56204 Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 

9See Exchange Act Release No. 28726 (December 

28, 1990), 56 FR 540 (January 7, 1991) (SR–NYSE–

89–24); and NYSE Information Memoranda 98–09 

(March 5, 1998) and 94–22 (June 10, 1994); see also 

NYSE Information Memorandum 05–78 (October 

12, 2005). 

10See supra note 5. 

11See supra note 6. 

12 15 U.S.C. 78o–3(b)(6). In approving this 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

13 15 U.S.C. 78s(b)(2). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In October 1999, the Commission approved 

NYSE Arca Equities Rule 5.2(j)(3), which sets forth 

the rules related to listing and trading criteria for 

Investment Company Units. See Securities 

Exchange Act Release No. 41983 (October 6, 1999), 

64 FR 56008 (October 15, 1999) (SR–PCX–1998–29). 

In July 2001, the Commission also approved the 

Exchange’s generic listing standards for listing and 

trading, or the trading pursuant to UTP, of 

Investment Company Units under NYSE Arca 

Equities Rule 5.2(j)(3). See Securities Exchange Act 

Release No. 44551 (July 12, 2001), 66 FR 37716–01 

(July 19, 2001) (SR–PCX–2001–14). The definition 

of an Investment Company Unit is set forth in NYSE 

Arca Equities Rule 5.1(b)(15), which provides that 

an Investment Company Unit is a security 

representing an interest in a registered investment 

company that could be organized as a unit 

investment trust, an open-end management 

investment company or a similar entity. 

4See Securities Exchange Release No. 54458 

(September 15, 2006) (SR–NYSE–2006–60) (the 

‘‘NYSE Proposal’’). 

5NYSE Arca Equities Rule 5.2(j)(3)(A)(i)(a) allows 

the listing and trading of Investment Company 

Units issued by a registered investment company 

that holds securities comprising, or otherwise based 

on or representing an interest in, an index or 

portfolio or securities. The Trust is registered under 

the Investment Company Act of 1940 (15 U.S.C. 

80a) (the ‘‘Investment Company Act’’). On April 15, 

2005, the Trust filed with the Commission a 

Registration Statement for the Funds on Form N–

1A under the Securities Act of 1933 (15 U.S.C. 77a), 

and under the Investment Company Act relating to 

the Funds (File Nos. 333–92935 and 811–09729). 

proposed NASD monthly reporting 

requirement are consistent with the 

NYSE’s current program.9

III. Summary of Comment Received 

and NASD Response 

The Commission received one 

comment letter to the proposed rule 

change.10 The commenter stated that the 

proposed monthly reporting 

requirement would place an undue 

burden on self-clearing firms and 

requested that NASD amend the 

proposed rule to clarify that the 

monthly reporting requirement applies 

solely to clearing firms which clear for 

other broker-dealers. In its response, 

NASD stated that it did not intend for 

the proposed monthly reporting 

requirement to apply to self-clearing 

firms that do not clear for other brokerdealers, and that the proposed rule 

would not require these self-clearing 

firms to file the monthly report. 11

Finally, NASD stated that it will 

reiterate this position in the Notice to 

Members announcing Commission 

approval of the proposed rule. 

IV. Discussion and Commission 

Findings 

The Commission has reviewed the 

proposed rule filing, as amended, and 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Exchange Act, and, 

in particular, Section 15A(b)(6) of the 

Act,12 which requires, among other 

things, that NASD’s rules must be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. The 

Commission believes that the proposed 

rule change will further assist NASD in 

ensuring that firms are complying with 

financial responsibility rules and 

preventing the excessive use of credit 

for the purchase or carrying of 

securities. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (File No. SR–

NASD–2006–064), as amended, be, and 

it hereby is approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.14

Nancy M. Morris, 

Secretary. 

[FR Doc. 06–8239 Filed 9–25–06; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54473; File No. SR–

NYSEArca–2006–60] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and Order 

Granting Accelerated Approval of 

Proposed Rule Change Relating to 

Trading Shares of iShares S&P 

Global Index Funds Pursuant to 

Unlisted Trading Privileges 

September 20, 2006. 

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 

September 14, 2006, NYSE Arca, Inc. 

(‘‘Exchange’’), through its wholly owned 

subsidiary NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’ or the 

‘‘Corporation’’), 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 and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to trade 

shares (‘‘Shares’’) of the following five 

funds of the iShares Trust (the 

‘‘Trust’’): iShares S&P Global Consumer 

Discretionary Sector Index Fund, 

iShares S&P Global Consumer Staples 

Sector Index Fund, iShares S&P Global 

Industrials Sector Index Fund, iShares 

S&P Global Utilities Sector Index Fund 

and iShares S&P Global Materials Sector 

Index Fund (the ‘‘Funds’’) pursuant to 

unlisted trading privileges (‘‘UTP’’) 

under NYSE Arca Equities Rule 5.2(j)(3). 

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 

Exchange 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 these 

statements may be examined at the 

places specified in Item III below. The 

Exchange 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 

Change 

1. Purpose 

Under NYSE Arca Equities Rule 

5.2(j)(3), the Exchange may propose to 

list or trade pursuant to UTP 

‘‘Investment Company Units.’’ 3 The 

Commission previously approved a 

proposal to list and trade the Shares of 

the Funds by the New York Stock 

Exchange, LLC (‘‘NYSE’’).4 The 

Exchange proposes to trade pursuant to 

UTP the Shares of the Funds under 

NYSE Arca Equities Rule 5.2(j)(3).5

Because the Funds invest in non-U.S. 

securities not listed on a national 

securities exchange or the Nasdaq Stock 

Market (‘‘Nasdaq’’), the Funds do not 

meet the ‘‘generic’’ listing requirements 


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6 17 CFR 240.19b–4(e); 15 U.S.C. 78s(b)(4). 

7 Id. 

8An Authorized Participant must be either a 

‘‘Participating Party’’, i.e., a broker-dealer or other 

participant in the clearing process through the 

National Securities Clearing Corporation (‘‘NSCC’’) 

Continuous Net Settlement System, a clearing 

agency that is registered with the Commission, or 

a Depository Trust Company (‘‘DTC’’) participant, 

and in each case, must enter into a Participant 

Agreement. 

9The Trust reserves the right to permit or require 

the substitution of an amount of cash—i.e., a ‘‘cash 

in lieu’’ amount—to be added to the Balancing 

Amount to replace any Deposit Security that may 

not be available in sufficient quantity or that may 

not otherwise be eligible for transfer. 

10The Trust may also make redemptions in cash 

in lieu of transferring one or more Fund Securities 

to a redeemer if the Trust determines, in its 

discretion, that such method is warranted due to 

unusual circumstances (e.g., when a redeeming 

entity is restrained by regulation or policy from 

transacting in certain Fund Securities, such as the 

presence of Fund Securities on a redeeming 

investment banking firm’s restricted list). 

of NYSE Arca Equities Rule 5.2(j)(3), 

which permit listing and trading of 

Investment Company Units in reliance 

upon Rule 19b–4(e) under the Act.6

Therefore, to trade the Funds pursuant 

to UTP, the Exchange must file, and 

obtain Commission approval of, a 

proposed rule change pursuant to Rule 

19b–4 under the Act.7

The Shares represent beneficial 

ownership interests in the net assets of 

the Funds, less expenses. As set forth in 

detail in the NYSE Proposal, the Funds 

will hold certain securities 

(‘‘Component Securities’’) selected to 

correspond generally to the performance 

of the following indexes, respectively: 

(1) S&P Global Consumer Discretionary 

Index; (2) S&P Global Consumer Staples 

Index; (3) S&P Global Industrials Index; 

(4) S&P Global Utilities Index; and (5) 

S&P Global Materials Index (each an 

‘‘Underlying Index; collectively, the 

‘‘Underlying Indexes’’). Each of the 

Underlying Indexes is a subset of the 

Standard & Poor’s Global 1200 Index. 

The Underlying Indexes are free float 

adjusted and market capitalization 

weighted. 

The investment objective of the Funds 

will be to provide investment results 

that correspond generally to the price 

and yield performance of the 

Underlying Indexes. In seeking to 

achieve their investment objective, the 

Funds will utilize ‘‘passive’’ indexing 

investment strategies. The Funds may 

fully replicate their respective 

Underlying Index, but currently intend 

to use a ‘‘representative sampling’’

strategy to track the applicable 

Underlying Index. A Fund utilizing a 

representative sampling strategy 

generally will hold a basket of the 

Component Securities of its Underlying 

Index, but it may not hold all of the 

Component Securities of its Underlying 

Index. 

Each Fund will invest at least 90% of 

its assets in the securities of its 

Underlying Index or in American 

Depositary Receipts (‘‘ADRs’’), Global 

Depositary Receipts, or European 

Depositary Receipts (collectively 

‘‘Depositary Receipts’’) representing 

securities in the Underlying Index. A 

Fund may invest the remainder of its 

assets in securities not included in its 

Underlying Index, but which Barclays 

Global Fund Advisors (the ‘‘Advisor’’) 

believes will help the Fund track its 

Underlying Index. For example, a Fund 

may invest in securities not included in 

its Underlying Index in order to reflect 

various corporate actions (such as 

mergers) and other changes in its 

Underlying Index (such as 

reconstitutions, additions and 

deletions). A Fund also may invest its 

other assets in futures contracts, options 

on futures contracts, options, and swaps 

related to its Underlying Index, as well 

as cash and cash equivalents, including 

shares of money market funds affiliated 

with the Advisor. 

To the extent the Funds invest in 

ADRs, such ADRs will be listed on a 

national securities exchange or Nasdaq, 

and to the extent the Funds invest in 

other Depositary Receipts, such 

Depositary Receipts will be listed on a 

foreign exchange. The Funds will not 

invest in any listed or unlisted 

Depositary Receipts that the Advisor 

deems to be illiquid or for which pricing 

information is not readily available. In 

addition, all Depositary Receipts must 

be sponsored (with the exception of 

certain pre-1984 ADRs that are listed 

and unsponsored because they are 

grandfathered). 

Each Fund will not concentrate its 

investments (i.e., hold 25% or more of 

its total assets in the stocks of a 

particular industry or group of 

industries), except that a Fund will 

concentrate to approximately the same 

extent that its Underlying Index 

concentrates in the stocks of such 

particular industry or group of 

industries. In such case, a Fund could 

hold 25% or more of its total assets in 

the stocks of such industry or group of 

industries. For purposes of this 

limitation, securities of the U.S. 

Government (including its agencies and 

instrumentalities), repurchase 

agreements collateralized by U.S. 

Government securities, and securities or 

state or municipal governments and 

their political subdivisions are not 

considered to be issued by members of 

any industry. 

(a) The Shares 

A description of the Trust, the 

operation of the Funds and the creation 

and redemption process for the Shares 

is set forth in the NYSE Proposal. To 

summarize, issuances of Shares will be 

made only in aggregations of at least 

50,000 Shares or multiples thereof 

(‘‘Creation Units’’ or ‘‘Creation Unit 

Aggregations’’). The Funds will issue 

and redeem the Shares on a continuous 

basis, by or through participants that 

have entered into participant 

agreements (each, an ‘‘Authorized 

Participant’’) 8 with SEI Investments 

Distribution Co. (the ‘‘Distributor’’). 

Persons purchasing Creation Unit 

Aggregations from the Funds do so 

through an ‘‘in-kind’’ process in which 

a basket of securities (the ‘‘Deposit 

Securities’’), together with an amount of 

cash (the ‘‘Balancing Amount’’), plus 

the applicable transaction fee, is 

deposited with the Fund.9 A redeeming 

Authorized Participant deposits Fund 

Shares in Creation Unit Aggregations 

generally in exchange for a basket of 

securities (the ‘‘Fund Securities’’) and a 

balancing cash payment (‘‘Cash 

Redemption Payment’’).10 The 

redeeming Authorized Participant must 

pay a transaction fee to the Fund. Fund 

Securities received on redemption may 

not be identical to Deposit Securities 

deposited in connection with creations 

of Creation Unit Aggregations for the 

same day. 

The NAV of each Fund is calculated 

by Investors Bank & Trust Company 

(‘‘IBT’’). IBT determines the NAV at the 

close of regular trading of the NYSE 

(ordinarily 4 p.m. New York time) on 

each day that the NYSE is open for 

trading. The NAV for each Fund is 

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 are accrued daily and 

taken into account for purposes of 

determining NAV. More information 

regarding the calculation of the NAV is 

set forth in the NYSE Proposal. 

(b) Availability of Information About 

the Shares and the Underlying Indexes 

On each business day the list of 

names and amount of each security 

constituting the current Deposit 

Securities of the Fund Deposit and the 

Balancing Amount effective as of the 

previous business day, per outstanding 

Share of each Fund, will be made 

available. According to the NYSE 

Proposal, an amount per Share 

representing the sum of the estimated 

Balancing Amount effective through and 

including the previous business day, 

plus the current value of the Deposit 

Securities in U.S. dollars, on a per Share 


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56206 Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 

11The IOPV ticker is available at 

www.ishares.com and the IOPV is publicly available 

utilizing this ticker through various financial Web 

sites such as http://finance.yahoo.com. 

12Because NSCC does not disseminate the new 

basket amount to market participants until 

approximately 6 p.m. to 7 p.m. ET, an updated 

IOPV is not possible to calculate during the 

Exchange’s late trading session (4:15 p.m. to 8 p.m. 

ET). The Exchange may rely on the listing market 

to monitor dissemination of the IOPV during the 

Exchange’s core trading session (9:30 a.m. to 4:15 

p.m. ET). Currently the official index sponsors for 

the Funds’ indexes do not calculate updated index 

values during the Exchange’s late trading session; 

however, if the index sponsors did so in the future, 

the Exchange will not trade this product unless 

such official index value is widely disseminated. 

13See NYSE Arca Equities Rule 7.12. 

basis (the ‘‘Intra-day Optimized 

Portfolio Value’’ or ‘‘IOPV’’) will be 

calculated by an independent third 

party that is a major market data vendor 

(the ‘‘Value Calculator’’), such as 

Bloomberg L.P., every 15 seconds from 

9:30 a.m. to 4:15 p.m. Eastern Time 

(‘‘ET’’) and disseminated every 15 

seconds on the Consolidated Tape. 

The IOPV reflects the current value of 

the Deposit Securities and the Balancing 

Amount. The IOPV also reflects changes 

in currency exchange rates between the 

U.S. dollar and the applicable home 

foreign currency.11

Since the Funds will utilize a 

representative sampling strategy, the 

IOPV may not reflect the value of all 

securities included in the Underlying 

Indexes. In addition, the IOPV does not 

necessarily reflect the precise 

composition of the current portfolio of 

securities held by the Funds at a 

particular point in time. Therefore, the 

IOPV on a per Share basis should not be 

viewed as a real time update of the NAV 

of the Funds, which is calculated only 

once a day. 

While the IOPV disseminated at 9:30 

a.m. is expected to be generally very 

close to the most recently calculated 

Fund NAV on a per Share basis, it is 

possible that the value of the portfolio 

of securities held by each Fund may 

diverge from the Deposit Securities 

values during any trading day. In such 

case, the IOPV will not precisely reflect 

the value of each Fund’s portfolio. 

However, during the trading day, the 

IOPV can be expected to closely 

approximate the value per Share of the 

portfolio of securities for each Fund 

except under unusual circumstances 

(e.g., in the case of extensive 

rebalancing of multiple securities in a 

Fund at the same time by the Advisor). 

There is an overlap in trading hours 

between the foreign and U.S. markets 

with respect to the Funds. Therefore, 

the Value Calculator will update the 

applicable IOPV every 15 seconds to 

reflect price changes in the applicable 

foreign market or markets, and convert 

such prices into U.S. dollars based on 

the currency exchange rate. When the 

foreign market or markets are closed but 

U.S. markets are open, the IOPV will be 

updated every 15 seconds to reflect 

changes in currency exchange rates after 

the foreign market closes. The IOPV will 

also include the applicable cash 

component for each Fund. 

In addition, a value for the 

Underlying Indexes will be 

disseminated once each trading day, 

based on closing prices in the relevant 

exchange market, utilizing the currency 

exchange rates of WM/Reuters (or 

another major market data vendor). In 

each Underlying Index, the prices used 

to calculate the Underlying Indexes are 

the official exchange closing prices or 

those figures accepted as such. S&P 

reserves the right to use an alternative 

pricing source on any given day. 

As stated above under the heading 

‘‘The Shares,’’ the NAV for the Fund 

will be calculated daily by IBT. IBT will 

also disseminate the information daily 

to Barclays Global Investors, N.A., the 

Distributor, the NYSE and others. The 

Funds’ NAV will be published in a 

number of places, including, http:// 

www.iShares.com and on the 

Consolidated Tape. 

Closing prices of the Funds’ Deposit 

Securities are readily available from, as 

applicable, the relevant exchanges, 

automated quotation systems, published 

or other public sources in the relevant 

country, or on-line information services 

such as Bloomberg or Reuters. The 

exchange rate information required to 

convert such information into U.S. 

dollars is also readily available in 

newspapers and other publications and 

from a variety of on-line services. 

In addition, the Web site for the Trust, 

http://www.iShares.com, which will be 

publicly accessible at no charge (and to 

which the Exchange will provide a 

hyperlink on its Web site), will contain 

the following information: (1) The prior 

business day’s NAV and the mid-point 

of the bid-ask price at the time of 

calculation of such NAV (‘‘Bid/Ask 

Price’’), and a calculation of the 

premium or discount of such price 

against such NAV; and (2) 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. 

Beneficial owners of the Funds will 

receive all of the statements, notices, 

and reports required under the 

Investment Company Act and other 

applicable laws. They will receive, for 

example, annual and semi-annual 

reports, written statements 

accompanying dividend payments, 

proxy statements, annual notifications 

detailing the tax status of distributions, 

IRS Form 1099–DIVs, etc. Because the 

Trust’s records reflect ownership of 

Shares by DTC only, the Trust will make 

available applicable statements, notices, 

and reports to the DTC Participants 

who, in turn, will be responsible for 

distributing them to the beneficial 

owners. 

(c) UTP Trading Criteria 

The Exchange represents that it will 

cease trading the Shares of a Fund if: (a) 

The listing market stops trading the 

Shares because of a regulatory halt 

similar to a halt based on NYSE Arca 

Equities Rule 7.12 or a halt because the 

IOPV or the value of the applicable 

Underlying Index is no longer available; 

or (b) the listing market delists the 

Shares. Additionally, the Exchange may 

cease trading the Shares of a Fund if 

such other event shall occur or 

condition exists which in the opinion of 

the Exchange makes further dealings on 

the Exchange inadvisable. 

(d) 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 9:30 

a.m. until 8 p.m. ET, even if the IOPV 

is not disseminated from 4:15 p.m. to 8 

p.m. ET.12 The Exchange has 

appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. The minimum trading 

increment for Shares on the Exchange 

will be $0.01. 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

a Fund. 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 securities 

comprising an Underlying Index and/or 

the Depositary Receipts of a Fund; 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 or by the halt or 

suspension of trading of the underlying 

securities. See ‘‘UTP Trading Criteria’’

above for specific instances when the 

Exchange will cease trading the Shares. 

Shares will be deemed ‘‘Eligible 

Listed Securities,’’ as defined in NYSE 


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14For a list of the current members and affiliate 

members of ISG, see www.isgportal.com. 

15The Exchange recently amended NYSE Arca 

Equities Rule 9.2(a) (‘‘Diligence as to Accounts’’) to 

provide that ETP Holders, before recommending a 

transaction, must have reasonable grounds to 

believe that the recommendation is suitable for the 

customer based on any facts disclosed by the 

customer as to his other security holdings and as 

to his financial situation and needs. Further, the 

proposed rule amendment provides, with a limited 

exception, that prior to the execution of a 

transaction recommended to a non-institutional 

customer, the ETP Holders shall make reasonable 

efforts to obtain information concerning the 

customer’s financial status, tax status, investment 

objectives, and any other information that they 

believe would be useful to make a recommendation. 

See Securities Exchange Act Release No. 54045 

(June 26, 2006), 71 FR 37971 (July 3, 2006) (SR–

PCX–2005–115). 

16See In the Matter of iShares, Inc., et al., 

Investment Company Act Release No. 25623 (June 

25, 2002), which permits dealers to sell Shares in 

the secondary market unaccompanied by a statutory 

prospectus when prospectus delivery is not 

required by the Securities Act of 1933. Any product 

description used in reliance on the Section 24(d) 

exemptive order will comply with all 

representations and conditions set forth in the 

order. 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(5). 

19 17 CFR 240.12f–5. 

Arca Equities Rule 7.55, for purposes of 

the Intermarket Trading System (‘‘ITS’’) 

Plan and therefore will be subject to the 

trade through provisions of NYSE Arca 

Equities Rule 7.56, which require that 

ETP Holders avoid initiating tradethroughs for ITS securities. 

(e) Surveillance 

The Exchange intends to utilize its 

existing surveillance procedures 

applicable to derivative products to 

monitor trading in the Shares. The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares. 

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 may obtain information 

via the Intermarket Surveillance Group 

(‘‘ISG’’) from other exchanges who are 

members or affiliates of the ISG.14

(f) 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 

procedures for purchases and 

redemptions of Shares in Creation Unit 

Aggregations (and that Shares are not 

individually redeemable); (2) NYSE 

Arca Equities Rule 9.2(a),15 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; (3) how information 

regarding the IOPV is disseminated; (4) 

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 (5) 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.16 The 

Exchange notes that investors 

purchasing Shares directly from the 

Trust will receive a prospectus. ETP 

Holders purchasing Shares from the 

Trust for resale to investors will deliver 

a prospectus to such investors. 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 Trust is subject 

to various fees and expenses described 

in the Registration Statement. The 

Information Bulletin will also disclose 

that the NAV for the Shares will be 

calculated shortly after 4 p.m. ET each 

trading day. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

section 6(b) of the Act,17 in general, and 

furthers the objectives of section 

6(b)(5),18 in particular, because it is 

designed to prevent fraudulent and 

manipulative act and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments and perfect the 

mechanisms of a free and open market, 

and, in general, to protect investors and 

the public interest. 

In addition, the Exchange believes 

that the proposal is consistent with Rule 

12f–5 under the Act 19 because it deems 

the Shares to be equity securities, thus 

rendering the Shares subject to the 

Exchange’s existing rules governing the 

trading of equity securities. 

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 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. 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–2006–60 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street NE., 

Washington, DC 20549–1090. All 

submissions should refer to File 

Number SR–NYSEArca–2006–60. 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 inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the principal offices 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––NYSEArca–2006–60 and 


pwalker on PRODPC60 with NOTICES
56208 Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 

20 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

21 15 U.S.C. 78f(b)(5). 

22 15 U.S.C. 78l(f). 

23Section 12(a) of the Act, 15 U.S.C. 78l(a), 

generally prohibits a broker-dealer from trading a 

security on a national securities exchange unless 

the security is registered on that exchange pursuant 

to Section 12 of the Act. Section 12(f) of the Act 

excludes from this restriction trading in any 

security to which an exchange ‘‘extends UTP.’’

When an exchange extends UTP to a security, it 

allows its members to trade the security as if it were 

listed and registered on the exchange even though 

it is not so listed and registered. 

24 17 CFR 240.12f–5. 

25 15 U.S.C. 78k–1(a)(1)(C)(iii). 

26See NYSE Proposal, supra note 4. 

27 15 U.S.C. 78s(b)(2). 

28 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78s(b)(3)(A)(ii). 

3 17 CFR 240.19b–4(f)(2). 

should be submitted on or before 

October 17, 2006. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.20 In particular, the 

Commission finds that the proposed 

rule change is consistent with section 

6(b)(5) of the Act,21 which requires that 

an exchange have rules designed, among 

other things, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and in 

general to protect investors and the 

public interest. 

In addition, the Commission finds 

that proposal is consistent with section 

12(f) of the Act,22 which permits an 

exchange to trade, pursuant to UTP, a 

security that is listed and registered on 

another exchange.23 The Commission 

also finds that the proposal is consistent 

with Rule 12f–5 under the Act,24 which 

provides that an exchange shall not 

extend UTP to a security unless the 

exchange has in effect a rule or rules 

providing for transactions in the class or 

type of security to which the exchange 

extends UTP. NYSEArca rules deem the 

Shares to be equity securities, thus 

trading in the Shares will be subject to 

the Exchange’s existing rules governing 

the trading of equity securities. 

The Commission further believes that 

the proposal is consistent with section 

11A(a)(1)(C)(iii) of the Act,25 which sets 

forth Congress’s finding that it is in the 

public interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for and 

transactions in securities. 

In support of the proposed rule 

change, the Exchange has made the 

following representations: 

1. The Exchange has appropriate rules 

to facilitate transactions in this type of 

security in all trading sessions. 

2. The Exchange’s surveillance 

procedures are adequate to properly 

monitor the trading of the Shares on the 

Exchange. 

3. The Exchange will inform its ETP 

Holders in an Information Bulletin of 

the special characteristics and risks 

associated with trading the Shares. 

4. The Exchange will require its ETP 

Holders to deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction and will 

note this prospectus delivery 

requirement in the Information Bulletin. 

5. The Exchange will cease trading the 

Shares of a Fund if: (a) The listing 

market stops trading the Shares because 

of a regulatory halt similar to a halt 

based on NYSE Arca Equities Rule 7.12 

or a halt because the IOPV or the value 

of the applicable Underlying Index is no 

longer available; or (b) the listing market 

delists the Shares. 

This approval order is conditioned on 

the Exchange’s adherence to these 

representations. 

The Commission finds good cause for 

approving this proposed rule change 

before the thirtieth day after the 

publication of notice thereof in the 

Federal Register. As noted above, the 

Commission previously found that the 

listing and trading of these Shares on 

the NYSE is consistent with the Act.26

The Commission presently is not aware 

of any issue that would cause it to 

revisit that earlier finding or preclude 

the trading of these funds on the 

Exchange pursuant to UTP. Therefore, 

accelerating approval of this proposed 

rule change should benefit investors by 

creating, without undue delay, 

additional competition in the market for 

these Shares. 

V. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act, that the 

proposed rule change (SR–NYSEArca–

2006–60), is hereby approved on an 

accelerated basis.27

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.28

Nancy M. Morris, 

Secretary. 

[FR Doc. 06–8236 Filed 9–25–06; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54464; File No. SR–OCC–

2006–14] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Relating to 

Reduced Discounted Clearing Fees 

September 18, 2006. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

August 15, 2006, The Options Clearing 

Corporation (‘‘OCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by OCC. OCC filed the 

proposed rule change pursuant to 

section 19(b)(3)(A)(ii) of the Act 2 and 

Rule 19b–4(f)(2) thereunder 3 so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change is to reduce 

OCC’s currently discounted clearing 

fees for securities options and security 

futures where at least one side of the 

trade is cleared by an OCC clearing 

member for the period September 1, 

2006, through December 29, 2006. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

OCC 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 these statements 

may be examined at the places specified 

in Item IV below. OCC has prepared 

summaries, set forth in sections (A), (B), 


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