $1.00 for which the MPV for order entry is $0.0001.
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\17\ See NYSE Arca Equities Rule 7.34 regarding hours for the
NYSE Arca Opening, Core and Late Trading Sessions.
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The trading of the Shares will be subject to NYSE Arca Equities
Rule 8.200, Commentary .02(e), which sets forth certain restrictions on
Equity Trading Permit (``ETP'') Holders acting as registered Market
Makers in TIRs to facilitate surveillance. See ``Surveillance'' below
for more information.
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares. Trading may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. These may include: (1) The extent to
which trading is not occurring in the underlying Benchmark Futures
Contracts, or (2) whether other unusual conditions or circumstances
detrimental to the maintenance of a fair and orderly market are
present. In addition, trading in Shares will be subject to trading
halts caused by extraordinary market volatility pursuant to the
Exchange's ``circuit breaker'' rule \18\ or by the halt or suspension
of trading of the underlying Benchmark Futures Contracts.
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\18\ See NYSE Arca Equities Rule 7.12.
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The Exchange represents that the Exchange may halt trading during
the day in which an interruption to the dissemination of the IOPV, the
Benchmark value, or the value of the underlying Benchmark Futures
Contracts occurs. If the interruption to the dissemination of the IOPV,
the Benchmark value, or the value of the underlying Benchmark Futures
Contracts 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. In addition, if the Exchange becomes
aware that the NAV with respect to the Shares is not disseminated to
all market participants at the same time, it will halt trading in the
Shares until such time as the NAV is available to all market
participants.
Surveillance
The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products, including TIRs, to
monitor trading in the Shares. The Exchange represents that these
procedures are adequate to properly monitor Exchange trading of the
Shares 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
securities trading 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 can obtain market surveillance information, including
customer identity information, with respect to transactions occurring
on the ICE and the CME in that these markets are members of the
Intermarket Surveillance Group (``ISG''). A list of ISG members is
available at www.isgportal.org.\19\
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\19\ The Exchange may obtain information regarding Benchmark
Futures Contracts from exchanges with which the Exchange has entered
into a surveillance sharing agreement or that are ISG members. The
Exchange notes that not all components of the portfolio for the
Funds may trade on markets that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.
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The Exchange also has a general policy prohibiting the distribution
of material, non-public information by its employees.
Suitability
Currently, NYSE Arca Equities Rule 9.2(a) (Diligence as to
Accounts) provides that an ETP Holder, before recommending a
transaction in any security, must have reasonable grounds to believe
that the recommendation is suitable for the customer based on any facts
disclosed by the customer as to its other security holdings and as to
its financial situation and needs. Further, the rule provides, with a
limited exception, that prior to the execution of a transaction
recommended to a non-institutional customer, the ETP Holder must make
reasonable efforts to obtain information concerning the customer's
financial status, tax status, investment objectives, and any other
information that such ETP Holder believes would be useful to make a
recommendation.
Prior to the commencement of trading, the Exchange will inform its
ETP Holders of the suitability requirements of NYSE Arca Equities Rule
9.2(a) in an Information Bulletin. Specifically, ETP Holders will be
reminded in the Information Bulletin that, in recommending transactions
in these securities, they must have a reasonable basis to believe that
(1) the recommendation is suitable for a customer given reasonable
inquiry concerning the customer's investment objectives, financial
situation, needs, and any other information known by such member, and
(2) the customer can evaluate the special characteristics, and is able
to bear the financial risks, of an investment in the Shares. In
connection with the suitability obligation, the Information Bulletin
will also provide that members must make reasonable efforts to obtain
the following information: (1) The customer's financial status; (2) the
customer's tax status; (3) the customer's investment objectives; and
(4) such other information used or considered to be reasonable by such
member or registered representative in making recommendations to the
customer.
In addition, FINRA has implemented increased sales practice and
customer margin requirements for FINRA members applicable to leveraged
exchange-traded funds (``ETFs'') (which include the Shares) and options
on leveraged ETFs, as described in FINRA Regulatory Notices 09-31 (June
2009), 09-53 (August 2009) and 09-65 (November 2009) (``FINRA
Regulatory Notices''). ETP Holders that carry customer accounts will be
required to follow the FINRA guidance set forth in the FINRA Regulatory
Notices.
As disclosed in the Registration Statement, the Funds will seek
[[Page 3538]]
leveraged, inverse, or leveraged inverse returns on a daily basis, and
the Funds will not seek to achieve their stated investment objective
over a period of time greater than one day because compounding prevents
the Funds from perfectly achieving such results. Accordingly, results
over periods of time greater than one day typically will not be a
leveraged multiple (+300% or +200%), the inverse (-100%) or a leveraged
inverse multiple (-200% or -300%) of the period return of the
applicable Benchmark and may differ significantly from these multiples.
The Exchange's Information Bulletin regarding the Funds, described
below, will provide information regarding the suitability of an
investment in the Shares, as stated in the Registration Statement.
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 the Shares. Specifically, the
Information Bulletin will discuss the following: (1) The risks involved
in trading the Shares during the Opening and Late Trading Sessions when
an updated IOPV will not be calculated or publicly disseminated; (2)
the procedures for purchases and redemptions of Shares in Creation Unit
size (and that Shares are not individually redeemable); (3) 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 Shares; (4) how information regarding the IOPV is
disseminated; (5) the requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior to or concurrently
with the confirmation of a transaction; and (6) trading information.
In addition, the Information Bulletin will advise ETP Holders,
prior to the commencement of trading, of the prospectus delivery
requirements applicable to the Funds. The Exchange notes that investors
purchasing Shares directly from the Funds will receive a prospectus.
ETP Holders purchasing Shares from the Funds for resale to investors
will deliver a prospectus to such investors. The Information Bulletin
will reference the FINRA Regulatory Notices regarding sales practice
and customer margin requirements for FINRA members applicable to
leveraged ETFs and options on leveraged ETFs. The Information Bulletin
will also discuss any exemptive, no-action and interpretive relief
granted by the Commission from any rules under the Act.
In addition, the Information Bulletin will reference that the Funds
are subject to various fees and expenses described in the Registration
Statement. The Information Bulletin will also reference that the
Commodity Futures Trading Commission has regulatory jurisdiction over
the trading of Benchmark Futures contracts traded on U.S. markets.
The Information Bulletin will also disclose the trading hours of
the Shares of the Funds. The Bulletin will disclose that information
about the Shares of the Funds is publicly available on the Funds' Web
site.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \20\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
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\20\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule 8.200
and Commentary .02 thereto. The Exchange has in place surveillance
procedures that are adequate to properly monitor trading in the Shares
in all trading sessions and to deter and detect violations of Exchange
rules and applicable federal securities laws. The Exchange may obtain
information via ISG from other exchanges that are members of ISG or
with which the Exchange has entered into a comprehensive surveillance
sharing agreement. The Benchmark Futures Contracts held by the Funds
are traded on CME and ICE, which are ISG members. Each Fund will seek
to achieve its investment objective by investing under normal market
conditions, in Benchmark Futures Contracts. In the event position
accountability rules or position limits are reached with respect to a
particular Benchmark Futures Contract, the Sponsor, may, in its
commercially reasonable judgment, cause the relevant Fund to obtain
exposure through over-the-counter forward contracts referencing the
particular exchange rate, index or index components, or invest in other
forward contracts not based on the particular exchange rate, if such
instruments tend to exhibit trading prices or returns that correlate
with the Benchmarks or any Benchmark Futures Contract and will further
the investment objective of a Fund. The intra-day futures prices,
closing price and settlement prices of the Benchmark Futures Contracts
held by the Funds are also available from the CME and ICE, as
applicable, automated quotation systems, published or other public
sources, or on-line information services. Quotation and last sale
information for the Shares will be available via CTA. Each Fund's total
portfolio composition will be disclosed on the Funds' Web site or
another relevant Web site.
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that a large amount of information will be publicly available regarding
the Funds and the Shares, thereby promoting market transparency. Real-
time dissemination of spot pricing for the Australian dollar, Canadian
dollar, Swiss franc, Euro and Japanese yen and data for the U.S. Dollar
Index is available from various major market data vendors. The NAV per
Share will be calculated daily and made available to all market
participants at the same time. One or more major market data vendors
will disseminate for the Funds on a daily basis information with
respect to the IOPV, recent NAV per Share and Shares outstanding. The
IOPV will be widely disseminated by one or more major market data
vendors at least every 15 seconds during the Core Trading Session.
Trading in Shares of the Funds will be halted if the circuit breaker
parameters in NYSE Arca Equities Rule 7.12 have been reached or because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable. The Exchange may halt trading
during the day in which an interruption to the dissemination of the
IOPV, the Benchmark value or the value of the underlying Benchmark
Futures Contracts occurs. If the interruption to the dissemination of
the IOPV, the Benchmark value or the value of the underlying Benchmark
Futures Contracts 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. In addition, if the Exchange
becomes aware that the NAV with respect to the Shares is not
disseminated to all market participants at the same time, it will halt
trading in the Shares until such time as the NAV is available to all
market participants.
[[Page 3539]]
Moreover, 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 Shares. The
Information Bulletin will also reference the FINRA Regulatory Notices
regarding sales practice and customer margin requirements for FINRA
members applicable to leveraged ETFs and options on leveraged ETFs.
The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
additional types of exchange-traded products that will enhance
competition among market participants, to the benefit of investors and
the marketplace. As noted above, the Exchange has in place surveillance
procedures relating to trading in the Shares and may obtain information
via ISG from other exchanges that are members of ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement. In addition, as noted above, investors will have ready
access to information regarding the Funds' holdings, IOPV, and
quotation and last sale information for the Shares.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2012-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2012-04. This
file number should be included on the subject line if email 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 Web site viewing and
printing in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549-1090, on official business days between 10
a.m. and 3 p.m. Copies of the filing will also be available for
inspection and copying at the NYSE's principal office and on its
Internet Web site at www.nyse.com. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEArca-2012-04 and should be submitted on or before
February 14, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1290 Filed 1-23-12; 8:45 am]
BILLING CODE 8011-01-P
