Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9799 

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

2 17 CFR 240.19b–4. 

3Amendment No. 2 superceded the original filing 

and Amendment No. 1. 

4Securities Exchange Act Release No. 55268 

(February 9, 2007), 72 FR 7793 (February 20, 2007) 

(SR–NYSE–2007–03) (approving listing and trading 

of Japanese Yen Shares); Securities Exchange Act 

Release No. 52843 (November 28, 2005), 70 FR 

72486 (December 5, 2005) (SR–NYSE–2005–65) 

(approving listing and trading of Euro Shares); 

Securities Exchange Act Release No. 54020 (June 

20, 2006), 71 FR 36579 (June 27, 2006) (SR–NYSE–

2006–35) (approving listing and trading of the six 

additional CurrencyShares Trusts). 

5On November 16, 2006, the Commission 

approved a rule filing by Nasdaq to adopt Rule 

4630, a new rule governing the trading of and 

surveillance procedures applicable to CommodityBased Trust Shares. See Securities Exchange Act 

Release No. 54765 (November 16, 2006), 71 FR 

67668 (November 22, 2006) (SR–NASDAQ–2006–

009). Because foreign currency is included within 

the rule’s definition of a commodity, Rule 4630 is 

applicable to Currency Trust Shares. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55344; File No. SR–

NASDAQ–2006–057] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Order Granting Accelerated 

Approval of Proposed Rule Change as 

Modified by Amendment No. 2 Thereto 

To Trade Certain CurrencyShares 

Trusts Pursuant to Unlisted Trading 

Privileges 

February 23, 2007. 

Pursuant to Section l9(b)(1) of the 

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

12, 2006, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) 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 Nasdaq. On 

January 29, 2007, Nasdaq filed 

Amendment No. 1 to the proposed rule 

change. On February 16, 2007, Nasdaq 

filed Amendment No. 2 to the proposed 

rule change.3 This order provides notice 

of the proposed rule change, as 

amended, and approves the proposal on 

an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

Nasdaq seeks to continue trading 

pursuant to unlisted trading privileges 

(‘‘UTP’’) certain securities whose value 

is linked to the value of one or more 

non-U.S. currencies (‘‘Currency Trust 

Shares’’). The securities consist of 

shares (‘‘Shares’’) in the following 

currency trusts (‘‘Trusts’’): 

• CurrencySharesTM Australian 

Dollar Trust, which issues Australian 

Dollar Shares; 

• CurrencySharesTM British Pound 

Sterling Trust, which issues British 

Pound Sterling Shares; 

• CurrencySharesTM Canadian Dollar 

Trust, which issues Canadian Dollar 

Shares; 

• CurrencySharesTM Euro Trust, 

which issues Euro Shares; 

• CurrencySharesTM Japanese Yen 

Trust, which issues Japanese Yen 

Shares; 

• CurrencySharesTM Mexican Peso 

Trust, which issues Mexican Peso 

Shares; 

• CurrencySharesTM Swedish Krona 

Trust, which issues Swedish Krona 

Shares; and 

• CurrencySharesTM Swiss Franc 

Trust, which issues Swiss Franc Shares. 

The text of the proposed rule change 

is available on Nasdaq’s Web site at 

http://nasdaq.complinet.com, at 

Nasdaq’s principal office, 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, 

Nasdaq 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. Nasdaq 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 

Nasdaq is proposing to trade the 

Shares on a UTP basis. Nasdaq is 

submitting this filing because its current 

listing standards do not extend to 

Currency Trust Shares. However, 

systems operated by Nasdaq and its 

affiliates currently trade the Shares on 

an over-the-counter basis as facilities of 

NASD. The filing will allow Nasdaq to 

continue trading the Shares as an 

exchange. 

The Commission previously approved 

the original listing and trading of the 

Shares on the New York Stock Exchange 

(‘‘NYSE’’).4

The Australian Dollar Shares 

represent units of fractional undivided 

beneficial interest in and ownership of 

the Australian Dollar Trust. The 

investment objective of the Australian 

Dollar Trust is for the Australian Dollar 

Shares to reflect the price of the 

Australian dollar. 

The British Pound Sterling Shares 

represent units of fractional undivided 

beneficial interest in and ownership of 

the British Pound Sterling Trust. The 

investment objective of the British 

Pound Sterling Trust is for the British 

Pound Sterling Shares to reflect the 

price of the British pound. 

The Canadian Dollar Shares represent 

units of fractional undivided beneficial 

interest in and ownership of the 

Canadian Dollar Trust. The investment 

objective of the Canadian Dollar Trust is 

for the Canadian Dollar Shares to reflect 

the price of the Canadian dollar. 

The Euro Shares represent units of 

fractional undivided beneficial interest 

in and ownership of the Euro Trust. The 

investment objective of the Euro Trust is 

for the Euro Shares to reflect the price 

of the euro. 

The Japanese Yen Shares represent 

units of fractional undivided beneficial 

interest in and ownership of the 

Japanese Yen Trust. The investment 

objective of the Japanese Yen Trust is 

for the Japanese Yen Shares to reflect 

the price of the Japanese yen. 

The Mexican Peso Shares represent 

units of fractional undivided beneficial 

interest in and ownership of the 

Mexican Peso Trust. The investment 

objective of the Mexican Peso Trust is 

for the Mexican Peso Shares to reflect 

the price of the Mexican peso. 

The Swedish Krona Shares represent 

units of fractional undivided beneficial 

interest in and ownership of the 

Swedish Krona Trust. The investment 

objective of the Swedish Krona Trust is 

for the Swedish Krona Shares to reflect 

the price of the Swedish krona. 

The Swiss Franc Shares represent 

units of fractional undivided beneficial 

interest in and ownership of the Swiss 

Franc Trust. The investment objective of 

the Swiss Franc Trust is for the Swiss 

Franc Shares to reflect the price of the 

Swiss franc. 

The Trusts are not registered 

investment companies under the 

Investment Company Act of 1940. 

Nasdaq deems the Shares to be equity 

securities, thus rendering trading in the 

Shares subject to Nasdaq’s existing rules 

governing the trading of equity 

securities, including Nasdaq Rule 4630.5

The primary trading hours for the 

Shares on Nasdaq would be 9:30 a.m. to 

4:15 p.m. (EST). The Shares may also be 

traded in a pre-market session from 7 

a.m. to 9:30 a.m. (EST) and a postVerDate Aug<31>2005 15:17 Mar 02, 2007 Jkt 211001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\05MRN1.SGM 05MRN1

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9800 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

6The IIV of the Shares is analogous to the 

intraday optimized portfolio value (sometimes 

referred to as the IOPV), indicative portfolio value, 

or IIV associated with the trading of exchangetraded funds. 

7The Trusts’ Web site’s foreign currency spot 

price is provided by FactSet Research Systems 

(http://www.factset.com). Nasdaq would provide a 

link to the Trusts’ Web site. The NYSE has stated 

that FactSet Research Systems is not affiliated with 

the Trusts, their Trustee, their sponsor, other 

entities involved in distributing or holding deposits 

associated with the Trusts, or the NYSE. In the 

event that the Trusts’ Web site should cease to 

provide currency spot price information from an 

unaffiliated source and the IIV of the Shares, NYSE 

has stated that it would halt trading in the Shares 

and commence delisting proceedings for the Shares. 

Nasdaq would also halt trading in the Shares in the 

event that NYSE halts trading because the spot 

price and/or IIV is no longer available, or if NYSE 

delists the Shares for other reasons. 

8See Securities Exchange Act Release No. 55269 

(February 9, 2007), 72 FR 7490 (February 15, 2007) 

(SR–NASDAQ–2006–050). 

9Surveillance of all trading on NASD facilities 

operated by Nasdaq, including the trading of 

Shares, is currently being conducted by NASD. 

When Nasdaq begins to trade the Shares as an 

exchange, NASD will surveil trading pursuant to a 

regulatory services agreement. Nasdaq is 

responsible for NASD’s performance under this 

regulatory services agreement. 

10 15 U.S.C. 78f. 

11 15 U.S.C. 78f(b)(5). 

12 17 CFR 240.12f–5. 

market session from 4:15 p.m. to 8 p.m. 

(EST). 

Quotations for and last sale 

information regarding the Shares is 

disseminated through the Consolidated 

Tape System. The net asset value 

(‘‘NAV’’) and NAV per Share for each 

Trust are calculated by The Bank of 

New York as the Trustee for each Trust. 

To calculate the NAV, the Trustee adds 

the total value of Trust assets, including 

accrued receivables, and then subtracts 

Trust liabilities, including accrued 

expenses. The Trustee determines the 

NAV per Share by dividing the NAV of 

a Trust by the number of outstanding 

Shares. The NAV per Share is published 

on the Trusts’ Web site at http:// 

www.currencyshares.com (to which 

Nasdaq would provide a link from its 

http://www.nasdaq.com Web site). The 

Trusts’ Web site is publicly accessible at 

no charge and also contains the spot 

price for each applicable foreign 

currency, including the bid and offer 

and the midpoint between the bid and 

offer for the foreign currency spot price, 

updated at least every 15 seconds; an 

intraday indicative value (‘‘IIV’’) 6 per 

Share calculated by multiplying the 

indicative spot price of the currency by 

the quantity of the currency backing 

each Share, at least every 15 seconds, 

and for certain Shares on a five-to tensecond delayed basis; and other 

pertinent information about the value of 

a Share.7

Nasdaq would halt trading in the 

Shares of a Trust under the conditions 

specified in Nasdaq Rules 4120 and 

4121. The conditions for a halt include 

a regulatory halt by the listing market. 

UTP trading in the Shares also would be 

governed by provisions of Nasdaq Rule 

4120 relating to temporary interruptions 

in the calculation or wide dissemination 

of the IIV.8

Nasdaq believes that its surveillance 

procedures are adequate to address any 

concerns about the trading of the Shares 

on Nasdaq. Trading of the Shares 

through NASD facilities operated by 

Nasdaq is currently subject to NASD’s 

surveillance procedures for equity 

securities in general and ETFs in 

particular. After Nasdaq begins to trade 

the Shares as an exchange, NASD, on 

behalf of Nasdaq, will continue to 

surveil Nasdaq’s trading of the Shares. 

Nasdaq’s transition to trading the Shares 

as an exchange will not result in any 

change in the surveillance process with 

respect to the Shares.9

In connection with trading the Shares 

as an exchange, Nasdaq will issue an 

information circular (‘‘Circular’’) that 

will discuss the following: (1) The 

special characteristics and risks of 

trading the Shares; (2) the procedures 

for purchases and redemptions of 

Shares; (3) applicable Nasdaq rules 

including suitability rules; (4) how 

information regarding the IIV is 

disseminated; and (5) trading 

information. The Circular will also refer 

members to language in the Registration 

Statements regarding prospectus 

delivery requirements for the Shares, 

and note to members their obligations 

regarding prospectus delivery. Nasdaq 

notes that investors purchasing Shares 

directly from the Trusts will receive a 

prospectus. Nasdaq members 

purchasing Shares from the Trusts for 

resale to investors will deliver a 

prospectus to such investors. 

In addition, the Circular will 

reference that the Trusts are subject to 

various fees and expenses described in 

the Registration Statements. The 

Circular will explain that if the Trusts 

are required to sell currency to pay the 

Trusts’ expenses, the amount of foreign 

currency required to create a basket of 

Shares issued by the Trusts or to be 

delivered upon a redemption of a basket 

of Shares may gradually decrease over 

time. If this is done when the price of 

the currency is relatively low, the 

selling of the currency could adversely 

affect the value of the Shares. Finally, 

the Circular will also reference the fact 

that there is no regulated source of lastsale information regarding currency and 

that the Commission has no jurisdiction 

over the trading of currency. 

2. Statutory Basis 

Nasdaq believes that the proposal is 

consistent with the provisions of 

Section 6 of the Act,10 in general, and 

with Section 6(b)(5) of the Act,11 in 

particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

In addition, Nasdaq believes that the 

proposal is consistent with Rule 12f–5 

under the Act 12 because it deems the 

Shares to be equity securities, thus 

rendering trading in the Shares subject 

to Nasdaq’s rules governing the trading 

of equity securities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change would 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 proposal 

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–NASDAQ–2006–057 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–NASDAQ–2006–057. This 

file number should be included on the 

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

Commission process and review your 


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13 In approving this rule change, the Commission 

notes that it has considered the proposal’s impact 

on efficiency, competition, and capital formation. 

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

14 15 U.S.C. 78f(b)(5). 

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

16Section 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. 

17See supra note 4. 

18 17 CFR 240.12f–5. 

19 15 U.S.C. 78k–1(a)(1)(C)(iii). 

20 15 U.S.C. 78s(b)(2). 

21 17 CFR 200.30–3(a)(12). 

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 Nasdaq. 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–NASDAQ–2006–057 and 

should be submitted on or before March 

26, 2007. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful review, the Commission 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.13 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,14 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,15 which permits 

an exchange to trade, pursuant to UTP, 

a security that is listed and registered on 

another exchange.16 The Commission 

notes that it previously approved the 

listing and trading of the Shares on 

NYSE.17 The Commission also finds that 

the proposal is consistent with Rule 

12f–5 under the Act,18 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. Nasdaq 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 Nasdaq’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,19 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 are disseminated through the 

facilities of the Consolidated Tape 

Association. Furthermore, the Trusts’

Web site, which is publicly accessible at 

no charge, provides the IIV at least every 

15 seconds, and for certain Shares on a 

five-second to ten-second delayed basis, 

throughout Nasdaq’s trading sessions. In 

addition, Nasdaq has represented that, if 

the listing market halts trading when the 

IIV is not being calculated or 

disseminated, Nasdaq would halt 

trading in the Shares. Nasdaq would 

follow the procedures with respect to 

trading halts set forth in Nasdaq Rules 

4120 and 4122. 

The Commission notes that, if the 

Shares should be delisted by the listing 

exchange, the Nasdaq would no longer 

have authority to trade the Shares 

pursuant to this order. 

In support of this proposal, the 

Nasdaq has made the following 

representations: 

1. Nasdaq’s surveillance procedures 

are adequate to address any concerns 

about the trading of the Shares on 

Nasdaq. 

2. Nasdaq will issue an information 

circular that will discuss the special 

characteristics and risks of trading the 

Shares, the procedures for the purchases 

and redemptions of the Shares, 

applicable Nasdaq rules including 

suitability rules, how information 

regarding the IIV is disseminated, and 

trading information. 

3. In connection with trading the 

Shares as an exchange, Nasdaq will 

issue an information circular that will 

refer members to the language in the 

Registration Statements regarding 

prospectus delivery requirements for the 

Shares and will also note to Nasdaq 

members their obligations regarding 

prospectus delivery. Investors 

purchasing Shares directly from the 

Trusts will receive a prospectus. In 

addition, Nasdaq members purchasing 

Shares from the Trust for resale to 

investors will deliver a prospectus to 

such investors. 

This approval order is conditioned on 

the Nasdaq’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 previously, the Commission 

previously found that the listing and 

trading of the Shares on NYSE is 

consistent with the Act. The 

Commission presently is not aware of 

any regulatory issue that should cause it 

to revisit that finding or would preclude 

the trading of the Shares on Nasdaq 

pursuant to UTP. Therefore, accelerating 

approval of this proposal should benefit 

investors by creating, without undue 

delay, additional competition in the 

market for the Shares. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,20 that the 

proposed rule change (SR–NASDAQ–

2006–057), as amended, be and it 

hereby is, approved on an accelerated 

basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3742 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 


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