Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 3171 

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

2 17 CFR 240.19b–4. 

such information is business 

confidential and would not customarily 

be released to the public by the 

submitter. A non-confidential version of 

the comment must also be provided. For 

any document containing business 

confidential information, the file name 

of the business confidential version 

should begin with the characters ‘‘BC-’’, 

and the file name of the public version 

should begin with the character ‘‘P-’’. 

The ‘‘P-’’ or ‘‘BC-’’ should be followed 

by the name of the submitter. 

Submissions should not include 

separate cover letters; information that 

might appear in a cover letter should be 

included in the submission itself. To the 

extent possible, any attachments to the 

submission should be included in the 

same file as the submission itself, and 

not as separate files. 

All comments should be addressed to 

Sybia Harrison, Special Assistant to the 

Section 301 Committee, and sent (i) 

electronically, to the following e-mail 

address: FR0606@ustr.eop.gov, with 

‘‘China Special Provincial Review’’ in 

the subject line, or (ii) by fax, to (202) 

395–9458, with a confirmation copy 

sent electronically to the e-mail address 

above. 

Public Inspection of Submissions: 

Within one business day of receipt, nonconfidential submissions will be placed 

in a public file, open for inspection at 

the USTR reading room, Office of the 

United States Trade Representative, 

Annex Building, 1724 F Street, NW., 

Room 1, Washington, DC. An 

appointment to review the file must be 

scheduled at least 48 hours in advance 

and may be made by calling Jacqueline 

Caldwell at (202) 395–6186. The USTR 

reading room is open to the public from 

10 a.m. to 12 noon and from 1 p.m. to 

4 p.m., Monday through Friday. 

Victoria A. Espinel, 

Assistant USTR for Intellectual Property and 

Innovation. 

[FR Doc. E7–1022 Filed 1–23–07; 8:45 am] 

BILLING CODE 3190–W7–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55110; File No. SR–Amex–

2006–86] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of a Proposed Rule Change 

and Amendment Nos. 1, 2, and 3 

Thereto Relating to the Listing and 

Trading of Shares of the PowerShares 

DB U.S. Dollar Index Bullish Fund and 

the PowerShares DB U.S. Dollar Index 

Bearish Fund 

January 16, 2007. 

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

Securities Exchange Act of 1934 (‘‘Act’’

or ‘‘Exchange Act’’)1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on September 13, 2006, the American 

Stock Exchange LLC (‘‘Amex’’ 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 

prepared substantially by Amex. On 

November 17, 2006, Amex filed 

Amendment No. 1 to the proposed rule 

change. On December 19, 2006, Amex 

filed Amendment No. 2 to the proposed 

rule change. On January 12, 2007, Amex 

filed Amendment No. 3 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 

Pursuant to Commentary .07 to Amex 

Rule 1202, which permits the listing 

and trading of shares of trust-issued 

receipts (‘‘TIRs’’) that invest in shares or 

securities (the ‘‘Investment Shares’’) 

issued by a trust, partnership, 

commodity pool, or other similar entity 

that holds investments comprising, or 

otherwise based on, any combination of 

securities, futures contracts, swaps, 

forward contracts, options on futures 

contracts, commodities, or portfolios of 

investments, the Exchange seeks to list 

and trade shares of the PowerShares DB 

U.S. Dollar Index Bullish Fund (the 

‘‘Bullish Fund’’) and the PowerShares 

DB U.S. Dollar Index Bearish Fund (the 

‘‘Bearish Fund,’’ and together with the 

Bullish Fund, collectively, the 

‘‘Funds’’). 

The text of the proposal is available 

at Amex, at the Commission’s Public 

Reference Room, and on Amex’s Web 

site at http://www.amex.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, 

Amex 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, and the most 

significant aspects of such statements 

are set forth in Sections A, B, and C 

below. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Pursuant to Commentary .07 to Amex 

Rule 1202, the Exchange may approve 

for listing and trading TIRs investing in 

Investment Shares that hold 

investments in any combination of 

securities, futures contracts, options on 

futures contracts, swaps, forward 

contracts, commodities, or portfolios of 

investments. Amex proposes to list for 

trading the shares of the Bullish Fund 

and the Bearish Fund (the ‘‘Shares’’), 

which represent beneficial ownership 

interests in the corresponding common 

units of beneficial interests of the DB 

U.S. Dollar Index Master Bullish Fund 

(the ‘‘Master Bullish Fund’’) and the DB 

U.S. Dollar Index Master Bearish Fund 

(the ‘‘Master Bearish Fund,’’ and 

together with the Master Bullish Fund, 

collectively, the ‘‘Master Funds’’), 

respectively. 

The PowerShares DB U.S. Dollar 

Index Trust (the ‘‘Trust’’) is organized as 

a Delaware statutory trust with each of 

the Funds representing a series of the 

Trust. The DB U.S. Dollar Index Master 

Trust (the ‘‘Master Trust’’) is also 

organized as a Delaware statutory trust 

with each of the Master Funds 

representing a series of the Master Trust. 

The overall investment objective of 

each of the Funds and the Master Funds 

is to reflect the performance of their 

respective benchmark index, less 

expenses, plus the excess, if any, of the 

corresponding Master Fund’s interest 

income from its holdings of U.S. 

Treasury and other high-credit-quality, 

short-term fixed income securities over 

its expenses. The Bullish Fund will seek 

to track the ‘‘Long Index’’ by investing 

in long positions in futures contracts 

(‘‘DX Contracts’’) on the U.S. Dollar 

Index (USDX). The Bearish Fund will 

seek to track the ‘‘Short Index’’ by 

investing in short positions in DX 

Contracts on the USDX. 


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3See Securities Exchange Act Release No. 53105 

(January 11, 2006), 71 FR 3129 (January 19, 2006). 4See id. (approving the listing and trading of the 

DB Commodity Index Tracking Fund). 5See Securities Exchange Act Release No. 54450 

(September 14, 2006), 71 FR 55230 (September 21, 

2006) (approving the listing and trading of shares 

of the PowerShares DB G10 Currency Harvest Fund, 

formerly known as the DB Currency Index Value 

Fund). 

6See, e.g., Securities Exchange Act Release Nos. 

53582 (March 31, 2006), 71 FR 17510 (April 6, 

2006) (approving the listing and trading of shares 

of the United States Oil Fund, LP); 53521 (March 

20, 2006), 71 FR 14967 (March 24, 2006) (approving 

the listing and trading of shares of the iShares 

Silver Trust); 53059 (January 5, 2006), 71 FR 2072 

(January 12, 2006) (approving the listing and 

trading of shares of the Euro Currency Trust); 51058 

(January 19, 2005), 70 FR 3749 (January 26, 2005) 

(approving the listing and trading of shares of the 

iShares COMEX Gold Trust); and 50603 (October 

28, 2004), 69 FR 64614 (November 5, 2004) 

(approving the listing and trading of shares of the 

streetTRACKS Gold Shares). 

7The Trust and the Funds will not be subject to 

registration and regulation under the Investment 

Company Act of 1940 (the ‘‘1940 Act’’). 

8The DX Contract is a futures contract tied to the 

USDX that is traded on NYBOT. The DX Contracts 

have been trading on NYBOT since 1985. The 

contract calls for the receipt/delivery of the 

underlying six component currencies, or ‘‘Index 

Currencies’’ (as defined herein), of the USDX. The 

trading session for the DX Contract on NYBOT is 

from 8:05 a.m. to 3 p.m. Eastern time (‘‘ET’’). 

Futures contracts on the USDX are also traded in 

Dublin, Ireland, through the FINEX Europe market 

from 7 p.m to 10 p.m. ET and from 2 a.m. to 8:05 

a.m. ET. Liquidity of the DX Contract is derived 

from the underlying foreign exchange market with 

respect to each Index Currency. The daily average 

volume of the foreign currency exchange market as 

calculated by the Bank for International Settlements 

(BIS) is approximately $1.2 trillion (for the threeyear period from 1999–2001). The Index Currencies 

account for approximately 94.5% of that daily 

volume. The minimum price movement of a DX 

Contract is .01 of an USDX point, or $10.00 per 

DX Contract. The settlement value of the underlying 

USDX is computed using a trade-weighted 

geometric average of the six component currencies 

(as described in more detail herein). The Exchange 

states that NYBOT’s Web site contains additional 

information regarding the DX Contracts at http:// 

www.nybot.com. 

9The Exchange notes that the example applies if 

t-1 is an Index Roll Day (as defined herein). For all 

other days the number of DX Contracts held is equal 

to the number of contracts held on the previous 

business day. 

Both the Long and Short Indexes 

(collectively, the ‘‘Indexes’’) are 

designed to reflect the performance of 

the nearest expiration month DX 

Contract on the USDX. The Long Index 

is created by taking a long position in 

a DX Contract. As a result, the Long 

Index will reflect the performance of the 

DX Contract, i.e., the percentage gain or 

loss sustained by the DX Contract. 

Conversely, the Short Index is created 

by taking a short position in a DX 

Contract. The Short Index will reflect 

the inverse of the performance of the DX 

Contract, i.e., the inverse of the 

percentage gain or loss sustained by the 

DX Contract. The Master Bullish Fund 

will invest in long positions in DX 

Contracts, while the Master Bearish 

Fund will invest in short positions in 

DX Contracts. Each of the Funds and 

each of the Master Funds are 

commodity pools operated by DB 

Commodity Services LLC (the 

‘‘Managing Owner’’). The Managing 

Owner is registered as a commodity 

pool operator (‘‘CPO’’) and commodity 

trading advisor (‘‘CTA’’) with the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) and a member of 

the National Futures Association 

(‘‘NFA’’). 

The Master Funds will include U.S. 

Treasury securities for margin purposes 

and other high-credit-quality, short-term 

fixed income securities. The Exchange 

states that the Master Funds are not 

‘‘actively managed,’’ which typically 

means effecting changes in the 

composition of a portfolio on the basis 

of judgment relating to economic, 

financial, and market considerations 

with a view to obtaining positive results 

under all market conditions. Rather, the 

Master Funds seek to track the 

performance of their respective Indexes. 

The Exchange submits that Commentary 

.07 to Amex Rule 1202 accommodates 

the listing and trading of the Shares. 

Introduction 

In January 2006, the Commission 

approved Commentary .07 to Amex 

Rule 1202, which expanded the ability 

of the Exchange to list and trade TIRs 

based on a portfolio of underlying 

investments.3 The Exchange recently 

commenced the trading of shares of both 

the PowerShares DB Commodity Index 

Tracking Fund 4 and the PowerShares 

DB G10 Currency Harvest Fund 

(formerly known as the DB Currency 

Index Value Fund) 5 pursuant to this 

Commentary .07 to Amex Rule 1202. 

The Exchange notes that the 

Commission has permitted Amex to list 

and trade other products linked to the 

performance of underlying currencies 

and commodities.6 In the instant 

proposal, the Exchange proposes to list 

and trade the Shares pursuant to such 

rule. 

Under Commentary .07(c) to Amex 

Rule 1202, the Exchange may list and 

trade TIRs investing in Investment 

Shares such as the Shares. The Shares 

will conform to the initial and 

continued listing criteria under 

Commentary .07(d) to Amex Rule 1202. 

Each of the Funds will be formed as a 

separate series of a Delaware statutory 

trust pursuant to a Certificate of Trust 

and a Declaration of Trust and Trust 

Agreement among Wilmington Trust 

Company, as trustee, the Managing 

Owner, and the holders of the Shares.7

Description of the Indexes 

Both the Long Index and Short Index 

are designed to reflect the return from 

investing in the first-to-expire (i.e., 

nearest-expiration-month) DX Contract, 

whose performance is tied to the 

USDX. The first-to-expire DX Contract 

is the futures contract that expires in 

March, June, September, or December. 

DX Contracts are traded through the 

FINEX currency markets of the New 

York Board of Trade (‘‘NYBOT’’).8

The Long Index is created by taking 

a long position in a DX Contract. As a 

result, the Long Index will reflect the 

performance of the DX Contract, i.e., the 

percentage gain or loss sustained by the 

DX Contract. The use of long positions 

in DX Contracts in the construction of 

the Long Index will cause the Long 

Index level to rise as a result of any 

upward price movement in the DX 

Contracts. This would reflect any rise of 

the U.S Dollar (‘‘USD’’) versus the 

underlying basket of Index Currencies 

(as defined herein). An example of the 

Long Index methodology is as follows: 

Assume that the USDX index level is 

100, and the price of the DX Contract is 

currently $2. The notional DX Contract 

amount (or number of DX contracts 

bought for the Long Index) would be 50. 

The DX Contract value would be 50 

multiplied by $2 and equal to the 

USDX level. In the case of the Long 

Index, 50 DX Contracts would be 

purchased in order to be fully invested. 

The Long Index would accordingly be 

adjusted to account for the long position 

in the additional DX Contracts. The 

calculation of the Long Index level each 

trading day would be as follows: Long 

Index level = Number of DX Contractst-1

× (DX Contract Pricet¥DX Contract 

Pricet-1) + Long Index levelt-1. For 

purposes of the example, the Long Index 

level would be calculated to be 125, 

where the number of DX Contractst-1 is 

50 (Long Index levelt-1/DX Contract 

Pricet-1), the DX Contract Pricet is 2.5, 

the DX Contract Pricet-1 is 2, and the 

Long Index levelt-1 is 100.9

Conversely, the Short Index is created 

by taking a short position in a DX 

Contract. The Short Index will reflect 

the inverse of the performance of the DX 

Contract, i.e., the inverse of the 

percentage gain or loss sustained by the 

DX Contract. The use of short positions 

in DX Contracts in the construction of 

the Short Index causes the Short Index 

level to rise as a result of any downward 

price movement in the DX Contracts. 

This would reflect any fall of the USD 

versus the underlying basket of Index 

Currencies. Using the example above, 50 

DX Contracts would be sold to maintain 


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Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 3173 

10 Id. 

11The Exchange states that March 1973 was 

chosen as the base period of the USDX because it 

represents a significant milestone in foreign 

exchange history when the world’s major trading 

nations allowed their currencies to float freely 

against each other. 

12The Index Sponsor has in place procedures to 

prevent the improper sharing of information 

between different affiliates and departments. 

Specifically, an information barrier exists between 

the personnel of the Index Sponsor that calculate 

and reconstitute the Indexes and other personnel of 

the Index Sponsor, including, without limitation, 

the Managing Owner, employees involved in sales 

and trading activities, external or internal fund 

managers, and bank personnel who are involved in 

hedging the bank’s exposure to instruments linked 

to the Indexes, in order to prevent the improper 

sharing of information relating to the composition 

and calculation of the Indexes. 

13While the Indexes are calculated and 

disseminated by the Index Sponsor, an affiliate of 

a registered broker-dealer, a number of independent 

sources verify both the intraday and closing Index 

values, and the Index Sponsor uses independent 

feeds from Reuters to verify all NYBOT pricing 

information used to calculate the Indexes. 

14The third Wednesday of each month of March, 

June, September, and December are the traditional 

settlement dates in the International Money Market 

(‘‘IMM Dates’’). Due to the ‘‘rolling’’ characteristic 

of the Long and Short Indexes, the potential returns 

will be compounded, unlike a traditional futures 

contract, which would expire at the end of its term. 

15The Exchange represents that The Options 

Clearing Corporation (‘‘OCC’’), pursuant to Article 

XVII, Section 4 of its By-Laws, is permitted to use 

the prior day’s closing price to fix an index options 

exercise settlement value. In addition, the Exchange 

submits that OCC may also use the next day’s 

opening price, a price or value at such other time 

as determined by OCC, or an average of prices or 

values as determined by OCC. 

the appropriate short position in the DX 

Contract. The calculation of the Short 

Index level each trading day would 

similarly be as follows: Short Index 

level = Number of DX Contractst-1 × (DX 

Contract Pricet¥DX Contract Pricet-1) +/ 

¥Short Index levelt-1. The only 

difference in the case of the Short Index 

is that the DX Contract value would be 

negative due to the short position in the 

DX Contract. For purposes of the 

example, the Short Index level would be 

calculated to be 75, where the number 

of DX Contractst-1 is ¥50 (Short Index 

levelt-1/DX Contract Pricet-1), the DX 

Contract Pricet is 2.5, the DX Contract 

Pricet-1 is 2, and the Short Index levelt-1

is 100.10 Due to the ‘‘rolling’’

characteristic of the Long and Short 

Indexes (as described in more detail 

herein), the potential returns will be 

compounded, unlike a traditional 

futures contract, which would expire at 

the end of its term. 

The performance of the DX Contracts 

is related to the six underlying 

currencies (the ‘‘Index Currencies’’) of 

the USDX. The Index Currencies are 

the Euro, Japanese Yen, British Pound, 

Canadian Dollar, Swedish Krona, and 

Swiss Franc. These currencies represent 

the currencies of the major trading 

partners of the United States. The 

USDX is composed of notional 

amounts of each Index Currency 

reflecting a geometric average of the 

change in the Index Currencies’

exchange rates against the USD relative 

to those as of March 1973.11 The USDX

provides a general indication of the 

international value of the USD by 

averaging the exchange rates between 

the USD and the Index Currencies. The 

USDX is calculated 24 hours a day 

based on exchange rates supplied to 

Reuters by 500 banks worldwide. 

The sponsor of the Indexes is 

Deutsche Bank AG London (the ‘‘Index 

Sponsor’’). The Indexes are calculated 

by the Index Sponsor during the trading 

day on the basis of the most recently 

reported trade price for the DX 

Contract.12 The market value of the 

Indexes during the trading day will be 

equal to the number of DX Contracts 

represented in the Indexes, multiplied 

by the real-time DX Contract price. As 

described below, the Index levels will 

be calculated and disseminated at least 

every 15 seconds.13 The closing level of 

the Indexes is calculated by the Index 

Sponsor on the basis of the closing price 

for the DX Contract and applying such 

price to the relevant notional amount. 

The Indexes include provisions for the 

replacement of expiring DX Contracts. 

The DX Contracts will be rolled 

quarterly on the Index Roll Day, which 

is defined as the Wednesday prior to the 

applicable IMM Date.14 The procedure 

for replacing expiring DX Contracts 

occurs as follows: (1) The DX Contract 

that expires on the next IMM Date is 

sold, and (2) a position in the DX 

Contract that expires on the IMM Date 

following the next IMM Date is 

purchased. 

The following table reflects the base 

weights for each Index Currency as of 

March 1973 with respect to the USDX: 

Index currency Base weight 

(%) 

Euro ...................................... 57.60 

Japanese Yen ....................... 13.60 

British Pound ........................ 11.90 

Canadian Dollar .................... 9.10 

Swedish Krona ..................... 4.20 

Swiss Franc .......................... 3.60 

If prices for the DX Contract are not 

available, the Index Sponsor will 

typically use the prior day’s DX 

Contract price. In exceptional cases 

(such as when a daily price limit is 

reached), the Index Sponsor may 

employ a ‘‘fair value’’ price (i.e., the 

price for unwinding the futures position 

by over-the-counter or ‘‘OTC’’ dealers). 

This is similar to the case of index 

options whose prices are unavailable or 

unreliable.15

The Managing Owner represents that 

it will seek to arrange to have each 

Index calculated and disseminated at 

least every 15 seconds on a daily basis 

through a third party if the Index 

Sponsor ceases to calculate and 

disseminate an Index. If, however, the 

Managing Owner is unable to arrange 

the calculation and dissemination of 

any Index value, the Exchange will 

undertake to delist the Shares related to 

such Index. 

Structure of the Funds 

Funds. The Bullish and Bearish 

Funds are separate series of a statutory 

trust formed pursuant to the Delaware 

Statutory Trust Act and will issue units 

of beneficial interests or shares that 

represent units of fractional undivided 

beneficial interests in and ownership of 

the respective Fund. Unless terminated 

earlier, each of the Funds is of a 

perpetual duration. The investment 

objective of each of the Bullish and 

Bearish Funds is to reflect the 

performance of the corresponding Long 

Index and Short Index, respectively, less 

the expenses of the operations of such 

Fund and the related Master Fund. Each 

of the Funds will pursue its investment 

objective by investing substantially all 

of its assets in the respective Master 

Funds. Each of the Shares will correlate 

with a corresponding Master Fund unit 

issued by the relevant Master Fund and 

held by the respective Funds. 

Master Funds. Each of the Master 

Funds is a separate series of a statutory 

trust formed pursuant to the Delaware 

Statutory Trust Act and will issue units 

of beneficial interests or shares that 

represent units of fractional undivided 

beneficial interests in and ownership of 

the respective Master Fund. Unless 

terminated earlier, each of the Master 

Funds is of a perpetual duration. The 

investment objective of each of the 

Bullish and Bearish Master Funds is to 

reflect the performance of the 

corresponding Long Index and Short 

Index, respectively, less the expenses of 

the operations of the relevant Fund and 

Master Fund. Each of the Master Funds 

will pursue its investment objective by 

investing primarily in DX Contracts. In 

addition, the Master Funds will also 

hold cash and U.S. Treasury securities 

for deposit with futures commission 

merchants (‘‘FCM’’) as margin and other 

high-credit-quality, short-term fixed 

income securities. 

Trustee. Wilmington Trust Company 

is the trustee (the ‘‘Trustee’’) of the 

Trust and the Master Trust. The Trustee 


pwalker on PROD1PC71 with NOTICES
3174 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 

16NAV is the total assets of each Master Fund, 

less total liabilities of such Master Fund, 

determined on the basis of generally accepted 

accounting principles. NAV per Master Fund share 

is the NAV of the relevant Master Fund, divided by 

the number of outstanding Master Fund units. This 

will be the same for the Shares because of the oneto-one correlation between the Shares and the units 

of the corresponding Master Fund. 

17An ‘‘Authorized Participant’’ is a person, who 

at the time of submitting to the trustee an order to 

create or redeem one or more Baskets, (1) is a 

registered broker-dealer, (2) is a Depository Trust 

Company (‘‘DTC’’) participant or an indirect 

participant, and (3) has in effect a valid participant 

agreement. 

18Each Master Fund is permitted to invest its 

assets in those futures contracts (DX Contracts) 

traded on futures exchanges that either have a 

comprehensive surveillance sharing agreement with 

the Exchange or are members of the Intermarket 

Surveillance Group (‘‘ISG’’). 

19The Shares are separate and distinct from the 

shares of the Master Funds consisting primarily of 

DX Contracts. The Exchange expects that the 

number of outstanding Shares will increase and 

decrease as a result of creations and redemptions 

of Baskets. 

has delegated to the Managing Owner 

the power and authority to manage and 

operate the day-to-day affairs of each of 

the Funds and the Master Funds. 

Managing Owner. The Managing 

Owner is a Delaware limited liability 

company which is registered with the 

CFTC as a CPO and CTA and is whollyowned by the Index Sponsor. The 

Managing Owner will serve as the CPO 

and CTA of each Fund and each Master 

Fund and will manage and control all 

aspects of the business of the Funds. 

The Exchange states that the Managing 

Owner, as a registered CPO and CTA, is 

required to comply with various 

regulatory requirements under the 

Commodity Exchange Act and the rules 

and regulations of the CFTC and the 

NFA, including investor protection 

requirements, anti-fraud prohibitions, 

disclosure requirements, and reporting 

and recordkeeping requirements, and is 

subject to periodic inspections and 

audits by the CFTC and NFA. 

Commodity Broker or Clearing Broker. 

Deutsche Bank Securities Inc. (the 

‘‘Commodity Broker’’ or the ‘‘Clearing 

Broker’’) is an affiliate of the Managing 

Owner and is registered with the CFTC 

as a FCM. The Clearing Broker will 

execute and clear each Master Fund’s 

futures contract transactions and will 

perform certain administrative services 

for each Master Fund. 

Administrator. The Bank of New York 

is the administrator for all of the Funds 

and the Master Funds (the 

‘‘Administrator’’). The Administrator 

will perform or supervise the 

performance of services necessary for 

the operation and administration of 

each Fund and each Master Fund. These 

services include, but are not limited to, 

receiving and processing orders from 

Authorized Participants (as defined 

herein) to create and redeem Baskets (as 

defined herein), accounting, net asset 

value (‘‘NAV’’) 16 calculations, and other 

fund administrative services. 

Distributor. ALPS Distributors, Inc. is 

the distributor for both the Funds and 

the Master Funds (the ‘‘Distributor’’). 

The Distributor will assist the Managing 

Owner and the Administrator with 

certain functions and duties relating to 

distribution of the funds, including 

reviewing and filing marketing materials 

with NASD, fielding investor calls, and 

distributing prospectuses. 

Product Description 

A. Creation and Redemption of Shares 

Issuances of the Shares will be made 

only in one or more blocks of 200,000 

Shares (each such block, a ‘‘Basket’’). 

Each of the Funds will issue and redeem 

Shares on a continuous basis, by or 

through participants that have entered 

into participant agreements (each, an 

‘‘Authorized Participant’’) 17 with the 

Managing Owner at the NAV per Share 

next determined after an order to 

purchase the Shares in a Basket is 

received in proper form. Following 

issuance, the Shares will be traded on 

the Exchange similar to other equity 

securities. The Shares will be registered 

in book entry form through DTC. 

Baskets will be issued in exchange for 

a cash amount equal to the NAV per 

Share times 200,000 Shares (the ‘‘Basket 

Amount’’). The Basket Amount will be 

determined on each business day by the 

Administrator. Authorized Participants 

that wish to purchase a Basket must 

transfer the Basket Amount to the 

Administrator (the ‘‘Cash Deposit 

Amount’’). Authorized Participants that 

wish to redeem a Basket will receive 

cash in exchange for each Basket 

surrendered in an amount equal to the 

NAV per Basket (the ‘‘Cash Redemption 

Amount’’). The Commodity Broker will 

be the custodian for the Master Funds 

and responsible for safekeeping the 

Master Funds’ assets. 

All purchase orders received by the 

Administrator prior to 1 p.m. ET will be 

settled by depositing with the 

Commodity Broker the Cash Deposit 

Amount disseminated by the 

Administrator shortly after 10 a.m. ET 

on the next business day. The Basket 

will be issued at noon on such business 

day (T+1) at the NAV as of the later of 

the closing time on the Exchange or the 

last to close futures exchange on which 

a Master Fund’s assets are traded.18 The 

Basket Amount necessary for the 

creation of a Basket will change from 

day to day. On each day that the 

Exchange is open for regular trading, the 

Administrator will adjust the Cash 

Deposit Amount as appropriate to 

reflect the prior day’s NAV and accrued 

expenses. The Administrator will 

determine the Cash Deposit Amount for 

a given business day by multiplying the 

NAV for each Share by the number of 

Shares in each Basket (200,000). 

Likewise, all redemption orders 

received by the Administrator prior to 1 

p.m. ET will be settled by the 

Commodity Broker’s payment of the 

Cash Redemption Amount shortly after 

10 a.m. ET on the next business day. 

The Shares will not be individually 

redeemable, but will be redeemable only 

in Baskets. To redeem, an Authorized 

Participant will be required to 

accumulate enough Shares to constitute 

a Basket (i.e., 200,000 shares). Upon the 

surrender of the Shares and payment of 

applicable redemption transaction fees, 

taxes, or charges, the Administrator will 

deliver to the redeeming Authorized 

Participant the Cash Redemption 

Amount. 

On each business day, the 

Administrator will make available 

immediately prior to the opening of 

trading on Amex via the facilities of the 

Consolidated Tape (‘‘CT’’), the most 

recent Basket Amount for the creation of 

a Basket. The Exchange will disseminate 

at least every 15 seconds throughout the 

trading day, via the CT, an amount 

representing on a per-Share basis, the 

current value of the Basket Amount. It 

is anticipated that the deposit of the 

Cash Deposit Amount in exchange for a 

Basket will be made primarily by 

institutional investors, arbitrageurs, and 

the Exchange specialist. Baskets are 

then separable upon issuance into 

identical Shares that will be listed and 

traded on the Exchange.19 The Exchange 

states that the Shares are expected to be 

traded on the Exchange by 

professionals, as well as institutional 

and retail investors. Thus, the Shares 

may be acquired in two ways: (1) 

Through a deposit of the Cash Deposit 

Amount with the Administrator during 

normal business hours by Authorized 

Participants, or (2) through a purchase 

on the Exchange by investors. Trading 

in the Shares on the Exchange will be 

effected until 4:15 p.m. ET each 

business day. The minimum trading 

increment for such shares will be $0.01. 

Deutsche Bank Securities Inc., as the 

initial purchaser (the ‘‘Initial 

Purchaser’’), will initially purchase and 

take delivery of 200,000 Shares of each 

Fund, which comprises the initial 

Basket of each Fund, at a purchase price 

of $25 per share ($5 million per Basket) 

pursuant to an Initial Purchaser 


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Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 3175 

20 If the NAV is not disseminated to all market 

participants at the same time, the Exchange will 

halt trading in the Shares of a Fund. 21See supra note 18. 

22See supra note 12. 

23The bid-ask price of the Shares is determined 

by using the highest bid and lowest offer as of the 

time of calculation of the NAV. 

Agreement. The Exchange states that the 

Initial Purchaser proposes to offer to the 

public these Shares at a per-share 

offering price that will vary depending 

on, among other factors, the respective 

trading price of the Shares on Amex, the 

NAV per Share, and the supply of and 

demand for the Shares at the time of the 

offer. Shares offered by the Initial 

Purchaser at different times may have 

different offering prices. The Initial 

Purchaser will not receive from any 

Fund, the Managing Owner, or any of 

their affiliates, any fee or other 

compensation in connection with the 

sale of these Shares to the public. The 

Initial Purchaser may charge a 

customary brokerage commission. 

The Managing Owner has agreed to 

indemnify certain parties against certain 

liabilities, including liabilities under the 

Securities Act of 1933, and to contribute 

to payments that such parties may be 

required to make in respect thereof. The 

Exchange believes that the anticipated 

minimum number of Shares of each of 

the Funds outstanding at the start of 

trading is sufficient to provide adequate 

market liquidity and to further the 

objectives of the respective Funds. 

B. Net Asset Value (NAV) 

Shortly 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 long 

positions in the DX Contracts, in the 

case of the Bullish Funds, and short 

positions in the DX Contracts, in the 

case of the Bearish Funds. At or about 

4 p.m. ET each business day, the 

Administrator will determine the Basket 

Amounts for orders placed by 

Authorized Participants received before 

1 p.m. ET that day. Thus, although 

Authorized Participants may place valid 

orders to purchase Shares throughout 

the trading day until 1 p.m. ET, the 

actual Basket Amounts are determined 

at 4 p.m. ET or shortly thereafter. 

Shortly after 4 p.m. ET each business 

day, the Administrator, Amex, and the 

Managing Owner will disseminate the 

NAV per Share and the Basket Amounts 

(for orders placed during the day). The 

Basket Amounts and the NAV are 

communicated by the Administrator to 

all Authorized Participants via facsimile 

or electronic mail message and will be 

available on the Index Sponsor’s Web 

site at http://www.index.db.com.20

Amex will also disclose the NAV and 

Basket Amounts on its own Web site at 

http://www.amex.com. 

In calculating the NAV, the 

Administrator will value all futures 

contracts (e.g., the DX Contracts) based 

on that day’s settlement price. However, 

if a futures contract on a trading day 

cannot be liquidated due to the 

operation of daily limits or other rules 

of an exchange upon which such futures 

contract is traded,21 the settlement price 

on the most recent trading day on which 

such futures contract could have been 

liquidated will be used in determining 

each Master Fund’s NAV. Accordingly, 

the Administrator will typically use that 

day’s futures settlement price for 

determining NAV. When calculating 

NAV for each of the Funds and each of 

the Master Funds, the Administrator 

will value the DX Contracts held by 

each Master Fund on the basis of their 

then current market value. 

The NAV for the Funds is total assets 

of the corresponding Master Fund, less 

total liabilities of such Master Fund. 

The NAV is calculated by including any 

unrealized profit or loss on futures 

contracts and any other credit or debit 

accruing to such Master Fund but 

unpaid or not received by the Master 

Fund. The NAV is then used to compute 

all fees (including the management and 

administrative fees) that are calculated 

from the value of such Master Fund’s 

assets. The Administrator will calculate 

the NAV per share by dividing the NAV 

by the corresponding number of Shares 

outstanding. 

The Exchange believes that none of 

the Shares will trade at a material 

discount or premium to the Shares of 

the corresponding Master Fund held by 

the corresponding Fund based on 

potential arbitrage opportunities. 

Because Shares can be created and 

redeemed only in Basket Amounts at the 

relevant NAV, the Exchange submits 

that arbitrage opportunities should 

provide a mechanism to mitigate the 

effect of any premiums or discounts that 

may exist from time to time. The value 

of a Share may be influenced by nonconcurrent trading hours between Amex 

and the various futures exchanges on 

which the Index Currencies are traded. 

As a result, during periods when Amex 

is open and the futures exchanges on 

which the Index Currencies are traded 

are closed, trading spreads and the 

resulting premium or discount on the 

Shares may widen, and, therefore, 

increase the difference between the 

price of the Shares and the 

corresponding NAV. 

Dissemination of the Indexes and 

Underlying DX Contract Information 

The values of the Long Index and 

Short Index will be disseminated at 

least every 15 seconds through CT/CQ 

High Speed Lines, Reuters, and/or 

Bloomberg, and on the Managing 

Owner’s Web site at http:// 

www.dbfunds.db.com. The Index 

Sponsor will similarly provide intra-day 

levels and the related closing levels for 

the Indexes at its Web site at http:// 

www.index.db.com. The disseminated 

value of the Indexes will not reflect 

changes to the prices of the Index 

Currencies between the close of trading 

of the DX Contract on NYBOT at 3 p.m. 

ET and close of trading at Amex at 4:15 

p.m. ET. In addition, the Index 

Sponsor 22 and the Exchange on their 

respective Web sites will also provide 

any adjustments or changes to any of the 

Indexes. 

The daily settlement prices of the DX 

Contracts held by each of the Master 

Funds are publicly available on 

NYBOT’s Web site (http:// 

www.nybot.com). In addition, various 

data vendors and news publications 

publish futures prices and data. The 

Exchange represents that futures quotes 

and last sale information for the DX 

Contracts are widely disseminated 

through a variety of major market data 

vendors worldwide, including 

Bloomberg and Reuters. In addition, the 

Exchange further represents that 

complete real-time data for such futures 

is available by subscription from 

Reuters and Bloomberg. NYBOT also 

provides delayed futures information on 

current and past trading sessions and 

market news free of charge on its Web 

site. The specific contract specifications 

for the DX Contracts are also available 

from NYBOT on its Web site, as well as 

other financial informational sources. 

Availability of Information Regarding 

the Shares 

The Web site for each of the Funds 

(http://www.dbfunds.db.com) and/or the 

Exchange, which are publicly accessible 

at no charge, will contain the following 

information: (1) the current NAV per 

Share daily, the prior business day’s 

NAV, and the reported closing price; (2) 

the mid-point of the bid-ask price 23 in 

relation to the NAV as of the time the 

NAV is calculated (the ‘‘Bid-Ask 

Price’’); (3) the calculation of the 

premium or discount of such price 

against such NAV; (4) data in chart form 

displaying the frequency distribution of 


pwalker on PROD1PC71 with NOTICES
3176 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 

24 17 CFR 240.10A–3. 

discounts and premiums of the Bid-Ask 

Price against the NAV, within 

appropriate ranges for each of the four 

previous calendar quarters; (5) the 

prospectus; and (6) other applicable 

quantitative information. 

The respective NAV per Share for the 

Funds will be calculated and 

disseminated daily by the 

Administrator. Amex also intends to 

disseminate for each of the Funds on a 

daily basis by means of CT/CQ High 

Speed Lines information with respect to 

the corresponding Indicative Fund 

Value (as discussed below), recent NAV, 

and Shares outstanding. The Exchange 

will also make available on its Web site 

daily trading volume of each of the 

Shares, closing prices of such Shares, 

and the corresponding NAV. The 

closing price and settlement prices of 

the DX Contracts held by the Master 

Funds are also readily available from 

NYBOT, automated quotation systems, 

published or other public sources, or 

on-line information services such as 

Bloomberg or Reuters. In addition, the 

Exchange will provide a hyperlink on 

its Web site at http://www.amex.com to 

the Index Sponsor’s Web site at http:// 

www.index.db.com. 

Dissemination of Indicative Fund Value 

As noted above, the Administrator 

calculates the NAV of each of the Funds 

once each trading day and disseminates 

such NAV to market participants. The 

Exchange represents that it will obtain 

a representation prior to the listing of 

the Funds from the Trust that the NAV 

per Share for each of the Funds will be 

made available to all market 

participants at the same time. In 

addition, the Administrator causes to be 

made available on a daily basis the 

corresponding Cash Deposit Amounts to 

be deposited in connection with the 

issuance of the respective Shares in 

Baskets. Moreover, other investors can 

request such information directly from 

the Administrator. 

In order to provide updated 

information relating to each of the 

Funds for use by investors, 

professionals, and persons wishing to 

create or redeem the Shares, the 

Exchange will disseminate through the 

facilities of CT, an updated Indicative 

Fund Value (the ‘‘Indicative Fund 

Value’’) for each of the Funds. The 

respective Indicative Fund Values will 

be disseminated on a per-Share basis at 

least every 15 seconds during regular 

Amex trading hours of 9:30 a.m. to 4:15 

p.m. ET. The Indicative Fund Value will 

be calculated based on the cash required 

for creations and redemptions (i.e., NAV 

per Share × 200,000 Shares) for each 

Fund, adjusted to reflect the price 

changes of the DX Contracts and the 

holdings of U.S. Treasury securities and 

other high-credit-quality, short-term 

fixed income securities. 

The Indicative Fund Value will not 

reflect price changes to the DX Contracts 

between the close of trading on NYBOT 

at 3 p.m. ET and the close of trading on 

Amex at 4:15 p.m. ET. The value of a 

Share may accordingly be influenced by 

non-concurrent trading hours between 

Amex and NYBOT. 

While NYBOT is open for trading of 

DX Contracts, the respective Indicative 

Fund Values can be expected to closely 

approximate the value per Share of the 

corresponding Basket Amount. 

However, during Amex trading hours, 

when the DX Contracts have ceased 

trading, spreads and resulting premiums 

or discounts may widen, and therefore, 

increase the difference between the 

price of the Shares and the NAV of such 

Shares. Any Indicative Fund Value on a 

per Share basis disseminated during 

Amex trading hours should not be 

viewed as a real-time update of its 

corresponding NAV, which is calculated 

only once a day. 

The Exchange believes that 

dissemination of the Indicative Fund 

Value based on the cash amount 

required for its corresponding Baskets 

provides additional information that is 

not otherwise available to the public 

and is useful to professionals and 

investors in connection with the related 

Shares trading on the Exchange or the 

creation or redemption of such Shares. 

Termination Events 

A Fund would be terminated if any of 

the following circumstances occur: (1) 

The filing of a certificate of dissolution 

or revocation of the Managing Owner’s 

charter (subject to a 90-day notice 

period) or upon the withdrawal, 

removal, adjudication, or admission of 

bankruptcy or insolvency of the 

Managing Owner, or an event of 

withdrawal, subject to exceptions; (2) 

the occurrence of any event which 

would make unlawful the continued 

existence of the Trust or any Fund, as 

the case may be; (3) the event of the 

suspension, revocation, or termination 

of the Managing Owner’s registration as 

a CPO, or membership as a CPO with 

the NFA, subject to certain conditions; 

(4) the Trust or any Fund, as the case 

may be, becomes insolvent or bankrupt; 

(5) shareholders holding Shares 

representing at least 50% of the NAV 

(excluding the Shares of the Managing 

Owner) notify the Managing Owner that 

they wish to dissolve the Trust; (6) the 

determination of the Managing Owner 

that the aggregate net assets of a Fund 

in relation to the operating expenses of 

such Fund make it unreasonable or 

imprudent to continue the business of 

such Fund, or, in the exercise of its 

reasonable discretion, the determination 

by the Managing Owner to dissolve the 

Trust because the aggregate NAV of the 

Trust as of the close of business on any 

business day declines below $10 

million; (7) the Trust or any Fund 

becomes required to register as an 

investment company under the 1940 

Act; or (8) DTC is unable or unwilling 

to continue to perform its functions, and 

a compatible replacement is 

unavailable. 

If not terminated earlier, each Fund 

will endure perpetually. Upon 

termination of any Fund, holders of the 

relevant Shares will surrender their 

Shares and receive from the 

Administrator, in cash, their portion of 

the value of such Fund. 

Listing and Trading Rules 

Each of the Funds will be subject to 

the criteria in Commentary .07(d) of 

Amex Rule 1202 for initial and 

continued listing of their respective 

Shares. The Exchange represents that, 

for purposes of the initial and continued 

listing of the Shares, the Shares must be 

in compliance with Section 803 of the 

Amex Company Guide and Rule 10A–3 

under the Act.24 The Amex original 

listing fee applicable to the listing of the 

Shares of the Funds is $5,000 per Fund. 

In addition, the annual listing fee 

applicable under Section 141 of the 

Amex Company Guide will be based 

upon the year-end aggregate number of 

Shares in all the Funds outstanding at 

the end of each calendar year. 

The Shares are equity securities 

subject to Amex rules governing the 

trading of equity securities, including, 

among others, rules governing priority, 

parity, and precedence of orders, 

specialist responsibilities and account 

opening, and customer suitability 

(Amex Rule 411). Initial equity margin 

requirements of 50% will apply to 

transactions in the Shares. Shares will 

trade on Amex until 4:15 p.m. ET each 

business day and will trade in a 

minimum price variation of $0.01 

pursuant to Amex Rule 127. Trading 

rules pertaining to odd-lot trading in 

Amex equities (Amex Rule 205) will 

also apply. 

Amex Rule 154, Commentary .04(c), 

provides that stop and stop limit orders 

to buy or sell a security (other than an 

option, which is covered by Amex Rule 

950(f) and Commentary thereto), the 

price of which is derivatively priced 

based upon another security or index of 

securities, may with the prior approval 


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Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 3177 

25See Securities Exchange Act Release No. 29063 

(April 10, 1991), 56 FR 15652 (April 17, 1991) (SR–

Amex–90–31) at note 9 (noting the Exchange’s 

designation of equity derivative securities as 

eligible for such treatment under Amex Rule 154, 

Commentary .04(c)). 

26The term ‘‘Eligible Security’’ means any 

security admitted to dealings on a participating 

market center which has been designated as eligible 

to be traded through the intermarket 

communications system. See Amex Rule 230. 

27See Commentary .05 to Amex Rule 190. 

28See Letter in Response to Request for NoAction from Racquel Russell, Branch Chief, Office 

of Trading Practices and Processing, Division, 

Commission, to George T. Simon, Esq., Foley & 

Lardner LLP, dated June 21, 2006 (‘‘Simon Letter’’) 

(indicating that the staff of the Division will no 

longer respond to requests for relief from Rule 10a–

1 under the Act relating to other similar 

commodity-based investment vehicles, unless they 

present novel or unusual issues). The Exchange 

submits that the Shares qualify for the relief set 

forth in the Simon Letter. 

29 15 U.S.C. 78f. 

30 15 U.S.C. 78f(b)(5). 

of a floor official, be elected by a 

quotation, as set forth in Commentary 

.04(c)(i–v). The Exchange has 

designated the Shares as eligible for this 

treatment.25

The Shares will be deemed to be 

‘‘Eligible Securities,’’ as defined in 

Amex Rule 230,26 for purposes of the 

Intermarket Trading System (‘‘ITS’’) 

Plan and therefore will be subject to the 

trade-through provisions of Amex Rule 

236, which requires that Amex members 

avoid initiating traded through for ITS 

securities. 

Specialist transactions of the Shares 

made in connection with the creation 

and redemption of Shares will not be 

subject to the prohibitions of Amex Rule 

190.27 The Shares will not be subject to 

the short sale rule pursuant to no-action 

relief granted in petition to Rule 10a–1 

under the Act.28 The Shares will 

generally be subject to the Exchange’s 

stabilization rule, Amex Rule 170, 

except that specialists may buy on ‘‘plus 

ticks’’ and sell on ‘‘minus ticks,’’ in 

order to bring the Shares into parity 

with the underlying commodity or 

commodities and/or futures contract 

price. Commentary .07(f) to Amex Rule 

1202 sets forth this limited exception to 

Amex Rule 170. In addition, the trading 

of the Shares will be subject to certain 

conflict-of-interest provisions set forth 

in Commentary .07(e) to Amex Rule 

1202. 

Suitability 

The Information Circular (as 

described below) will inform members 

and member organizations of the 

characteristics of the Funds and of 

applicable Exchange rules, as well as of 

the requirements of Amex Rule 411 

(Duty to Know and Approve 

Customers). The Exchange notes that, 

pursuant to Amex Rule 411, members 

and member organizations are required 

in connection with recommending 

transactions in the Shares to have a 

reasonable basis to believe that a 

customer is suitable for the particular 

investment given reasonable inquiry 

concerning the customer’s investment 

objectives, financial situation, needs, 

and any other information known by 

such member. 

Information Circular 

Amex will distribute an Information 

Circular to its members in connection 

with the trading of the Shares. The 

Circular will discuss the special 

characteristics and risks of trading this 

type of security, such as currency 

fluctuation risks. Specifically, the 

Circular, among other things, will 

discuss what the Shares are, how a 

Basket is created and redeemed, 

applicable Amex rules, dissemination 

information, and trading information. 

The Circular will also explain that the 

Funds are subject to various fees and 

expenses described in the registration 

statement. The Circular will also 

reference the fact that the CFTC has 

regulatory jurisdiction over the trading 

of futures contracts. 

Moreover, the Information Circular 

will inform members and member 

organizations, prior to commencement 

of trading, of the prospectus delivery 

requirements applicable to the Funds. 

The Exchange notes that investors 

purchasing Shares directly from the 

respective Funds (by delivery of the 

corresponding Cash Deposit Amounts) 

will receive a prospectus. Amex 

members purchasing Shares from the 

corresponding Funds for resale to 

investors will deliver a prospectus to 

such investors. 

In addition, the Information Circular 

will inform Exchange members and 

member organizations that the 

procedures for purchases and 

redemptions of Shares in Basket 

aggregations are described in the 

prospectus and that Shares are not 

individually redeemable, but are 

redeemable only in Basket aggregations 

or multiples thereof. The Circular also 

will advise members of their suitability 

obligations with respect to 

recommended transactions to customers 

in the Shares. The Circular will discuss 

any relief, if granted, by the Commission 

or its staff from any rules under the Act. 

Finally, the Circular will disclose that 

the trading hours of the Shares of the 

Funds will be from 9:30 a.m. to 4:15 

p.m. ET, and that the NAV for the 

Shares of the Funds will be calculated 

shortly after 4 p.m. ET each trading day. 

Information about the Shares of each 

Fund and the corresponding Indexes 

will be publicly available on Amex’s 

Web site and each Fund’s Web site 

(http://www.dbfunds.db.com). 

Surveillance 

The Exchange represents that its 

surveillance procedures are adequate to 

properly monitor the trading of the 

Shares and to deter and detect 

violations of applicable rules. 

Specifically, the Exchange will rely on 

its existing surveillance procedures 

applicable to TIRs, Portfolio Depository 

Receipts, and Index Fund Shares and 

will incorporate and rely upon existing 

Amex surveillance procedures 

governing options and equities. The 

Exchange currently has in place an 

information sharing agreement with 

NYBOT 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 

also notes that NYBOT is a member of 

ISG. As a result, the Exchange asserts 

that market surveillance information is 

available from NYBOT, if necessary, due 

to regulatory concerns that may arise in 

connection with the DX Contracts. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6 of the Act,29

in general, and furthers the objectives of 

Section 6(b)(5),30 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 mechanism of a free and 

open market and a national market 

system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 

The Exchange did not receive any 

written comments on the proposed rule 

change. 


pwalker on PROD1PC71 with NOTICES
3178 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 5 15 U.S.C. 78f. 

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 Amex consents, the 

Commission will: 

(A) By order approve such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

Amex has requested accelerated 

approval of this proposed rule change 

prior to the 30th day after the date of 

publication of the notice of the filing 

thereof. 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 is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (www.sec.gov/rules/ 

sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–Amex–2006–86 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–Amex–2006–86. This file 

number should be included on the 

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

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of the filing also will be 

available for inspection and copying at 

the principal office of 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–Amex–2006–86 and should 

be submitted on or before February 8, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.31

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–954 Filed 1–23–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55119; File No. SR–

NASDAQ–2006–059] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Regarding 

Application of Membership Fees 

January 18, 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 December 

19, 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. 

Nasdaq has filed the proposal pursuant 

to Section 19(b)(3)(A) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to clarify the 

application of periodic membership fees 

under Rule 7001. Nasdaq proposes to 

implement the proposed rule change 

immediately. The text of the proposed 

rule change is available at Nasdaq, the 

Commission’s Public Reference Room, 

and http://www.nasdaq.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, 

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 IV 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 adding text to Rule 7001 to 

clarify the application of its 

membership fees. To simplify the 

administration of these fees, Nasdaq 

imposes the fees on all persons that are 

members as of a date determined by 

Nasdaq: In December of each year, in 

the case of the annual membership fee, 

and a date in the course of the month, 

in the case of the trading rights fee. 

Persons that become Nasdaq members 

after the date on which the fee for a 

particular period is assessed are not 

required to pay the fee for that period. 

Thus, for example, the annual fee for 

2007 will be assessed on December 21, 

2006; persons that become Nasdaq 

members after that date would not pay 

an annual fee for 2007, but would pay 

the annual fee for 2008 if they continue 

to be Nasdaq members on the fee 

assessment date in December 2007. The 

fees are non-refundable. Thus, if a firm 

ceased to be a Nasdaq member during 

the course of 2007, it would not receive 

a refund of all or any portion of the 

annual fee. This process is consistent 

with the long-standing procedures of 

NASD with respect to its periodic 

membership fees that have also been 

adopted by Nasdaq in its transition from 

NASD subsidiary to independent 

exchange. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general, and with Sections 6(b)(4) of the 


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