77928 Federal Register / Vol. 75, No. 239 / Tuesday, December 14, 2010 / Notices 

13See NYSE Arca Equities Rule 7.12. 

14 15 U.S.C. 78s(b)(2). 

15See, e.g., Securities Exchange Act Release No. 

59895 (May 8, 2009), 74 FR 22993 (May 15, 2009) 

(SR–NYSEArca–2009–40). 

16See Notice, supra note 4, 75 FR at 69495, nn. 

5–11. 

17 15 U.S.C.78s(b)(2). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

markets 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 Shares will be 

subject to trading halts caused by 

extraordinary market volatility pursuant 

to the Exchange’s ‘‘circuit breaker’’ 

rule.13

Further, NYSE Arca Equities Rule 

8.201 sets forth certain restrictions on 

ETP Holders acting as registered Market 

Makers in the Shares to facilitate 

surveillance. Pursuant to NYSE Arca 

Equities Rule 8.201(g), an ETP Holder 

acting as a registered Market Maker in 

the Shares is required to provide the 

Exchange with information relating to 

its trading in the applicable underlying 

commodity, related commodity futures 

or options on commodity futures, or any 

other related commodity derivatives. 

Commentary .04 of NYSE Arca Equities 

Rule 6.3 requires an ETP Holder acting 

as a registered Market Maker in 

Commodity-Based Trust Shares to 

establish, maintain and enforce written 

policies and procedures reasonably 

designed to prevent the misuse of any 

material nonpublic information with 

respect to such products, any 

components of the related products, any 

physical asset or commodity underlying 

the product, applicable currencies, 

underlying indexes, related futures or 

options on futures, and any related 

derivative instruments. 

In support of this proposal, the 

Exchange has made representations, 

including the following: 

(1) The Shares will be subject to the 

initial and continued listing criteria 

under NYSE Arca Equities Rule 

8.201(e). 

(2) The Exchange’s surveillance 

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. In 

addition, the Exchange may obtain 

trading information via the Intermarket 

Surveillance Group (‘‘ISG’’) from other 

exchanges who are members of the ISG. 

(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 Shares. 

Specifically, the Information Bulletin 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in Baskets 

(including noting that Shares are not 

individually redeemable); (b) NYSE 

Arca Equities Rule 9.2(a), which 

imposes a duty of due diligence on its 

ETP Holders to learn the essential facts 

relating to every customer prior to 

trading the Shares; (c) how information 

regarding the IIV is disseminated; (d) 

the requirement that ETP Holders 

deliver a prospectus to investors 

purchasing newly issued Shares prior to 

or concurrently with the confirmation of 

a transaction; (d) the possibility that 

trading spreads and the resulting 

premium or discount on the Shares 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 (e) 

trading information. In addition, the 

Information Bulletin will reference that 

the Trust is subject to various fees and 

expenses described in the Registration 

Statement. The Information Bulletin 

will also reference the fact that there is 

no regulated source of last sale 

information regarding physical gold, 

that the Commission has no jurisdiction 

over the trading of gold as a physical 

commodity, and that the CFTC has 

regulatory jurisdiction over the trading 

of gold futures contracts and options on 

gold futures contracts. 

This approval order is based on the 

Exchange’s representations. 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,14 for approving the proposed rule 

change prior to the 45th day after 

publication of notice in the Federal 

Register. The Commission does not 

believe that the Exchange’s proposal to 

list and trade the Shares presents any 

novel regulatory issues. The 

Commission has previously approved 

proposals by the Exchange to list and 

trade shares of similar trusts that hold 

gold bullion pursuant to NYSE Arca 

Equities Rule 8.201.15 Additionally, the 

Commission has previously approved 

proposals to list and trade shares of 

trusts that hold other commodities such 

as platinum, palladium, and silver 

pursuant to NYSE Arca Equities Rule 

8.201.16

III. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–NYSEArca– 

2010–95) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31288 Filed 12–13–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63471; File No. SR– 

NYSEArca–2010–108] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. Amending Its Fee Schedule 

December 8, 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 December 

1, 2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ 

or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I 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 amend its 

Fee Schedule (the ‘‘Schedule’’). While 

changes to the Schedule pursuant to this 

proposal will be effective on filing, the 

changes will become operative on 

December 1, 2010. The text of the 

proposed rule change is available at the 

Exchange’s principal office, on the 

Commission’s Web site at http:// 

www.sec.gov, at the Commission’s 

Public Reference Room, and the 

Exchange’s Web site at 

http: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, 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 239 / Tuesday, December 14, 2010 / Notices 77929 

3The proposed exclusion of JBO volumes from 

the $75,000 cap is similar to the provision in 

footnote 11 of the Chicago Board Options 

Exchange’s rate schedule that excludes JBO 

participants from participating in the benefits 

associated with certain sliding scale rates. 

4See Securities Exchange Act Release No. 59393 

(February 11, 2009), 74 FR 7721 (February 19, 2009) 

(File No. SR–PHLX–2009–12). 

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

6 15 U.S.C. 78f(b)(4). 

7See supra note 4 [sic]. 

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

9 17 CFR 240.19b–4(f)(2). 

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 

The purpose of this filing is to amend 

the Schedule to cap transaction fees for 

Firm Proprietary trades executed in 

open outcry (manual trades) at $75,000 

per month. The proposed cap will 

become operative on December 1, 2010. 

The proposed fees will only apply to 

OTP Holder transactions marked with 

account origin code ‘‘F’’, and will not 

include Royalty Fees, which are passthrough fees whose purpose is to cover 

payments that must be made by the 

Exchange without respect to any cap, 

and Strategy Executions, which are 

subject to a separate daily cap. 

Execution of orders on behalf of Joint 

Back Office (‘‘JBO’’) participants will not 

be included in the monthly cap on fees 

because the Exchange is unable to 

differentiate orders of a JBO participant 

from orders of its clearing broker-dealer, 

and is therefore unable to aggregate the 

JBO participant’s orders.3

The proposed fee cap is similar to a 

monthly cap previously adopted by 

NASDAQ OMX PHLX, Inc. (‘‘PHLX’’) 

that is currently applicable to all firm 

proprietary orders on that exchange, and 

which also excludes orders of JBO 

participants. In a rule filing last year, 

PHLX increased that cap to $75,000 per 

month per firm, which is the same level 

as the Exchange’s proposed cap.4

The Exchange believes the proposed 

cap on Firm transaction fees will help 

attract participants to direct proprietary 

orders for execution on the Trading 

Floor of the Exchange. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),5 in general, and Section 6(b)(4) 

of the Act,6 in particular, in that it is 

designed to provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

other persons using its facilities. The 

proposed change to the Schedule is part 

of the Exchange’s continued effort to 

attract and enhance participation on the 

Exchange by offering competitive rates 

for certain transactions on the Exchange. 

The proposed changes to the Schedule 

are equitable in that they apply 

uniformly to all similarly situated OTP 

Holders. The Exchange also believes 

that the proposed monthly fee cap is 

equitable, even though it is not available 

to JBO participants, because the 

Exchange intends to compete for nonJBO firm business with the CBOE, 

which excludes JBO participants from 

its sliding scale for the same reason as 

the Exchange, which is that each is 

unable to identify these orders from a 

billing standpoint to bill them 

correctly.7

In addition, the Exchange believes 

that the proposed monthly fee cap, 

which applies only to manual Firm 

Proprietary trades, is not unfairly 

discriminatory to other market 

participants because its purpose is to 

attract large block order flow to the floor 

of the Exchange where such orders can 

be better handled in comparison with 

electronic orders that are not negotiable. 

To the extent that this purpose is 

achieved, all of the Exchange’s market 

participants should benefit from the 

improved market liquidity. 

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 

The foregoing rule change is effective 

upon filing pursuant to Section 

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

subparagraph (f)(2) of Rule 19b–4 9

thereunder, because it establishes a due, 

fee, or other charge imposed by NYSE 

Arca on its members. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend 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. 

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–NYSEArca–2010–108 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–2010–108. 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, 100 F Street, NE., 

Washington, DC 20549, 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– 


srobinson on DSKHWCL6B1PROD with NOTICES
77930 Federal Register / Vol. 75, No. 239 / Tuesday, December 14, 2010 / Notices 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 61727 

(March 17, 2010), 75 FR 14217 (March 24, 2010) 

(SR–NYSEArca–2010–13). 

4See Securities Exchange Act Release No. 62192 

(May 28, 2010), 75 FR 31828 (June 4, 2010) (SR– 

CBOE–2010–052). 

5Currently the $1 cabinet trading procedures are 

limited to options classes traded in $0.05 or $0.10 

standard increment. The $1 cabinet trading 

procedures are not available in Penny Pilot Program 

classes because in those classes an option series can 

trade in a standard increment as low as $0.01 per 

share (or $1.00 per option contract with a 100 share 

multiplier). Because the instant rule change would 

allow trading below $0.01 per share (or $1.00 per 

option contract with a 100 share multiplier), the 

procedures would be made available for all classes, 

including those classes participating in the Penny 

Pilot Program. 

NYSEArca–2010–108 and should be 

submitted on or before January 4, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31289 Filed 12–13–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63476; File No. SR– 

NYSEARCA–2010–109] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Re-establishing and 

Extending the Exchange’s Pilot 

Program Relating to Cabinet Trades 

Until June 1, 2011 

December 8, 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 December 

2, 2010, 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 re-establish 

and extend its program that allows 

transactions to take place at a price that 

is below $1 per option contract until 

June 1, 2011. The text of the proposed 

rule change is available at the Exchange, 

the Commission’s Public Reference 

Room, and http://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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to reestablish the Pilot Program 3 under Rule 

6.80 to allow accommodation 

transactions (‘‘Cabinet Trades’’) to take 

place at a price that is below $1 per 

option contract, and to extend the 

program to June 1, 2011. The Exchange 

proposes to extend the program to the 

same date as The Chicago Board 

Options Exchange (‘‘CBOE’’).4 The Pilot 

Program expired on July 1, 2010. 

An ‘‘accommodation’’ or ‘‘cabinet’’ 

trade refers to trades in listed options on 

the Exchange that are worthless or not 

actively traded. Cabinet trading is 

generally conducted in accordance with 

the Exchange Rules, except as provided 

in Exchange Rule 6.80 Accommodation 

Transactions (Cabinet Trades), which 

sets forth specific procedures for 

engaging in cabinet trades. Rule 6.80 

currently provides for cabinet 

transactions to occur via open outcry at 

a cabinet price of a $1 per option 

contract in any options series open for 

trading in the Exchange, except that the 

Rule is not applicable to trading in 

option classes participating in the 

Penny Pilot Program. Under the 

procedures, bids and offers (whether 

opening or closing a position) at a price 

of $1 per option contract may be 

represented in the trading crowd by a 

Floor Broker or by a Market-Maker or 

provided in response to a request by a 

Trading Official, a Floor Broker or a 

Market-Maker, but must yield priority to 

all resting orders in the Cabinet (those 

orders held by the Trading Official, and 

which resting cabinet orders may be 

closing only). So long as both the buyer 

and the seller yield to orders resting in 

the cabinet book, opening cabinet bids 

can trade with opening cabinet offers at 

$1 per option contract. 

The Exchange temporarily amended 

the procedures through July 1, 2010 to 

allow transactions to take place in open 

outcry at a price of at least $0 but less 

than $1 per option contract. These lower 

priced transactions were permitted to be 

traded pursuant to the same procedures 

applicable to $1 cabinet trades, except 

that (i) bids and offers for opening 

transactions were only permitted to 

accommodate closing transactions in 

order to limit use of the procedure to 

liquidations of existing positions, and 

(ii) the procedures were also made 

available for trading in option classes 

participating in the Penny Pilot 

Program.5 The Exchange believed (and 

continues to believe) that allowing a 

price of at least $0 but less than $1 

would better accommodate the closing 

of options positions in series that were 

worthless or not actively traded, 

particularly due to recent market 

conditions which had resulted in a 

significant number of series being outof-the-money. For example, a market 

participant might have a long position 

in a call series with a strike price of 

$100 and the underlying stock might be 

trading at $30. In such an instance, there 

might not otherwise be a market for that 

person to close-out the position even at 

the $1 cabinet price (e.g., the series 

might be quoted no bid). 

As with other accommodation 

liquidations under Rule 6.80, 

transactions that occur for less than $1 

will not be disseminated to the public 

on the consolidated tape. In addition, as 

with other accommodation liquidations 

under Rule 6.80, the transactions will be 

exempt from the Consolidated Options 

Audit Trail (‘‘COATS’’) requirements of 

Exchange Rule 6.67 Order Format and 

System Entry Requirements. However, 

the Exchange will maintain quotation, 

order and transaction information for 

the transactions in the same format as 

the COATS data is maintained. In this 

regard, all transactions for less than $1 

must be reported to the Exchange 

following the close of each business 

day. 

The Pilot Program lapsed on July 1, 

2010. The Exchange is proposing to 

reinstate the Program at this time to be 

in place for end-of-year liquidations. 

During the period from July 1 to date, 

no sub-penny cabinet trades were 

executed on the Exchange. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 


srobinson on DSKHWCL6B1PROD with NOTICES