Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices 10283 

14 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). 

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

16 15 U.S.C. 78l(f). 

17Section 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. 

18See supra note 3 and Securities Exchange Act 

Release No. 51067 (January 21, 2005), 70 FR 3952 

(January 27, 2005) (SR–PCX–2004–132). 

19 17 CFR 240.12f–5. 

20 15 U.S.C. 78k–1(a)(1)(C)(iii). 

21 15 U.S.C. 78s(b)(2). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

securities exchange.14 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,15 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. The Commission 

believes that this proposal should 

benefit investors by increasing 

competition among markets that trade 

the Shares. 

In addition, the Commission finds 

that the proposal is consistent with 

Section 12(f) of the Act,16 which permits 

an exchange to trade, pursuant to UTP, 

a security that is listed and registered on 

another exchange.17 The Commission 

notes that it previously approved the 

listing and trading of the Shares on 

Amex and NYSE Arca, Inc.18 The 

Commission also finds that the proposal 

is consistent with Rule 12f–5 under the 

Act,19 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. The Exchange 

has represented that it meets this 

requirement because it 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. 

The Commission further believes that 

the proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Act,20 which sets 

forth Congress’ 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. Quotations for 

and last sale information regarding the 

Shares is disseminated through the 

Consolidated Tape System. The 

Commission notes that there is a 

considerable amount of gold price and 

gold market information available 24 

hours per day on public Web sites and 

through professional and subscription 

services, and the Exchange will link to 

the Amex and Trust Web sites, which 

provide trading information about the 

Shares. Furthermore, Amex 

disseminates the Indicative Trust Value 

on a per-Share basis every 15 seconds 

through the facilities of the CTA during 

regular Amex trading hours of 9:30 a.m. 

to 4:15 p.m. ET (except between 1:30 

p.m. and 2 p.m., the time from the close 

of regular trading of the COMEX gold 

futures contract and the start of trading 

of COMEX gold futures contracts on 

NYMEX ACCESS). The Commission 

also notes that the Trust’s Web site is 

publicly accessible at no charge and will 

contain the NAV of the Shares and the 

Basket Gold Amount as of the prior 

business day, the Bid-Ask Price, and a 

calculation of the premium or discount 

of the Bid-Ask Price in relation to the 

closing NAV. Additionally, the Trust’s 

Web site will also provide data in chart 

form displaying the frequency 

distribution of discounts and premiums 

of the Bid-Ask Price against the NAV, 

within appropriate ranges for each of 

the four previous calendar quarters; the 

Prospectus; and other applicable 

quantitative information. If Amex halts 

trading in the Shares, or the Indicative 

Trust Value or the value of the 

underlying COMEX gold futures 

contract is not being calculated or 

disseminated, the Exchange would halt 

trading in the Shares. 

The Commission notes that, if the 

Shares should be delisted by the listing 

exchange, the Exchange would no 

longer have authority to trade the Shares 

pursuant to this order. 

In support of this proposal, the 

Exchange has made the following 

representations: 

(1) The Exchange’s surveillance 

procedures are adequate to address any 

concerns associated with the trading of 

the Shares on a UTP basis. 

(2) The Exchange would inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares, 

including suitability recommendation 

requirements. 

(3) The Exchange would require its 

members to deliver a prospectus or 

product description to investors 

purchasing Shares prior to or 

concurrently with a transaction in such 

Shares and will note this prospectus 

delivery requirement in the Information 

Circular. 

This approval order is conditioned on 

the Exchange’s adherence to these 

representations. 

The Commission finds good cause for 

approving this proposal 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 the Shares on Amex and 

NYSE Arca is consistent with the Act. 

The Commission presently is not aware 

of any regulatory issue that should 

cause it to revisit those findings or 

would preclude the trading of the 

Shares on the Exchange pursuant to 

UTP. Furthermore, accelerated approval 

of this proposal will facilitate Nasdaq’s 

ability to continue trading these 

securities as Nasdaq becomes an 

exchange with respect to non-Nasdaqlisted securities, where there appears to 

be no regulatory concerns about such 

trading. Therefore, accelerating approval 

of this proposal should benefit investors 

by creating, without undue delay, 

additional competition in the market for 

such Shares. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,21 that the 

proposed rule change (SR–NASDAQ–

2007–014), be, and it hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4038 Filed 3–6–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55379; File No. SR–NASD–

2007–017] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Amend the Alternative 

Display Facility Quotation Update Fee 

March 1, 2007. 

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

Securities Exchange Act of 1934 

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


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3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 15 U.S.C. 78o–3(b)(5). 

notice is hereby given that on February 

27, 2007, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’) 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 NASD. 

NASD has filed the proposal as a ‘‘noncontroversial’’ 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 

NASD proposes to amend Rule 7010A 

in light of the current participant 

quoting and trading activity on the 

Alternative Display Facility (‘‘ADF’’). 

Below is the text of the proposed rule 

change. Proposed new language is 

italicized and proposed deletions are in 

[brackets]. 

7010A. System Services 

(a) No Change. 

(b) Quotation Updates 

The following quotation update 

charges will apply based on the average 

daily number of publicly disseminated 

trades reported to the media through the 

ADF during the billing period. A 

‘‘quotation update’’ includes any change 

to the price or size of a displayed 

quotation. 

Average trades reported through the ADF per 

day Quotation update charge Quotes updates provided at no charge 

Less than 1 ........................................................ $.02 per quotation update ................................ None. 

Between 1 and 100,000 .................................... $.01 per quotation update ................................ 5 quotation updates per trade. 

Between 100,001 and [150,000] 125,000 ......... $[.01].005 per quotation update ....................... [10]20 quotation updates per trade. 

Between 125,001 and 150,000 ......................... $.005 per quotation update .............................. 25 quotation updates per trade. 

Greater than 150,000 ........................................ No Charge ........................................................ N/A. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASD 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. NASD 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 current ADF pricing structure 

imposes a quote fee of $0.01 per quote 

for any ADF participant that has a daily 

average of 150,000 or fewer trade reports 

and no quote fee for daily average trade 

reports over that activity level. It also 

offers three tiers of free quotes. 

Specifically, participants that generate 

between one and 100,000 trade prints 

per day receive five free quotes per trade 

print, participants that generate between 

100,001 and 150,000 trade prints per 

day receive ten free quotes per trade 

print, and those participants that 

generate over 150,000 trade prints are 

not charged for quotation updates. This 

pricing structure was designed in part to 

address the typical electronic 

communications network (‘‘ECN’’) 

business model at the time, given that 

ECNs were the only ADF participants. 

NASD has seen an increase in the 

quote-to-trade ratios experienced by 

certain ECNs and believes the impact of 

Regulation NMS could potentially 

increase them even further. Thus, NASD 

proposes to amend the ADF quote 

update pricing structure to address 

these changes. Specifically, the new 

pricing structure would continue to 

require participants with high quote-totrade ratios to pay for a portion of their 

quote activity, but at a reduced rate and 

with the benefit of additional free quote 

updates. The new pricing system 

introduces five pricing tiers. 

Participants that do not submit a single 

trade report to NASD are not entitled to 

receive any free quotes. Participants that 

generate between one and 100,000 trade 

prints per day receive five free quotes 

per trade print, participants that 

generate between 100,001 and 125,000 

trade prints per day receive 20 free 

quotes per trade print, participants that 

generate between 125,001 and 150,000 

trade prints per day receive 25 free 

quotes per trade print, and those 

participants that generate over 150,000 

trade prints are not charged for 

quotation updates. 

NASD has filed the proposed rule 

change for immediate effectiveness. 

This proposed rule change would be 

operational as of February 1, 2007, and 

would therefore apply to February’s 

quotation and trading activity. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(5) of the Act,5 which 

requires, among other things, that NASD 

rules provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among members and 

issuers and other persons using any 

facility or system that NASD operates or 

controls. NASD believes that the 

proposed rule change would more 

equitably set the level of charges being 

imposed upon ADF participants in light 

of changing market practices. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD 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 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule change 

does not: (1) Significantly affect the 

protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for 30 days from the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 


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Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices 10285 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission written 

notice of its intent to file the proposed rule change, 

along with a brief description and text of 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 Commission has decided to waive 

the five-day pre-filing requirement. 

8For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

9 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). 

5NYSE Arca Equities Rules 5.1(b)(13), 5.2(j)(3), 

8.100, 8.200, 8.201, 8.202, 8.203, 8.300, and 8.400 

Continued 

19(b)(3)(A) of the Act 6 and Rule 19b–

4(f)(6) thereunder.7

NASD has requested that the 

Commission waive the 30-day operative 

delay in this case. The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will allow 

the benefits of this new pricing structure 

to apply immediately. For this reason, 

the Commission designates the 

proposed rule change to be operative 

upon filing with the Commission.8

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. 

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–NASD–2007–017 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 

Number SR–NASD–2007–017. 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 the filing also will be 

available for inspection and copying at 

the principal office of NASD. 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–NASD–2007–017 and 

should be submitted on or before March 

28, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3952 Filed 3–6–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55374; File No. SR–

NYSEArca–2007–20] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to NYSE Arca 

Marketplace Trading Sessions 

February 28, 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 

26, 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 and II below, which Items have 

been substantially prepared by the 

Exchange. The Exchange filed the 

proposal pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes, through 

NYSE Arca Equities, to update the list 

in NYSE Arca Equities Rule 7.34 of 

securities eligible to trade in one or 

more, but not all three, of the 

Exchange’s trading sessions. The 

Exchange proposes to add to the list 

shares of certain Funds (‘‘Shares’’) that 

are traded on NYSE Arca, L.L.C. (‘‘NYSE 

Arca Marketplace’’), the equities trading 

facility of NYSE Arca Equities, pursuant 

to unlisted trading privileges (‘‘UTP’’). 

The text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.nysearca.com), at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

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. 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 

NYSE Arca Equities Rule 7.34 

currently provides, in part, that the 

NYSE Arca Marketplace shall have three 

trading sessions each day: an Opening 

Session (1 a.m. Pacific Time (‘‘PT’’) to 

6:30 a.m. PT), a Core Trading Session 

(6:30 a.m. PT to 1 p.m. PT) and a Late 

Trading Session (1 p.m. PT to 5 p.m. 

PT), and that the Core Trading Session 

for securities described in NYSE Arca 

Equities Rules 5.1(b)(13), 5.1(b)(18), 

5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 

8.203, 8.300, and 8.400 (each, a 

‘‘Derivative Securities Product’’) shall 

conclude at 1:15 pm PT.5


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