9814 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

12Telephone conversation between Kathryn 

Moore, Assistant General Counsel, NASD, and 

Commission staff on February 26, 2007. 

13 15 U.S.C. 78o–3(b)(5). 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(2). 16See 15 U.S.C. 78s(b)(3)(C). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Accordingly, NASD proposes to 

amend Section 7 of Schedule A to the 

NASD By-Laws expressly to require that 

offering documents that are required to 

be filed with NASD relating to an 

automatically effective shelf registration 

statement by a WKSI (which would 

currently include all WKSIs not 

otherwise exempt from Rule 2710 and, 

if SR–NASD–2004–022 is approved by 

the Commission, would only include 

WKSIs that are broker-dealers or 

affiliates of broker-dealers) 12 must be 

accompanied by a $75,500 fee. 

NASD has filed the proposed rule 

change for immediate effectiveness. The 

implementation date will be February 

26, 2007. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with Section 

15A(b)(5) 13 of the Act, which requires 

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, which specifies 

the filing fee required for shelf offerings 

by WKSIs where no proposed maximum 

aggregate offering or other applicable 

value of all securities registered is 

required to be stated, is necessary to 

ensure the appropriate review of 

offerings by WKSIs under NASD rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD 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 NASD 

has neither solicited nor received 

comments on the proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 14 and subparagraph (f)(2) of 

Rule 19b–4 thereunder 15 in that it 

establishes or changes a due, fee, or 

other charge imposed by NASD. 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 

ct.16

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–2007–006 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–2007–006. 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 offices 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–2007–006 and 

should be submitted on or before March 

26, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3762 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55343; File No. SR–NYSE–

2007–12] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change and 

Amendment No. 1 Thereto To Amend 

Section 703.16 of the NYSE Listed 

Company Manual To Eliminate 

Requirement Regarding Index 

Calculation Methodology 

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 

5, 2007 the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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. On February 15, 2007, the 

Exchange filed Amendment No. 1 to the 

proposed rule change. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Section 703.16 of the NYSE Listed 

Company Manual (‘‘Manual’’), the 

Exchange’s generic listing standard for 

investment company units (‘‘ICUs’’), to 

eliminate the requirement that the 

calculation methodology for the index 

underlying a series of ICUs must be one 

of those enumerated in Section 

703.16(C)(4)(a). The proposed rule text 

is available at the NYSE, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 


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Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9815 

3 In 1996, the Commission approved Section 

703.16 of the Listed Company Manual, which sets 

forth the rules related to the listing of ICUs. See 

Securities Exchange Act Release No. 36923 (March 

5, 1996), 61 FR 10410 (March 13, 1996) (SR–NYSE–

95–23). In 2000, the Commission also approved the 

Exchange’s generic listing standards for listing and 

trading, or the trading pursuant to UTP, of ICUs 

under Section 703.16 of the Listed Company 

Manual and Exchange Rule 1100. See Securities 

Exchange Act Release No. 43679 (December 5, 

2000), 65 FR 77949 (December 13, 2000) (SR–

NYSE–2000–46). 

4 15 U.S.C. 80a. 

5 17 CFR 240.19b–4(e). 

6The Exchange also proposes to redesignate 

current subparagraphs (b) and (c) of Section 

703.16(C)(4) as (a) and (b), respectively. 7See Securities Exchange Act Release No. 54649 

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

(SR–NYSE–2006–88). 

8 15 U.S.C. 78f(b). 

9 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. The text of 

these statements may be examined at 

the places specified in Item IV below. 

The NYSE 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 amend 

Section 703.16 of the Manual, which 

includes the Exchange’s generic listing 

standard for ICUs (which include 

exchange-traded funds), to eliminate the 

requirement that the calculation 

methodology for the index underlying a 

series of ICUs must be one of those 

enumerated in section 703.16(C)(4)(a). 

This Amendment No. 1 replaces the 

Exchange’s initial filing in its entirety. 

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.3 An ICU is defined in Section 

703.16 of the Manual as a security that 

represents 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 1940.4

The ‘‘generic’’ listing criteria of 

Section 703.16 of the Manual permit 

listing of ICUs that satisfy such criteria 

in reliance upon Rule 19b–4(e) under 

the Act,5 without a filing pursuant to 

Rule 19b–4 under the Act. Section 

703.16(C)(4)(a) of the Manual requires, 

among other criteria, that, if a series of 

ICUs is listed for trading on the 

Exchange in reliance upon Rule 19b–

4(e), the index underlying the series 

must follow one of these calculation 

weighting methodologies: 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. 

The Exchange proposes to delete 

Section 703.16(C)(4)(a) and thereby 

eliminate the calculation methodology 

limitation.6 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.7 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), 

applying the numerical weighting and 

liquidity criteria and index 

dissemination requirements in Section 

703.16, 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 nontraditional 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 Section 703.16 

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 weight and the 

five most heavily weighted component 

stocks of an index cannot exceed 65% 

of the index weight. The generic listing 

standards for international or global 

indexes require, among other things, 

that the index include at least 20 

component stocks, that the most heavily 

weighted index component stock cannot 

exceed 25% of the index weight, and 

the five most heavily weighted 

component stocks cannot exceed 60% of 

the index weight. ICUs and their 

underlying indexes would continue to 

be subject to all other requirements of 

Section 703.16 of the Manual. Under 

these circumstances, the Exchange 

believes that removal of the index 

weighting requirements of Section 

703.16(C)(4)(a) will not compromise 

investor protection. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 8 of the Act 

in general and furthers the objectives of 

Section 6(b)(5) 9 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, and 

perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest. 

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 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

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 self-regulatory 


erjones on PRODPC74 with NOTICES
9816 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

10 17 CFR 200.30–3(a)(12). 

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

2 217 CFR 240.19b–4. 

3Securities Exchange Act Release No. 54998 

(December 21, 2006), 71 FR 78496 (December 29, 

2006) (SR–NYSE–2006–98). 

organization consents, the Commission 

will: 

(A) by order approve the proposed 

rule change, 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, as amended, 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSE–2007–12 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–NYSE–2007–12. 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 will also be 

available for inspection and copying at 

the principal office of the NYSE. 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–NYSE–2007–12 and should be 

submitted by March 20, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3741 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55345; File No. SR–NYSE–

2007–15] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of a Proposed Rule Change 

Regarding the Amendment of NYSE 

Rule 300 Relating to Trading Licenses 

February 26, 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 

13, 2007, the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 

NYSE. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE rule 300 relating to trading 

licenses to charge a premium of $5,000, 

for a total annualized rate of $55,000 for 

those trading licenses purchased after 

the annual application period. 

The text of the proposed rule change 

is available on NYSE’s Web site at 

http://www.nyse.com/regulation/rules/ 

1160561784294.html, at NYSE’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, the 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

proposal. 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 amend 

NYSE rule 300 relating to trading 

licenses to charge a premium for those 

trading license purchased after the 

annual application period. The 

premium would be $5,000 or 10% above 

the fixed price of $50,000 per trading 

license, pro-rated to reflect the amount 

of time remaining in the year at the time 

of the commencement of the license. 

The Exchange believes that there are 

benefits to itself and to its member 

organizations in having a more stable 

trading license population during the 

course of the calendar year. 

The Exchange previously required 

payment of a premium to encourage 

participation in a ‘‘Dutch’’ auction, but 

recently eliminated this requirement in 

connection with its transition away 

from the use of an auction to set the 

price of a trading license.3 The 

Exchange believes, however, that the 

requirement of a 10% premium should 

be reinstated. The Exchange believes 

that the 10% premium for licenses 

purchased after the annual application 

period provides the Exchange with 

greater predictability regarding the 

number of trading licenses outstanding 

during each calendar year. The 

Exchange represents that this 

predictability not only facilitates 

business planning and administration 

by member organizations and the 

Exchange, but also reduces both 

business and regulatory systems 

changes required to reflect fluctuations 

in trading licenses issued. The Exchange 

believes that the premium encouraged 

member organizations to properly 

forecast the number of licenses needed 

by it in the conduct of its business for 

the upcoming calendar year, which in 

turn helped the Exchange determine the 

resources required to administer and 

monitor trading licenses for the same 

period and to efficiently prepare 

systems changes relating to any 

significant changes in the trading 

license population required for both 

business and regulatory purposes. The 

Exchange believes that the premium 


erjones on PRODPC74 with NOTICES