Federal Register / Vol. 72, No. 54 / Wednesday, March 21, 2007 / Notices 13333 

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

2 17 CFR 240.19b–4. 

3 In April 2006, the Commission approved 

Commentary .02 to NYSE Arca Equities Rule 8.200, 

which sets forth the rules related to listing and 

trading criteria for Investment Shares, and approved 

trading pursuant to UTP the shares of the DB 

Commodity Index Tracking Fund. See Securities 

Exchange Act Release No. 53736 (April 27, 2006), 

71 FR 26582 (May 5, 2006) (SR–PCX–2006–22). In 

addition, the Commission recently approved 

trading pursuant to UTP the shares of the 

PowerShares DB G10 Harvest Fund pursuant to 

Commentary .02 to NYSE Arca Equities Rule 8.200. 

See Securities Exchange Act Release No. 34–54569 

(October 4, 2006), 71 FR 60594 (October 13, 2006) 

(SR–NYSEArca–2006–64). 

4See Securities Exchange Act Release No. 55029 

(December 29, 2006), 72 FR 806 (January 8, 2007) 

(SR–Amex–2006–76) (the ‘‘Amex Order’’). 

5Other holdings of the Master Fund will include 

cash and U.S. Treasury securities for deposit with 

futures commission merchants as margin and other 

high credit quality short-term fixed income 

securities. 

6Following is a list of futures contracts and other 

commodity interests in which the respective Master 

Fund may invest and the exchanges on which they 

trade: Energy Index—sweet light crude (NYMEX), 

heating oil (NYMEX), brent crude oil (ICE Futures), 

RBOB gasoline (NYMEX), natural gas (NYMEX); Oil 

Index—sweet light crude (NYMEX); Precious 

Metals Index—gold (COMEX), silver (COMEX); 

Gold Index—gold (COMEX); Silver Index—silver 

(COMEX); Base Metals Index—aluminum (LME), 

zinc (LME), copper-grade A (LME); Agriculture 

Index—corn (CBOT), wheat (CBOT), soybeans 

(CBOT), sugar (NYBOT). 

7The Managing Owner is registered as a 

commodity pool operator (the ‘‘CPO’’) and 

commodity trading advisor (the ‘‘CTA’’) with the 

Commodity Futures Trading Commission (‘‘CFTC’’) 

and is a member of the National Futures 

Association (‘‘NFA’’). The Managing Owner will 

serve as the CPO and CTA of each of the Funds and 

each of the Master Funds. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55453; File No. SR–

NYSEArca-2006–62] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and Order 

Granting Accelerated Approval of a 

Proposed Rule Change as Modified by 

Amendment Nos. 1 and 2 Thereto To 

Trade Shares of the PowerShares DB 

Energy Fund, the PowerShares DB Oil 

Fund, the PowerShares DB Precious 

Metals Fund, the PowerShares DB 

Gold Fund, the PowerShares DB Silver 

Fund, the PowerShares DB Base 

Metals Fund, and the PowerShares DB 

Agriculture Fund Pursuant to Unlisted 

Trading Privileges 

March 13, 2007. 

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

Securities Exchange Act of 1934, as 

amended, (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on October 19, 2006, 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. On October 31, 2006, the 

Exchange filed Amendment No. 1 to the 

proposed rule change. The Exchange 

filed Amendment No. 2 to the proposed 

rule change on February 16, 2007. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change, as amended, from interested 

persons. This order provides notice of 

the proposed rule change as modified by 

Amendment Nos. 1 and 2 and approves 

the proposed rule change as amended 

on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to trade 

shares (‘‘Shares’’) of the PowerShares 

DB Energy Fund, the PowerShares DB 

Oil Fund, the PowerShares DB Precious 

Metals Fund, the PowerShares DB Gold 

Fund, the PowerShares DB Silver Fund, 

the PowerShares DB Base Metals Fund, 

and the PowerShares DB Agriculture 

Fund (collectively the ‘‘Funds’’) 

pursuant to unlisted trading privileges 

(‘‘UTP’’) under Commentary .02 to 

NYSE Arca Equities Rule 8.200. The text 

of the proposed rule change is available 

at the Exchange, the Commission’s 

Public Reference Room, and http:// 

nysearca.com. 

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 III 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 

Pursuant to Commentary .02 to NYSE 

Arca Equities Rule 8.200, the Exchange 

may approve for listing and trading trust 

issued receipts (‘‘TIRs’’) investing in 

shares or securities (‘‘Investment 

Shares’’) that hold investments in any 

combination of futures contracts, 

options on futures contracts, forward 

contracts, commodities, swaps or high 

credit quality short-term fixed income 

securities or other securities.3 The 

Commission previously approved a 

proposal to list and trade the Shares of 

the Funds by the American Stock 

Exchange LLC (the ‘‘Amex’’).4

The Exchange proposes to trade 

pursuant to UTP the Shares of each of 

the Funds pursuant to Commentary .02 

to NYSE Arca Equities Rule 8.200. The 

Shares represent beneficial ownership 

interests in the corresponding Fund’s 

net assets, consisting solely of the 

common units of beneficial interests of 

the DB Energy Master Fund, the DB Oil 

Master Fund, the DB Precious Metals 

Master Fund, the DB Gold Master Fund, 

the DB Silver Master Fund, the DB Base 

Metals Master Fund and the DB 

Agriculture Master Fund, respectively 

(collectively, the ‘‘Master Funds’’). 

DB Multi-Sector Commodity Master 

Trust (the ‘‘Master Trust’’) is organized 

as a Delaware statutory trust with each 

of the Master Funds representing a 

series of the Master Trust. The Master 

Funds will hold primarily 5 futures 

contracts 6 on the commodities 

comprising the Deutsche Bank Liquid 

Commodity Index—Optimum Yield 

Energy Excess ReturnTM, Deutsche Bank 

Liquid Commodity Index—Optimum 

Yield Crude Oil Excess ReturnTM, 

Deutsche Bank Liquid Commodity 

Index—Optimum Yield Precious Metals 

Excess ReturnTM, Deutsche Bank Liquid 

Commodity Index—Optimum Yield 

Gold Excess ReturnTM, Deutsche Bank 

Liquid Commodity Index—Optimum 

Yield Silver Excess ReturnTM, Deutsche 

Bank Liquid Commodity Index 

Optimum Yield Industrial Metals Excess 

ReturnTM, and Deutsche Bank Liquid 

Commodity Index—Optimum Yield 

Agriculture Excess ReturnTM

(collectively, the ‘‘Indexes’’), as the case 

may be. The sponsor of the Indexes is 

Deutsche Bank AG London (the ‘‘Index 

Sponsor’’). Each of the Funds and each 

of the Master Funds are commodity 

pools operated by DB Commodity 

Services LLC (the ‘‘Managing Owner’’).7

The Shares 

The Exchange submits that 

Commentary .02 to NYSE Arca Equities 

Rule 8.200 accommodates the listing 

and trading of the Shares. The Exchange 

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 Shares will trade on the 

NYSE Arca Marketplace from 9:30 a.m. 

until 4:15 p.m. Eastern Time (‘‘ET’’), 

except that shares of the PowerShares 


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8Because the LME is closed for floor and 

electronic trading during the Exchange’s late 

trading session (from 4:15 p.m. until 8 p.m. ET), an 

updated IFV for the PowerShares DB Base Metals 

Fund is not possible to calculate during such 

session. The Exchange may rely on the listing 

market to monitor dissemination of the IFV during 

the Exchange’s core trading session (9:30 a.m. to 

4:15 p.m. ET). Currently the Index Sponsor for the 

PowerShares DB Base Metals Fund’s index does not 

calculate updated index values during the 

Exchange’s late trading session; however, if the 

Index Sponsor did so in the future, the Exchange 

will not trade shares of the PowerShares DB Base 

Metals Fund unless such official index value is 

widely disseminated. 

9See Amex Order, supra note 4. 

10The ‘‘cash deposit amount’’ equals the NAV per 

Share of the applicable Fund times 200,000 (i.e., 

NAV per Basket Aggregation). 

11The ‘‘cash redemption amount’’ equals the 

NAV per Basket Aggregation. 

12The Bid-Ask Price of Shares is determined 

using the highest bid and lowest offer as of the time 

of calculation of the NAV. 

DB Base Metals Fund will also trade 

from 4:15 p.m. until 8 p.m. ET, even if 

the Indicative Fund Value (‘‘IFV’’), as 

discussed below, is not disseminated 

from 4:15 p.m. until 8 p.m. ET.8 The 

Exchange has appropriate rules to 

facilitate transactions in the Shares 

during these trading sessions. 

Like other exchange traded fund 

products, each of the Funds will issue 

and redeem its Shares on a continuous 

basis at a price equal to the NAV per 

share next determined after an order is 

received in proper form. Also, each of 

the Funds will issue and redeem its 

Shares only in aggregations of 200,000 

shares (‘‘Basket Aggregations’’) and only 

through qualified market participants 

that have entered into agreements with 

the Managing Owner (each, an 

‘‘Authorized Participant’’). Additional 

information about the creation and 

redemption process is included in the 

Amex Order.9 In summary, to create 

Shares, an Authorized Participant must 

properly place a creation order and 

deliver the specified ‘‘cash deposit 

amount’’ 10 and applicable transaction 

fee to the Fund Administrator (‘‘The 

Bank of New York’’). The Fund 

Administrator will issue to the 

Authorized Participant the appropriate 

number of Basket Aggregations. To 

redeem Shares, an Authorized 

Participant must properly place a 

redemption order and deliver Shares 

that in the aggregate constitute one or 

more Basket Aggregations, plus any 

applicable transaction fee. The Fund 

Administrator will deliver the 

appropriate ‘‘cash redemption 

amount’’ 11 for each Basket Aggregation 

that an Authorized Participant redeems. 

On each business day, the 

Administrator will make available 

immediately prior to the opening of 

trading on Amex, through the facilities 

of the Consolidated Tape Association 

(‘‘CTA’’), the Basket Amount for the 

creation of a Basket. According to the 

Amex Order, the Amex will disseminate 

every 15 seconds throughout the trading 

day, via the facilities of the CTA, an 

amount representing on a per Share 

basis, the current values of the Basket 

Amounts for each of the Funds. 

After 4 p.m. ET each business day, the 

Administrator will determine the NAV 

for each of the Funds, utilizing the 

current settlement value of the 

particular commodity futures contracts. 

The calculation methodology for the 

NAV is described in more detail in the 

Amex Order. 

After 4 p.m. ET each business day, the 

Administrator, Amex and Managing 

Owner will disseminate the NAVs for 

the Shares and the Basket Amounts (for 

orders placed during the day). The 

Basket Amounts and the NAVs are 

communicated by the Administrator to 

all Authorized Participants via facsimile 

or electronic mail message and the NAV 

will be available on the Funds’ Web site 

at http://www.dbfunds.db.com. 

Availability of Information About the 

Indexes, the Underlying Futures 

Contracts and the Shares 

Quotations for and last sale 

information regarding the Shares are 

disseminated through the Consolidated 

Tape System (‘‘CTS’’). The Index 

Sponsor will publish the value of each 

of the Indexes at least once every fifteen 

(15) seconds throughout each trading 

day on the CTA, Bloomberg, Reuters, 

and on the Fund’s Web site at http:// 

www.dbfunds.db.com. The closing 

Index levels will similarly be provided 

by the Index Sponsor. In addition, any 

adjustments or changes to the Indexes 

will also be provided by the Index 

Sponsor and Amex on their respective 

Web sites. 

The Web site for the Fund (http:// 

www.dbfunds.db.com), which is 

publicly accessible at no charge, will 

contain the following information: (a) 

The current NAV per share daily and 

the prior business day’s NAV and the 

reported closing price; (b) the mid-point 

of the bid-ask price in relation to the 

NAV as of the time the NAV is 

calculated (the ‘‘Bid-Ask Price’’); 12 (c) 

the calculation of the premium or 

discount of such price against such 

NAV; (d) 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 (4) previous 

calendar quarters; (e) the prospectus; 

and (f) other applicable quantitative 

information. 

As described above, the respective 

NAVs for the Funds will be calculated 

and disseminated daily to all market 

participants at the same time. According 

to the Amex Order, the Amex also 

intends to disseminate for each of the 

Funds on a daily basis by means of 

CTA/CTS High Speed Lines information 

with respect to the corresponding IFV 

(as discussed below), recent NAV and 

shares outstanding. The Amex will also 

make available on its Web site daily 

trading volume of the Shares of each of 

the Funds, closing prices of such 

Shares, and the corresponding NAV. 

The closing price and settlement prices 

of the futures contracts comprising the 

Indexes and held by the corresponding 

Master Funds are also readily available 

from the relevant futures exchanges, 

automated quotation systems, published 

or other public sources, or on-line 

information services such as Bloomberg 

or Reuters. 

Amex has represented that it will 

disseminate through the facilities of the 

CTA an updated IFV for each of the 

Funds. The respective IFVs will be 

disseminated on a per Share basis at 

least every 15 seconds from 9:30 a.m. to 

4:15 p.m. ET, according to the Amex 

Order. The IFVs will be calculated 

based on the cash required for creations 

and redemptions for the respective 

Funds adjusted to reflect the price 

changes of the corresponding Index 

commodities through investments held 

by the Master Funds, i.e., futures 

contracts. 

The IFVs will not reflect price 

changes to the price of an underlying 

commodity between the close of trading 

of the futures contract at the relevant 

futures exchange and 4:15 p.m. ET. 

While the Shares will trade on the 

NYSE Arca Marketplace from 9:30 a.m. 

to 4:15 p.m. ET (the shares of the 

PowerShares DB Base Metals Fund, 

however, will trade until 8 p.m. ET), 

regular trading hours for each of the 

Index commodities on the various 

futures exchanges vary widely, as set 

forth in detail in the Amex Order. 

Therefore, the value of a Share may be 

influenced by non-concurrent trading 

hours between the NYSE Arca 

Marketplace and the various futures 

exchanges on which the futures 

contracts based on the Index 

commodities are traded. 

UTP Trading Criteria 

The Exchange represents that it will 

cease trading the Shares of a Fund if: (a) 

The listing market stops trading the 

Shares because of a regulatory halt 

similar to a halt based on NYSE Arca 


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13Telephone conversation between Tim 

Malinowski, Director, NYSE, and Ronesha A. 

Butler, Special Counsel, Division of Market 

Regulation (‘‘Division’’), Commission, on March 6, 

2007. 

14See NYSE Arca Equities Rule 7.12. 

15Pursuant to a telephone conversation between 

Tim Malinowski, Director, NYSE and Ronesha A. 

Butler, Special Counsel, Division, Commission, on 

March 13, 2007, a paragraph contained in this 

section was deleted to eliminate the reference to the 

ITS Plan. 

16See Letter to George T. Simon, Esq., Foley & 

Lardner LLP, from Racquel L. Russell, Branch Chief, 

Office of Trading Practices and Processing, 

Commission, dated June 21, 2006. 

17For a list of the current members and affiliate 

members of ISG, see http://www.isgportal.com. 18NYSE Arca Equities Rule 9.2(a) (‘‘Diligence as 

to Accounts’’) provides that ETP Holders, before 

recommending a transaction, must have reasonable 

grounds to believe that the recommendation is 

suitable for the customer based on any facts 

disclosed by the customer as to his other security 

holdings and as to his financial situation and needs. 

Further, the proposed rule amendment provides, 

with a limited exception, that prior to the execution 

of a transaction recommended to a non-institutional 

customer, the ETP Holders shall make reasonable 

efforts to obtain information concerning the 

customer’s financial status, tax status, investment 

objectives, and any other information that they 

believe would be useful to make a recommendation. 

See Securities Exchange Act Release No. 54045 

(June 26, 2006), 71 FR 37971 (July 3, 2006) (SR–

PCX–2005–115). 

Equities Rule 7.12 or a halt because the 

IFV or the value of the Index is no 

longer available at least every 15 

seconds; or (b) the listing market delists 

the Shares. Additionally, the Exchange 

may cease trading the Shares if such 

other event shall occur or condition 

exists which in the opinion of the 

Exchange makes further dealings on the 

Exchange inadvisable. UTP trading in 

the Shares is also governed by the 

trading halts provisions of NYSE ARCA 

Equities Rule 7.34 relating to temporary 

interruptions in the calculation or wide 

dissemination of the Intraday Indicative 

Value (which would encompass the 

IFV) or the value of the underlying 

index. 

Trading Rules 

The Exchange 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. Shares will trade on 

the NYSE Arca Marketplace from 9:30 

a.m. until 4:15 p.m. ET, except that 

shares of the PowerShares DB Base 

Metals Fund will also trade from 4:15 

p.m. until 8 p.m. ET. The Exchange has 

appropriate rules to facilitate 

transactions in the Shares during core 

and evening trading sessions.13

The trading of the Shares will be 

subject to Commentary .02(e)(1)–(4) to 

NYSE Arca Equities Rule 8.200, which 

sets forth certain restrictions on ETP 

Holders acting as registered Market 

Makers in TIRs that invest in Investment 

Shares to facilitate surveillance. See 

‘‘Surveillance’’ below for more 

information. 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares. 

Trading may be halted because of 

market conditions or for reasons that, in 

the view of the Exchange, make trading 

in the Shares inadvisable. These may 

include: (1) The extent to which trading 

is not occurring in the underlying 

futures contracts, or (2) whether other 

unusual conditions or circumstances 

detrimental to the maintenance of a fair 

and orderly market are present. In 

addition, trading in Shares will be 

subject to trading halts caused by 

extraordinary market volatility pursuant 

to the Exchange’s ‘‘circuit breaker’’

rule 14 or by the halt or suspension of 

trading of the underlying futures 

contracts. See ‘‘UTP Trading Criteria’’

above for specific instances when the 

Exchange will cease trading the 

Shares.15

The Shares will not be subject to the 

short sale rule pursuant to a letter 

issued in response to a request for noaction advice under Rule 10a–1 under 

the Act.16

Surveillance 

The Exchange intends to utilize its 

existing surveillance procedures 

applicable to derivative products to 

monitor trading in the Shares. The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

and to deter and detect violations of 

Exchange rules. 

The Exchange’s current trading 

surveillance focuses on detecting 

securities trading outside their normal 

patterns. When such situations are 

detected, surveillance analysis follows 

and investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

Further, trading in the Shares will be 

subject to Commentary .02(e)(1)–(4) to 

NYSE Arca Equities Rule 8.200, which 

sets forth certain restrictions on ETP 

Holders acting as registered Market 

Makers in TIRs that invest in Investment 

Shares to facilitate surveillance. 

Commentary .02(e)(1) to NYSE Arca 

Equities Rule 8.200 requires that the 

ETP Holder acting as a registered Market 

Maker in the Shares provide the 

Exchange with information relating to 

its trading in the underlying physical 

asset or commodity, related futures or 

options on futures, or any other related 

derivatives. Commentary .02(e)(4) to 

NYSE Arca Equities Rule 8.200 

prohibits the ETP Holder acting as a 

registered Market Maker in the Shares 

from using any material nonpublic 

information received from any person 

associated with an ETP Holder or 

employee of such person regarding 

trading by such person or employee in 

the underlying physical asset or 

commodity, related futures or options 

on futures or any other related 

derivative (including the Shares). In 

addition, Commentary .02(e)(1) to NYSE 

Arca Equities Rule 8.200 prohibits the 

ETP Holder acting as a registered Market 

Maker in the Shares from being 

affiliated with a market maker in the 

underlying physical asset or 

commodity, related futures or options 

on futures or any other related 

derivative unless adequate information 

barriers are in place, as provided in 

NYSE Arca Equities Rule 7.26. 

Commentary .02(e)(2)–(3) to NYSE Arca 

Equities Rule 8.200 requires that Market 

Makers handling the Shares provide the 

Exchange with all the necessary 

information relating to their trading in 

the underlying physical assets or 

commodities, related futures contracts 

and options thereon or any other 

derivative. 

The Exchange currently has in place 

an Information Sharing Agreement with 

the Intercontinental Exchange, Inc. 

(ICE), Futures, London Metals Exchange 

(LME) and New York Mercantile 

Exchange (NYMEX), for the purpose of 

providing information in connection 

with trading in or related to futures 

contracts traded on their respective 

exchanges comprising the Indexes. The 

Exchange may obtain information via 

the Intermarket Surveillance Group 

(‘‘ISG’’) from other exchanges who are 

members or affiliates of the ISG, 

including Chicago Board of Trade 

(CBOT) and Board of Trade of the City 

of New York (NYBOT).17

Information Bulletin 

Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Bulletin 

will discuss the following: (1) The 

procedures for purchases and 

redemptions of Shares in Baskets (and 

that Shares are not individually 

redeemable); (2) NYSE Arca Equities 

Rule 9.2(a),18 which imposes a duty of 

due diligence on its ETP Holders to 

learn the essential facts relating to every 

customer prior to trading the Shares; (3) 

how information regarding the IFVs is 

disseminated; (4) the requirement that 


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19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

21 17 CFR 240.12f–5. 

22 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). 

23 15 U.S.C. 78f(b)(5). 

24 15 U.S.C. 78l(f). 

25Section 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. 

26See Amex Order, supra note 4. 

27 17 CFR 240.12f–5. 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (5) 

trading information. 

In addition, the Information Bulletin 

will advise ETP Holders, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Funds. The Exchange 

notes that investors purchasing Shares 

directly from a Fund (by delivery of the 

corresponding Cash Deposit Amount) 

will receive a prospectus. ETP Holders 

purchasing Shares from a Fund for 

resale to investors will deliver a 

prospectus to such investors. The 

Information Bulletin will also discuss 

any exemptive, no-action and 

interpretive relief granted by the 

Commission from any rules under the 

Act. 

In addition, the Information Bulletin 

will reference that the Funds are subject 

to various fees and expenses described 

in the Registration Statement. The 

Information Bulletin will also reference 

that the CFTC has regulatory 

jurisdiction over the trading of futures 

contracts. 

The Information Bulletin will also 

disclose the trading hours of the Shares 

of the Funds and that the NAV for the 

Shares will be calculated after 4 p.m. ET 

each trading day. The Bulletin will 

disclose that information about the 

Shares of each Fund and the 

corresponding Indexes will be publicly 

available on the Funds’ Web site. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 19 of the 

Act, in general, and furthers the 

objectives of Section 6(b)(5) 20 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. 

In addition, the proposed rule change 

is consistent with Rule 12f–5 21 under 

the Act because it deems the Shares to 

be equity securities, thus rendering the 

Shares subject to the Exchange’s rules 

governing the trading of equity 

securities. 

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. 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 Exchange 

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–NYSEArca–2006–62 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–NYSEArca–2006–62. 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 

Number SR–NYSEArca–2006–62 and 

should be submitted on or before April 

11, 2007. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.22 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,23 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. 

In addition, the Commission finds 

that the proposal is consistent with 

Section 12(f) of the Act,24 which permits 

an exchange to trade, pursuant to UTP, 

a security that is listed and registered on 

another exchange.25 The Commission 

notes that it previously approved the 

listing and trading of the Shares on the 

Amex.26 The Commission also finds that 

the proposal is consistent with Rule 

12f–5 under the Act,27 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 trading in the Shares will be 

subject to the Exchange’s existing rules 

governing the trading of equity 

securities. 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 54 / Wednesday, March 21, 2007 / Notices 13337 

28 15 U.S.C. 78k–1(a)(1)(C)(iii). 

29See Amex Order, supra note 4. 

30 15 U.S.C. 78s(b)(2). 

31 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(7). 

2 17 CFR 240.19b–7. 3 7 U.S.C. 7a–2(c). 

The Commission further believes that 

the proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Act,28 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. 

Finally, the Commission notes that, if 

the Shares should be delisted by the 

Amex, the original 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 has appropriate rules 

to facilitate transactions in this type of 

security in the core and evening trading 

sessions. 

2. The Exchange’s surveillance 

procedures are adequate to properly 

monitor the trading of the Shares on the 

Exchange. In particular, the Exchange 

has in place an Information Sharing 

Agreement with ICE, LME, and NYMEX, 

for the purpose of providing information 

in connection with trading in or related 

to futures contracts traded on their 

respective exchanges comprising the 

Indexes. Further, the Exchange is a 

member of the ISG. In addition, to 

facilitate surveillance, the Exchange 

represents that trading in the Shares 

will be subject to Commentary .02(e)(1)–

(4) to NYSE Arca Equities Rule 8.200. 

3. The Exchange will inform its ETP 

Holders in an Information Bulletin of 

the special characteristics and risks 

associated with trading the Shares. 

4. The Exchange will require its ETP 

Holders to deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction and will 

note this prospectus delivery 

requirement in the Information Bulletin. 

5. The Exchange will cease trading the 

Shares of a Fund if: (a) The listing 

market stops trading the Shares because 

of a regulatory halt similar to a halt 

based on NYSE Arca Equities Rule 7.12 

or a halt because the IFV or the value 

of the applicable Underlying Index is no 

longer available at least every 15 

seconds; or (b) the listing market delists 

the Shares. 

6. The Exchange will halt trading as 

provided in NYSE Arca Equities Rule 

7.34. 

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 previously, the Commission 

previously found that the listing and 

trading of the Shares on the Amex is 

consistent with the Act.29 The 

Commission presently is not aware of 

any regulatory issue that should cause it 

to revisit that earlier finding or preclude 

the trading of the Shares on the 

Exchange 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,30 that the 

proposed rule change (SR–NYSEArca–

2006–62), as modified by Amendment 

Nos. 1 and 2, be, and it hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.31

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5085 Filed 3–20–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55475; File No. SR–OC–

2007–02] 

Self-Regulatory Organizations; 

OneChicago, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to Block Trades 

March 15, 2007. 

Pursuant to Section 19(b)(7) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–7 under the 

Act,2 notice is hereby given that on 

February 5, 2007, OneChicago, LLC 

(‘‘OneChicago’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change described in Items 

I, II, and III below, which Items have 

been substantially prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. OneChicago 

has also filed the proposed rule change 

with the Commodity Futures Trading 

Commission (‘‘CFTC’’). 

OneChicago filed a written 

certification with the CFTC under 

Section 5c(c) of the Commodity 

Exchange Act 3 on February 2, 2007. 

I. Self-Regulatory Organization’s 

Description of the Proposed Rule 

Change 

OneChicago is proposing to amend its 

policy regarding block trades, the text of 

which is available at the Exchange and 

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 

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 

OneChicago is proposing to amend its 

Policies: Block Trades, Pre-Execution 

Discussions and Cross Trades (‘‘Block 

Trade Policy’’) relating to the block 

trade minimum contracts size. In 

addition to the current minimum 

contract size of 100 contracts for block 

trades, the proposed rule change would 

permit a minimum block trade contract 

size that is the equivalent to 10,000 

shares of the underlying security for 

futures on single security (or combined 

securities if a relevant corporate event 

has occurred). 

Based on its experience, the Exchange 

believes the proposed rule change 

would permit an appropriate minimum 

contract size for block trades. The 

proposed rule change would set a 

minimum contract size for block trades 

that is equivalent to the customary size 

of large transactions in relevant markets, 

i.e., the securities market. The proposed 

rule change would also permit a block 

trade size based on combined securities 

if a relevant corporate event has 

occurred. Combined securities would be 

relevant with certain corporate events, 

such as spin offs or three for two splits. 


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