Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Notices 2057 

3See Exchange Act Release No. 54847 (November 

30, 2006), 71 FR 71012 (December 7, 2006) (the 

‘‘Notice’’). 

4 15 U.S.C. 78f(b) 

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

6 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

7 15 U.S.C. 78s(b)(2). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

each year. The proposed rule change 

was published for comment in the 

Federal Register on December 7, 2006.3

The Commission received no comments 

on the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

A. Description of the Proposal 

1. Background 

NYSE Rule 342 requires supervision 

of the offices, departments and business 

activities of members and member 

organizations. NYSE Rule 342.30 

requires members and member 

organizations to prepare an Annual 

Report addressing specified compliance 

issues by April 1 of each year. The 

Exchange proposed to amend Rule 

342.30 to require the report required 

pursuant to Rule 342.30(e)(iii) (the 

‘‘Process Report’’) in connection with a 

member organization’s CEO certification 

to be submitted to the member 

organization’s board of directors and 

audit committee (if such committee 

exists) on or before April 1st of each 

year. The purpose of the rule change 

was to better harmonize the 

requirements of Rule 342.30 with those 

of NYSE Rule 354 (‘‘Reports to Control 

Persons’’). 

Background 

Rule 342.30 

Rule 342.30 requires each member not 

associated with a member organization 

and each member organization to file 

with the Exchange, by April 1st of each 

year, a report (the ‘‘Annual Report’’) 

outlining its supervision and 

compliance efforts in prescribed 

regulatory areas during the preceding 

year and assessing the adequacy of its 

ongoing compliance processes and 

procedures. The Annual Report 

submitted to the Exchange is also 

required to include, pursuant to Rule 

342.30(e), a certification by the CEO of 

each member organization confirming 

that the member organization has in 

place processes to: 

(A) Establish and maintain policies 

and procedures reasonably designed to 

achieve compliance with applicable 

Exchange rules and Federal securities 

laws and regulations; 

(B) modify such policies and 

procedures as business, regulatory and 

legislative changes and events dictate; 

and 

(C) test the effectiveness of such 

policies and procedures on a periodic 

basis, the timing and extent of which is 

reasonably designed to ensure 

continuing compliance with Exchange 

and Federal securities laws and 

regulations. 

Subsection (e)(iii) of Rule 342.30 

requires these processes to be evidenced 

in the Process Report, which is to be 

reviewed by the CEO, the Chief 

Compliance Officer, and any other 

officers that the member organization 

may deem necessary to make the 

certification. Subsection (e)(iii) also 

requires the Process Report to be 

submitted to the member organization’s 

board of directors and audit committee 

(if such committee exists), although the 

timing of this submission was not 

explicitly stated in the rule. Prior to the 

proposed rule change, the Exchange 

interpreted the rule to require the 

submission prior to CEO certification. 

Rule 354 

Subsection (a) of Rule 354 requires, in 

relevant part, that each member 

organization submit, by April 1st of 

each year, a copy of the Rule 342.30 

Annual Report (also due to the 

Exchange by April 1st) to one or more 

of its control persons or, if the member 

organization has no control person, to 

the audit committee of its board of 

directors or its equivalent committee or 

group. 

In order to better harmonize the 

Process Report submission requirements 

of Rule 342.30(e)(iii) with the Annual 

Report submission requirements of Rule 

354(a), the Exchange proposed to amend 

Rule 342.30(e)(iii) to require each 

member organization to submit the 

Process Report to its board of directors 

and audit committee (if such committee 

exists) on or before April 1st of each 

year, consistent with the timing 

requirements of Rule 354(a) with respect 

to submission of the Annual Report. The 

Exchange stated that it believed that this 

would promote timely submission of the 

Process Report to member organizations’

boards of directors and audit 

committees, while also serving the 

practical purpose of allowing member 

organizations to submit the Process 

Report together with the Annual Report 

so that the two may be reviewed as a 

single comprehensive package. 

III. Discussion 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with Section 6(b)4 of the Act 

in general and Section 6(b)(5) of the 

Act‘‘5 in particular, which require that 

the rules of the Exchange 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.6 The proposed rule 

change promotes timely submission of 

substantive regulatory material to 

member organizations’ governing bodies 

by coordinating the timing requirements 

of Rule 342.30(e)(iii) (Process Report) 

and Rule 354(a) (Submission of Annual 

Report to Control Persons). This should 

promote compliance by allowing 

member organizations’ governing bodies 

to review both reports at the same time. 

The proposed rule change will also 

clarify the appropriate timing for 

submission of the Process Report and 

the Annual Report. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 7 that the 

proposed rule change (SR–NYSE–2006–

97) be, and hereby is, approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–528 Filed 1–16–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55067; File No. SR–NYSE–

2006–80] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change 

and Amendment No. 1 Relating to 

NYSE Rule 1300 (Gold Shares) and 

NYSE Rule 51 (Hours of Business) 

January 9, 2007. 

I. Introduction 

On October 2, 2006, the New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934, as amended (‘‘Act’’)1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend NYSE Rule 1300 (Gold 

Shares) and NYSE Rule 51 (Hours for 

Business) to allow streetTRACKS Gold 

Shares (‘‘Gold Shares’’) to open for 

mstockstill on PROD1PC61 with NOTICES

2058 Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Notices 

3See Form 19b–4 dated November 6, 2006 

(‘‘Amendment No. 1’’). Amendment No. 1 replaced 

the original filing in its entirety. 

4See Securities Exchange Act Release No. 54801 

(November 21, 2006), 71 FR 68870 (SR–NYSE–

2006–80). 

5Trading in Gold Shares has been offered on the 

Exchange since 2004. 

6 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). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(2). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3NYSE Amendment No. 1 makes minor revisions 

to the original filing. 

4NASD Amendment No. 1 makes minor revisions 

to the original filing. 

trading at 8:20 a.m. On November 6, 

2006, the Exchange filed Amendment 

No. 1.3 The proposed rule change, as 

amended, was published for comment 

in the Federal Register on November 28, 

2006.4 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposal 

The Exchange proposed to amend 

NYSE Rule 1300 (Gold Shares) and 

NYSE Rule 51 (Hours for Business) to 

allow Gold Shares to open for trading at 

8:20 a.m.5 Gold Shares represent units 

of fractional undivided interest in and 

ownership of the streetTRACKS Gold 

Trust (the ‘‘Trust’’). The Trust holds 

gold bullion and the investment 

objective of the Trust is to reflect the 

performance of the price of gold bullion, 

less the Trust’s expenses. 

Except for the new opening time, 

trading in Gold Shares will operate as it 

does today. The current assigned 

specialist will continue as the assigned 

specialist and the stock will continue to 

trade at its current post and panel. All 

Exchange systems will be operative 

beginning at 8:20 a.m. and throughout 

the trading day including those systems 

that provide audit trail information. The 

Exchange surveillances that currently 

operate during market hours will be in 

place to coincide with the 8:20 a.m. 

opening. Further, either a Floor 

Governor or two Floor Officials will be 

available upon the 8:20 a.m. opening. 

All Exchange Rules will apply upon the 

open at 8:20 a.m. and throughout the 

trading day. 

The Exchange represented that the 

updated spot price of gold and the 

Intraday Indicative Value (‘‘IIV’’) for 

Gold Shares would be available at 8:20 

a.m. on the Trust’s Web site 

(www.streettracksgoldshares.com). The 

IIV is calculated by the Trust’s Sponsor, 

World Trust Gold Services, LLC. The 

Exchange’s Web site (http:// 

www.nyse.com) provides a link to the 

Trust’s Web site. The spot price of gold 

and the IIV on the Trust’s Web site are 

subject to a 5 to 10 second delay. 

III. Discussion and Commission 

Findings 

After careful consideration, 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.6 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,7 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 Exchange stated that it proposes 

to amend its Rules 1300 and 51 to allow 

the opening of Gold Shares for trading 

at 8:20 a.m. in order to remain 

competitive and in light of the fact that 

interest in commodity-based securities 

has increased. An 8:20 a.m. opening 

would coincide with the opening of 

COMEX trading in gold futures and 

gold options and thus permit trading in 

Gold Shares to start at the same time as 

other gold-based instruments. The 

Commission believes that an 8:20 a.m. 

opening would give customers the 

opportunity to trade an equity product 

based on the price of gold from the time 

that gold futures and options on gold 

futures begin trading on the COMEX

and would, therefore, provide the 

Exchange customers with better 

opportunities for exercising their 

investment choices. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–NYSE–2006–

80), as modified by Amendment No. 1, 

be, and it hereby is, approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–535 Filed 1–16–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55072; File Nos. SR–NYSE–

2006–78; SR–NASD–2006–113] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC and the 

National Association of Securities 

Dealers, Inc.; Notice of Filing of 

Proposed Rule Changes To Amend 

NYSE Rules 472 and 344, and NASD 

Rules 1050 and 2711 Relating to 

Research Analyst Conflicts of Interest 

January 9, 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 

September 27, 2006, the New York 

Stock Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change. On December 20, 2006, NYSE 

filed Amendment No. 1 to its proposed 

rule change.3

On September 27, 2006, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) filed with the Commission 

the proposed rule change. On November 

17, 2006, NASD filed Amendment No. 

1 to its proposed rule change.4

The proposed rule changes are 

described in Items I, II, and III below, 

which Items have substantially been 

prepared by the NYSE and NASD (the 

‘‘SROs’’). The Commission is publishing 

this notice to solicit comments on the 

proposed rule changes, as amended, 

from interested persons. 

I. Self-Regulatory Organizations’

Statements of the Terms of Substance of 

the Proposed Rule Changes 

The Exchange proposes to amend 

certain provisions of NYSE Rules 472 

and 344. These amendments eliminate 

the exception for pre-publication factual 

verification review of research reports 

by non-research personnel; change the 

quiet periods surrounding securities 

offerings and the release of lock-up 

agreements; allow member 

organizations to develop policies and 

procedures if they choose to prohibit 

research analysts from holding 

securities for companies they cover; 

alter the format for certain disclosures 

in research reports; and extend the antiretaliation prohibitions to all employees 

of a member organization, not just 

investment banking. 

mstockstill on PROD1PC61 with NOTICES