6778 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Each unit represents an equal, fractional, 

undivided ownership interest in the net assets of 

the Trust attributable to the particular class of units. 

4See Securities Exchange Act Release No. 61236 

(December 23, 2009), 75 FR 170 (‘‘Notice’’). 

5The Manager is a limited partnership existing 

under the laws of Ontario, Canada, and acts as 

manager of the Trust pursuant to the Trust’s trust 

agreement and the management agreement. The 

Manager provides management and advisory 

services to the Trust. Additional details regarding 

the Trust are set forth in the Registration Statement 

on Form F–1 for the Sprott Physical Gold Trust, 

filed with the Commission on December 9, 2009 

(No. 333–163601) (‘‘Registration Statement’’). 

6With respect to application of Rule 10A–3 under 

the Act, the Trust relies on the exemption contained 

in Rule 10A–3(c)(7). 

7See Notice and the Registration Statement, 

supra notes 4 and 5, respectively, for additional 

information. 

8 Id. 

9 15 U.S.C. 78f. 

10 In approving this proposed rule change the 

Commission has considered the proposed rule’s 

impact on efficiency, competition and capital 

formation. See 15 U.S.C. 78c(f). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78k–1(a)(1)(C)(iii). 

13The IIV on a per Unit basis disseminated 

during the Core Trading Session should not be 

viewed as a real-time update of the NAV, which is 

calculated once a day. 

14The bid-ask price of the Trust is determined 

using the highest bid and lowest offer on the 

Consolidated Tape as of the time of calculation of 

the closing day NAV. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61496; File No. SR– 

NYSEArca–2009–113] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

a Proposed Rule Change To List and 

Trade the Sprott Physical Gold Trust 

February 4, 2010. 

I. Introduction 

On December 15, 2009, NYSE Arca, 

Inc. (‘‘NYSE Arca’’ or the ‘‘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 to list and trade units 3 of the 

Sprott Physical Gold Trust (the ‘‘Trust’’) 

pursuant to NYSE Arca Equities Rule 

8.201. The proposed rule change was 

published for comment in the Federal 

Register on January 4, 2010.4 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade units (‘‘Units’’) of the Trust under 

NYSE Arca Equities Rule 8.201. Sprott 

Asset Management LP is the sponsor or 

manager of the Trust (‘‘Sponsor’’ or 

‘‘Manager’’).5 RBC Dexia Investor 

Services Trust is the trustee of the Trust. 

The Royal Canadian Mint is the 

custodian for the physical gold bullion 

owned by the Trust and RBC Dexia 

serves as the custodian of the Trust’s 

assets other than physical gold bullion. 

The Units will be issued in an initial 

public offering. The Trust may issue 

additional Units: (i) In future offerings 

if the gross proceeds received by the 

Trust per Unit is not less than 100% of 

the most recently calculated net asset 

value (‘‘NAV’’) or (ii) by way of a 

distribution in Units in connection with 

an income distribution. The Trust will 

not issue Units on an on-going or daily 

basis. At the start of trading, the Trust 

will issue a minimum of 1,000,000 

Units to at least 400 holders 

(‘‘Unitholders’’). The Exchange states 

that the Units satisfy the remaining 

criteria of NYSE Arca Equities Rule 

8.201 and thereby qualify for listing on 

the Exchange.6

The Trust’s investment objective is for 

the Units to reflect the performance of 

the price of gold bullion, less the 

expenses of the Trust’s operations. The 

Trust expects to own only London Good 

Delivery physical gold bullion. The 

Trust is not actively managed and does 

not engage in any activities designed to 

obtain a profit from, or to ameliorate 

losses caused by, changes in the price of 

gold bullion. 

The Exchange states that the Trust 

does not intend to create additional 

Units. The Units will be redeemable 

monthly at the option of the holder for 

physical gold bullion or for cash subject 

to the certain conditions. Generally, 

Units redeemed for physical gold will 

be entitled to a redemption price equal 

to 100% of the NAV of the redeemed 

Units on the last business day of the 

calendar month in which the 

redemption request is processed, less 

redemption and delivery expenses. 

Units redeemed for cash will be entitled 

to a redemption price equal to 95% of 

the lesser of: (i) The volume-weighted 

average trading price of the Units traded 

on the NYSE Arca or, if trading has been 

suspended on NYSE Arca, the trading 

price of the units traded on the Toronto 

Stock Exchange, for the last five 

business days of the month in which the 

redemption request is processed and (ii) 

the NAV of the redeemed Units as of 

4:00 p.m., Toronto time, on the last 

business day of such month.7

Additional information regarding the 

Trust, the Units, the Trust’s investment 

objectives, strategies, policies, and 

restrictions, fees and expenses, creation 

and redemption of Units, the gold 

market, availability of information, 

trading rules and halts, and surveillance 

procedures, among other things, can be 

found in the Notice and in the 

Registration Statement, as applicable.8

III. Discussion and Commission’s 

Findings 

The Commisison has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of Section 6 of the Act 9

and the rules and regulations 

thereunder applicable to a national 

securities exchange.10 In particular, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,11 which requires, among other 

things, that the Exchange’s rules be 

designed to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in facilitating transactions in securities, 

and to remove impediments and perfect 

the mechanisms of a free and opemarket 

and to protect investors and the public 

interest. 

In addition, the Commission finds 

that the proposal to list and trade Units 

on the Exchange is consistent with 

Section 11(a)(1)(C)(iii) of the Act,12

which sets forth Congress’ finding that 

it is in the public interest and 

appropriate for the protection of 

investors to assure the availability to 

brokers, dealers and investors of 

information with respect to quotations 

for and transactions in securities. 

Quotation and last-sale information for 

the Units will be available via the 

Consolidated Tape Association. The 

Trust’s Web site will provide an 

intraday indicative value (‘‘IIV’’) per 

share for the Units, as calculated by a 

third party financial data provider 

during the Exchange’s Core Trading 

Session (9:30 a.m. to 4 p.m., New York 

time). The IIV will be calculated based 

on a price of gold derived from updated 

bids and offers indicative of the spot 

price of gold.13 In addition, the Web site 

for the Trust will contain the following 

information, on a per Unit basis, for the 

Trust: (a) The mid-point of the bid-ask 

price 14 at the close of trading in relation 

to the NAV as of the time the NAV is 

calculated (‘‘Bid/Ask Price’’), and a 

calculation of the premium or discount 

of such price against such NAV; and (b) 

data in chart format displaying the 

frequency distribution of discounts and 

premiums of the Bid/Ask Price against 

the NAV, within appropriate ranges, for 

each of the four previous calendar 

quarters. The Web site for the Trust will 

also provide the Trust’s prospectus, as 

well as the two most recent reports to 

stockholders. Finally, the Trust Web site 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 6779 

15See supra note 4. 

16See e-mail, dated February 4, 2010, from Tim 

Malinowski, NYSE Arca, to Steve Varholik, Special 

Counsel, Division of Trading and Markets, 

Commission. 

17See NYSE Arca Equities Rule 7.12. 

18The Exchange notes that the New York 

Mercantile Exchange, of which the COMEX is a 

division, is an ISG member, however, the Tokyo 

Commodity Exchange, Inc. (‘‘TOCOM’’) is not an 

ISG member and the Exchange does not have in 

place a comprehensive surveillance sharing 

agreement with such market. 

19 15 U.S.C. 78f(b)(5). 

20 15 U.S.C. 78s(b)(2) 

21 17 CFR 200.30–3(a)(12) 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

will provide the last sale price of the 

Units as traded in the U.S. market. In 

addition, the Exchange will make 

available over the Consolidated Tape 

quotation information, trading volume, 

closing prices and NAV for the Units 

from the previous day. 

The Commission further believes that 

the proposal to list and trade the Units 

is reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Units 

appropriately and to prevent trading 

when a reasonable degree of 

transparency cannot be assured. Under 

NYSE Arca Equities Rule 7.34(a)(5), if 

the Exchange becomes aware that the 

NAV is not being disseminated to all 

market participants at the same time, it 

must halt trading on the NYSE 

Marketplace until such time as the NAV 

is available to all market participants. 

The Commission notes that the 

Exchange has received a representation 

from the Trust that, prior to listing, the 

NAV would be calculated daily and 

made available to all market 

participants at the same time.15

Additionally, if the IIV is not being 

disseminated as required, the Exchange 

may halt trading during the day in 

which the disruption occurs; if the 

interruption persists past the day in 

which it occurred, the Exchange will 

halt trading no later than the beginning 

of the trading day following the 

interruption.16 Further, the Exchange 

will consider suspension of trading 

pursuant to NYSE Arca Rule 8.201(e)(2) 

if, after the initial 12 month period 

following commencement of trading: (1) 

The value of gold is no longer calculated 

or available on at least a 15-second 

delayed basis from a source unaffiliated 

with the Sponsor, Trust, custodian or 

the Exchange stops providing a 

hyperlink on its Web site to any such 

unaffiliated commodity value; or (2) if 

the IIV is no longer made available on 

at least a 15-second delayed basis. With 

respect to trading halts, the Exchange 

may consider all relevant factors in 

exercising its discretion to halt or 

suspend trading in the Units. These may 

include: (1) The extent to which 

conditions in the underlying gold 

market have caused disruptions and/or 

lack of trading; or (2) whether other 

unusual conditions or circumstances 

detrimental to the maintenance of a fair 

and orderly market are present. In 

addition, trading in Units will be subject 

to trading halts caused by extraordinary 

market volatility pursuant to the 

Exchange’s ‘‘circuit breaker’’ rule.17

In addition, NYSE Arca Equities Rule 

8.201 sets forth certain requirements for 

ETP Holders acting as Market Makers in 

the Units. Pursuant to NYSE Arca 

Equities Rule 8.201(h), an ETP Holder 

acting as a registered Market Maker in 

the Units is required to provide the 

Exchange with information relating to 

its trading in the underlying gold, 

related futures or options on futures, or 

any other related derivatives. NYSE 

Arca Equities Rule 8.201(i) prohibits an 

ETP Holder acting as a registered Market 

Maker in the Units from using any 

material nonpublic information received 

from any person associated with an ETP 

Holder or employee of such person 

regarding trading by such person or 

employee in the underlying gold, 

related futures or options on futures or 

any other related derivative (including 

the Units). 

In support of this proposal, the 

Exchange has made representations 

including: 

(1) The Units will be subject to the 

initial and continued listing criteria 

under NYSE Arca Equities Rule 8.201. 

(2) The Exchange’s surveillance 

procedures are adequate to properly 

monitor Exchange trading of the Units 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable Federal securities laws. 

Pursuant to NYSE Arca Equities Rule 

8.201(h), the Exchange is able to obtain 

information regarding trading in the 

Units and the underlying gold, gold 

futures contracts, options on gold 

futures, or any other gold derivative, 

through ETP Holders acting as 

registered Market Makers, in connection 

with such ETP Holders’ proprietary or 

customer trades which they effect on 

any relevant market. In addition, the 

Exchange may obtain trading 

information via the Intermarket 

Surveillance Group (‘‘ISG’’) from other 

exchanges who are members of the 

ISG.18

(3) Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading the Units. 

Specifically, the Information Bulletin 

will discuss the following: (1) The 

procedures for purchases and 

redemptions of Units; (2) NYSE Arca 

Equities Rule 9.2(a), which imposes a 

duty of due diligence on its ETP Holders 

to learn the essential facts relating to 

every customer prior to trading the 

Units; (3) how information regarding the 

IIV is disseminated; (4) the requirement 

that ETP Holders deliver a prospectus to 

investors purchasing newly issued Units 

prior to or concurrently with the 

confirmation of a transaction; (5) the 

possibility that trading spreads and the 

resulting premium or discount on the 

Units may widen as a result of reduced 

liquidity of gold trading during the Core 

and Late Trading Sessions after the 

close of the major world gold markets; 

and (6) trading information. 

This approval order is based on the 

Exchange’s representations. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 19 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,20 that the 

proposed rule change (SR–NYSEArca– 

2009–113) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2960 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61494; File No. SR–CBOE– 

2010–012] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Rule 8.85 and 

Rule 8.92 Regarding the Requirement 

To Own an Exchange Membership 

February 4, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

2, 2010, Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 


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