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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6780 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 

3See Exchange Act Release No. 43186 (August 21, 

2000), 65 FR 51880 (August 25, 2000) (SR–CBOE– 

99–37). 

4See Exchange Act Release No. 58425 (August 26, 

2008), 73 FR 51652 (September 4, 2008) (noticing 

for comment SR–CBOE–2008–088). CBOE has 

consented to an extension of time for Commission 

action on this proposed rule change pending a 

membership vote. 

5CBOE notes that Temporary Members under 

Rule 3.19.02 will not be adversely impacted by this 

proposed rule change. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III 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 

CBOE proposes to amend proposes to 

amend proposes to amend [sic] Rule 

8.85 and Rule 8.92 regarding the 

requirement to own an Exchange 

membership. The text of the rule 

proposal is available on the Exchange’s 

Web site (http://www.cboe.org/legal), at 

the Exchange’s Office of the Secretary 

and at the Commission. 

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 

CBOE proposes to amend Rule 8.85 

and Rule 8.92 to eliminate the 

requirement that a DPM organization 

and an e-DPM organization are required 

to own at least one Exchange 

membership. Instead, each DPM 

organization and each e-DPM 

organization will be required to own or 

lease such number of Exchange 

memberships as may be necessary based 

on the aggregate ‘‘appointment cost’’ for 

the classes allocated to the DPM 

organization or e-DPM organization. 

CBOE established this ownership 

requirement with respect to DPMs in 

2000 and, at the time, believed that it 

was appropriate and would encourage 

DPMs to have a long-term commitment 

to CBOE.3 CBOE later included this 

requirement when its e-DPM program 

was adopted. 

CBOE no longer believes that this 

requirement is necessary particularly as 

its proposed restructuring approaches, 

and eliminating it may attract new DPM 

organizations to CBOE who otherwise 

may not be willing to apply to be a DPM 

due to this membership ownership 

requirement. CBOE notes that in 

connection with its plan to restructure 

from a Delaware non-stock corporation 

owned by its members to a Delaware 

stock corporation that will be a whollyowned subsidiary of CBOE Holdings, 

this requirement will be eliminated. 

Specifically, as part of CBOE’s 

restructuring, the owners of 

membership interests will become 

stockholders of CBOE Holdings through 

the conversion of their memberships 

into shares of common stock of CBOE 

Holdings. Additionally, Trading Permits 

will provide trading access to the 

Exchange, and not Exchange 

memberships as is currently the case. A 

Trading Permit will not convey any 

ownership interest in the Exchange, and 

will only be available through the 

Exchange.4 As part of this proposed rule 

change, CBOE proposes conforming 

changes to Rule 3.27, and proposes to 

delete Interpretation .04 of Rule 8.85 

and Interpretation .01 of Rule 8.92 

which are no longer necessary in light 

of the elimination of the membership 

ownership requirement.5

In connection with this proposed rule 

change, CBOE proposes to delete 

Interpretation .03 of Rule 8.85, which 

was adopted in 2003 for the purpose of 

allowing a senior principal’s ownership 

of a membership to satisfy the 

requirement on behalf of the DPM 

organization, but only if the senior 

principal meets certain criteria. In light 

of the fact that CBOE is eliminating the 

membership ownership requirement, 

Interpretation .03 no longer is 

applicable or necessary. 

2. Statutory Basis 

The Exchange believes the rule 

proposal is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

under the Act applicable to a national 

securities exchange and, in particular, 

the requirements of Section 6(b) of the 

Act.6 Specifically, the Exchange 

believes that the proposed rule change 

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

Act 7 requirements that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts and, in general, to protect investors 

and the public interest. The DPM and eDPM membership ownership 

requirement is no longer necessary and 

eliminating it may attract new 

organizations to act in the capacity of a 

DPM (or e-DPM). Additionally, this 

requirement will be eliminated in 

connection with CBOE’s restructuring. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition 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 

Because the foregoing proposed rule 

does not (i) significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate if 

consistent with the protection of 

investors and the public interest, 

provided that the self-regulatory 

organization has given the Commission 

written notice of its intent to file the 

proposed rule change at least five 

business days prior to the date of filing 

of the proposed rule change or such 

shorter time as designated by the 

Commission, the proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 8 and Rule 

19b–4(f)(6) thereunder.9 At any time 

within 60 days of the filing of such 

proposed rule change, the Commission 

may summarily abrogate such rule 

change if it appears to the Commission 

that such action is necessary or 

appropriate in the public interest, for 

the protection of investors, or otherwise 

in furtherance of the purposes of the 

Act. 


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10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(2). 

5 ‘‘Trade value’’ is defined in our Fee Schedule as 

‘‘a dollar amount equal to the price per share 

multiplied by the number of shares executed.’’ 

6The Direct Edge ECN raised its provide credit to 

0.15% for transactions under $1 in Tape A, B and 

C securities for its EDGX trading platform beginning 

in the month of January 2010. 

7 15 U.S.C. 78f. 

8 15 U.S.C. 78f(b)(4). 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2010–012 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–CBOE–2010–012. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://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 Room, on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2010–012 and 

should be submitted on or before March 

3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2959 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61493; File No. SR–CHX– 

2010–03] 

Self-Regulatory Organizations; The 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Increase 

the Provide Credit for Transactions 

Involving Issues Priced Less Than One 

Dollar 

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 January 

29, 2010, the Chicago Stock Exchange, 

Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

CHX has filed the proposal pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(2) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. 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 CHX proposes to amend its 

Schedule of Participant Fees and 

Assessments (the ‘‘Fee Schedule’’), 

effective February 1, 2010, to change its 

transaction fees and rebates to Exchange 

Participants for transactions involving 

issues priced less than one dollar that 

occur within the Exchange’s Matching 

System. The text of this proposed rule 

change is available on the Exchange’s 

Web site at http://www.chx.com/rules/ 

proposed_rules.htm and in the 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549. 

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 

CHX included statements concerning 

the purpose of and basis for the 

proposed rule changes and discussed 

any comments it received regarding the 

proposal. The text of these statements 

may be examined at the places specified 

in Item IV below. The CHX has prepared 

summaries, set forth in sections A, B 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Changes 

1. Purpose 

Through this filing, the Exchange 

would amend its Fee Schedule to 

increase the provide credit to Exchange 

Participants for transactions involving 

issues priced less than one dollar that 

occur within the Exchange’s Matching 

System. 

The Exchange proposes to increase 

the provide credit in the transactions 

described above from 0.10% to 0.15% of 

the trade value.5 The Exchange believes 

that the increased rebate will help 

attract additional orders to be displayed 

and executed on our trading facilities. 

The Exchange notes that some of our 

competitors have recently raised their 

provide rebates for securities priced 

under $1, and that our proposed 

increase will help us remain 

competitive with these entities.6

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act 7 in general, and 

furthers the objectives of Section 6(b)(4) 

of the Act 8 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among its members. Among other 

things, the change to the fee schedule 

would provide incentives to 

Participants to increase the amount of 

liquidity provided on our trading 

facilities for securities priced less than 

$1, which may contribute to an increase 


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