9820 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

9See Footnote 638 to Regulation NMS (Securities 

Exchange Act Release No. 51808; File No. S7–10–

04 (June 9, 2005), 70 FR 37495 (June 29, 2005)). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the Commission believe [sic] that SROs 

and their members also should be free 

to distribute their trades 

independently.’’ 9

The Commission rescinded the 

prohibition in recognition of the fact 

that competition in the realm of SRO 

trade-report distribution would produce 

market forces and innovation that 

would benefit the investing public. By 

means of the pilot program, the 

Exchange would allow internet service 

providers and traditional vendors to test 

the viability of an alternative market 

data fee structure that does not exist 

today and to do so without the burden 

of the reporting, contracting and other 

administrative obligations associated 

with most other market data services. If 

they believe that the proposed fees 

would enable them to make market data 

available in the most cost-effective 

manner for them and their subscribers 

and customers, they will embrace the 

pilot program’s proposed fees. If not, 

they will continue to make consolidated 

last sale prices available pursuant to the 

Network A fees currently in effect under 

the CTA Plan. 

Given that the pilot program proposes 

to provide an alternative to existing fees 

and does not alter or rescind any 

existing fees, the Exchange does not 

believe that the proposed rule change 

will result in 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 

The Exchange has discussed the 

proposed rules change with those 

entities that the Exchange believes 

would be the most likely to take 

advantage of the proposed NYSE RealTime Trade Prices service by becoming 

NYSE–Only Vendors. While those 

entities have not submitted formal, 

written comments on the proposal, the 

Exchange has incorporated some of their 

ideas into the proposal and the 

proposed rule change reflects their 

input. The Exchange has not received 

any unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which the NYSE consents, the 

Commission will: 

A. By order approve such proposed 

rule change; or 

B. institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to 

rule-comments@sec.gov. Please include 

File Number SR–NYSE–2007–04 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–NYSE–2007–04. 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 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 publicly available. All 

submissions should refer to File 

Number SR–NYSE–2007–04 and should 

be submitted on or before March 26, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3750 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55339; File No. SR–

NYSEArca–2007–14] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change to Amend Existing Rules 

for Investment Company Units 

February 23, 2007. 

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 

8, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’

or ‘‘Exchange’’), through its wholly 

owned subsidiary NYSE Arca Equities, 

Inc. (‘‘NYSE Arca Equities’’), 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 substantially prepared by the 

Exchange. The Commission is 

publishing this notice and order to 

solicit comment on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NYSE Arca, proposes to modify its 

listing standards applicable to 

Investment Company Units 

(‘‘Investment Company Units’’ or 

‘‘ICUs’’) by amending Commentary 

.01(b)(1) to NYSE Arca Equities Rule 

5.2(j)(3) to eliminate the requirement 

that the calculation methodology for the 

index underlying a series of ICUs must 

be one of those enumerated in the 

commentary. The text of the proposed 

rule change is available at NYSE Arca, 

the Commission’s Public Reference 

Room, and http://www.nysearca.com/ 

regulation/filings.asp. 


erjones on PRODPC74 with NOTICES
Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9821 

3See Securities Exchange Act Release No. 55240 

(February 5, 2007), 72 FR 06624 (Februrary 12, 

2007). See also SR–NYSE–2007–12 (submitted to 

the Commission). 

4 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 

(July 19, 2001) (SR–PCX–2001–14). 

5 15 U.S.C. 80a. 

6 17 CFR 240.19b–4(e). 

7See Securities Exchange Act Release No. 54490 

(September 22, 2006), 71 FR 58034 (October 2, 

2006) (SR–NYSEArca–2006–61) (approving 

underlying index weightings for: sales, cash flow, 

book value and dividends). 

8See Securities Exchange Act Release No. 54649 

(October 24, 2006); 71 FR 63816 (October 31, 2006) 

(SR–NYSE–2006–88). 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

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 IV 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 

The Exchange proposes to eliminate 

the requirement that the prescribed 

calculation methodology for the index 

underlying a series of ICUs must be one 

of those enumerated in Commentary 

.01(b)(1) of Rule 5.2(j)(3). The proposed 

rule change is based on proposed rule 

changes of both the American Stock 

Exchange and New York Stock 

Exchange.3

The Exchange has adopted listing 

standards applicable to ICUs which are 

consistent with the listing criteria 

currently used by other national 

securities exchanges, and trading 

standards pursuant to which the 

Exchange may either list and trade ICUs 

or trade such ICUs on the Exchange on 

an unlisted trading privileges (‘‘UTP’’) 

basis.4 An Investment Company Unit is 

defined in NYSE Arca Equities Rule 

5.1(b)(15) as 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. A registered investment 

company is registered under the 

Investment Company Act of 1940.5

The ‘‘generic’’ listing criteria of 

Commentary .01 to Rule 5.2(j)(3) 

permits listing or trading pursuant to 

UTP of ICUs that satisfy such criteria in 

reliance upon Rule 19b–4(e) under the 

Act,6 without a separate filing. 

Commentary .01(b)(1) to Rule 5.2(j)(3) 

currently requires that where a series of 

ICUs approved for trading (including 

pursuant to UTP) on the Exchange in 

reliance upon Rule 19b–4(e) of the Act, 

the index underlying the series of ICUs 

must be calculated based on either the 

market capitalization, modified market 

capitalization, price, equal-dollar or 

modified equal-dollar weighting 

methodology or a methodology 

weighting components of the index 

based on any, some or all of the 

following: Sales, cash flow, book value, 

and dividends.7

The Exchange proposes to delete 

Commentary .01(b)(1) to Rule 5.2(j)(3) 

and thereby eliminate the calculation 

methodology limitation. 

In recent years, academics and market 

professionals have explored and defined 

a growing list of innovations in index 

construction. Most recently, the 

Commission approved amendments to 

the generic listing criteria to 

accommodate new index weighting 

methodologies based on ranking 

companies by financial data such as 

sales, cash flow, book value and 

dividends.8 The Exchange believes there 

are multiple ways for indexes to be 

constructed to serve useful market 

purposes. Additional methodologies are 

under active development by academics 

and market professionals and permitting 

only certain specified index weighting 

methods does not take into account the 

rapid innovation in this area. The 

Exchange believes that, with respect to 

ICUs listed pursuant to Rule 19b–4(e) 

under the Act, applying the numerical 

weighting and liquidity criteria and 

index dissemination requirements set 

forth in the remainder of Commentary 

.01 to Rule 5.2(j)(3), without imposing 

constraints on the index methodology, 

will provide greater flexibility to 

indexers and ICU issuers to develop 

indexes that meet the investment 

objectives of investors. In addition, the 

proposed rule change would allow ICUs 

based on a non-traditional weighting 

methodology to be brought to market 

more quickly, thereby reducing burdens 

on ICU issuers and other market 

participants and promoting competition. 

The Exchange notes that the 

numerical criteria in Commentary .01 

already define the concentration limits, 

diversity requirements and liquidity 

requirements of the companies in the 

underlying index. For example, the 

generic listing standards for domestic 

indexes require, among other things, 

that an index include at least 13 stocks, 

that the most heavily weighted 

component stock of an index cannot 

exceed 30% of the index or portfolio 

weight, and the five most heavily 

weighted component stocks of an index 

cannot exceed 65% of the index or 

portfolio weight. ICUs and their 

underlying indexes would continue to 

be subject to all other requirements of 

Rule 5.2(j)(3) and Commentary .01. 

Under these circumstances, the 

Exchange believes that removal of the 

index weighting requirements of 

Commentary .01(b)(1) will not 

compromise investor protection. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 9 of the Act, 

in general, and furthers the objectives of 

Section 6(b)(5) 10 in particular in that it 

is designed to prevent fraudulent and 

manipulative acts and practices, 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 to and 

perfect the mechanisms of a free and 

open market and a national market 

system. 

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. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 


erjones on PRODPC74 with NOTICES
9822 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

11 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)(6). 

5See Securities Exchange Act Release No. 54549 

(September 29, 2006), 71 FR 59179 (October 6, 

2006) (SR–NYSEArca–2006–59). 

6See Securities Exchange Act Release No. 55160 

(January 24, 2007), 72 FR 4202 (January 30, 2007). 

7See supra note 5. 

8See supra note 6. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the proposed 

modifications, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The Exchange has requested 

accelerated approval of this proposed 

rule change. The Commission has 

determined that a 15-day comment 

period is appropriate in this case. 

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 rulescomments@sec.gov. Please include File 

No. SR–NYSEArca–2007–14 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. 

All submissions should refer to File No. 

SR–NYSEArca–2007–14. 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 No. 

SR–NYSEArca–2007–14 and should be 

submitted on or before March 20, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3739 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55340; File No. SR–

NYSEArca–2007–18] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Clarifying the Operative 

Date of Rules Relating to Regulation 

NMS 

February 23, 2007. 

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 

22, 2007, the NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by NYSE Arca. 

The Exchange has filed the proposal as 

a ‘‘non-controversial’’ rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders it 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 

NYSE Arca proposes to clarify the 

operative date of the rule changes made 

in connection with Regulation NMS,5

from February 4, 2007 to March 5, 

2007.6 There is no new rule text. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NYSE Arca 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. NYSE 

Arca 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 

The proposed rule change clarifies the 

operative date of the rule changes made 

in connection with Regulation NMS 7

from February 4, 2007 to March 5, 2007. 

This clarification stems in part from the 

Commission’s extension of the Trading 

Phase Date of Regulation NMS to March 

5, 2007.8

2. Statutory Basis 

NYSE Arca believes the proposed rule 

change is consistent with Section 6(b) of 

the Act,9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,10

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, 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 to and perfect the 

mechanism of a free and open market 

and a national market system. 

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 either 

solicited or received. 


erjones on PRODPC74 with NOTICES