Federal Register / Vol. 72, No. 95 / Thursday, May 17, 2007 / Notices 27891 

15 15 U.S.C. 78k–1(a)(1)(C)(iii). 

16See Securities Exchange Act Release No. 55386 

(March 2, 2007), 72 FR 10801 (March 9, 2007) (SR–

NASDAQ–2007–016) (the ‘‘Pilot Order’’). 

17 15 U.S.C. 78s(b)(2). 

18 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)(i). 

4 17 CFR 240.19b–4(f)(1). 

class or type of security to which the 

exchange extends UTP. The Exchange 

has represented that it meets this 

requirement because it deems the 

MACRO Tradeable Shares to be equity 

securities, thus rendering trading in the 

MACRO Tradeable Shares subject to the 

Exchange’s existing rules governing the 

trading of equity securities. 

The Commission further believes that 

the proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Act,15 which sets 

forth Congress’ finding that it is in the 

public interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for and 

transactions in securities. Quotations for 

and last sale information regarding the 

MACRO Tradeable Shares are 

disseminated through the facilities of 

the CTA and the Consolidated 

Quotation System. Furthermore, the IIV, 

updated to reflect changes in currency 

exchange rates, is calculated by Amex 

and published via the facilities of the 

Consolidated Tape Association on a 15- 

second delayed basis throughout the 

trading hours for the MACRO Tradeable 

Shares. In addition, if the listing market 

halts trading when the IIV is not being 

calculated or disseminated, the 

Exchange would halt trading in the 

MACRO Tradeable Shares. 

The Commission notes that, if the 

MACRO Tradeable Shares should be 

delisted by the listing exchange, the 

Exchange would no longer have 

authority to trade the MACRO Tradeable 

Shares pursuant to this order. 

In support of this proposal, the 

Exchange has represented that its 

surveillance procedures are adequate to 

properly monitor Exchange trading of 

the MACRO Tradeable Shares. This 

approval order is conditioned on the 

Exchange’s adherence to this 

representation. 

In addition, the Commission recently 

approved the trading of the MACRO 

Tradeable Shares on the Exchange 

pursuant to UTP for a pilot period of 

three months.16 In the Pilot Order, the 

Commission noted that exchanges that 

trade commodity-related securities 

generally have in place surveillance 

arrangements with markets that trade 

the underlying securities. In its proposal 

to trade the MACRO Tradeable Shares 

for a pilot period, the Exchange 

represented that it was in the process of 

completing these surveillance 

arrangements and expected to do so ‘‘in 

the near future.’’ The Exchange recently 

provided the Commission with evidence 

that it has completed these surveillance 

arrangements. 

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 MACRO Tradeable Shares 

on Amex and the trading of the MACRO 

Tradeable Shares on NYSE Arca 

pursuant to UTP are consistent with the 

Act. The Commission presently is not 

aware of any regulatory issue that 

should cause it to revisit those findings 

or would preclude the continued 

trading of the MACRO Tradeable Shares 

on the Exchange pursuant to UTP. 

Therefore, accelerating approval of this 

proposal should benefit investors by 

continuing the additional competition 

in the market for the MACRO Tradeable 

Shares. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–NASDAQ–

2007–048), be and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.18

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E7–9467 Filed 5–16–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55745; File No. SR–NASD–

2007–030] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Trade 

Reporting Obligations for Transactions 

in Foreign Equity Securities 

May 11, 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 April 20, 

2007, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’) 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 

NASD. NASD has designated the 

proposed rule change as ‘‘constituting a 

stated policy, practice, or interpretation 

with respect to the meaning, 

administration, or enforcement of an 

existing rule’’ under Section 

19(b)(3)(A)(i) of the Act3 and Rule 19b–

4(f)(1) thereunder,4 which renders the 

proposal effective upon receipt of this 

filing by 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 

NASD is proposing to adopt a new 

paragraph (g) to Rule 6620 to codify a 

member’s trade reporting obligations 

with respect to transactions in foreign 

equity securities. Below is the text of the 

proposed rule change. Proposed new 

language is in italics; proposed 

deletions are in brackets. 

* * * * * 

6600. OVER–THE–COUNTER EQUITY 

SECURITIES 

* * * * * 

6620. Transaction Reporting 

(a) through (f) No change. 

(g) Transactions in Foreign Equity 

Securities 

(1) For purposes of this paragraph, the 

term ‘‘foreign equity security’’ means 

any OTC Equity Security that is issued 

by a corporation or other entity 

incorporated or organized under the 

laws of any foreign country. 

(2) Transactions in foreign equity 

securities shall be reported to the OTC 

Reporting Facility unless: 

(A) The transaction is executed on 

and reported to a foreign securities 

exchange; or 

(B) the transaction is executed over 

the counter in a foreign country and is 

reported to the regulator of securities 

markets for that country. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASD 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 


pwalker on PROD1PC71 with NOTICES
27892 Federal Register / Vol. 72, No. 95 / Thursday, May 17, 2007 / Notices 

5See NASD Rule 6610(d). 

6The proposed rule change defines ‘‘foreign 

equity security’’ as any OTC Equity Security that is 

issued by a corporation or other entity incorporated 

or organized under the laws of any foreign country. 

7This position was originally taken with respect 

to the end-of-day reporting requirements of nonNasdaq, over-the-counter securities under former 

Schedule H to NASD’s By-Laws. See NASD Notice 

to Members 90–58 (September 1990). It was 

reaffirmed when end-of-day reporting was changed 

to 90-second transaction reporting. See OTC 

Bulletin Board Update (December 1993). 

8 It is important to note, however, that separate 

legs of a riskless principal transaction may be 

subject to different reporting requirements. For 

example, if a member executes a transaction in a 

foreign equity security for a customer on a foreign 

exchange on a riskless principal basis, with the 

initial leg reported by the foreign exchange, the 

member would not be required to report that leg of 

the riskless principal transaction to NASD. 

However, the second leg (i.e., the transaction 

between the member and the customer) would have 

to be reported to NASD on a non-tape basis. 

9NASD also notes that trades reported in the U.S. 

must be reported in U.S. dollars, regardless of the 

currency in which the trade occurred. The 

methodology employed by the member for currency 

conversion is left to the NASD member; however, 

the member should document its practice and 

employ the same method consistently. See OTC 

Bulletin Board Update (December 1993) and Notice 

to Members 90–58 (September 1990). See also 

Notice to Members 06–70, at note 5 (December 

2006) (noting that, for purposes of reporting to the 

Order Audit Trail System, members are ‘‘permitted 

to use reasonable business practices for the 

[currency] conversion; however, members should 

document their practice regarding currency 

conversion and should be consistent in their 

methodology’’). 

10 15 U.S.C. 78o–3(b)(6). 11 17 CFR 240.19b–4. 

may be examined at the places specified 

in Item IV below. NASD has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to codify existing NASD 

guidance regarding an NASD member’s 

trade reporting obligations in 

transactions involving foreign equity 

securities. 

NASD Rule 6620 requires members to 

transmit to the OTC Reporting Facility 

last sale reports of transactions in OTC 

Equity Securities. For purposes of a 

member’s trade reporting obligations 

under Rule 6620, an OTC Equity 

Security is ‘‘any non-exchange-listed 

security and certain exchange-listed 

securities that do not otherwise qualify 

for real-time trade reporting.’’5 This 

broad definition of OTC Equity Security, 

by its terms, would include foreign 

equity securities that are not listed on a 

U.S. securities exchange and that trade 

exclusively in foreign markets. 

The proposed rule filing would codify 

the long-held interpretive position taken 

by NASD that transactions in foreign 

equity securities6 are not subject to the 

trade reporting requirements if (1) the 

transaction is executed on and reported 

to a foreign securities exchange or (2) 

the transaction is executed over the 

counter in a foreign country and is 

reported to the regulator of securities 

markets for that country.7 Transactions 

in foreign equity securities that are not 

reported to a foreign securities exchange 

or, if executed over the counter in a 

foreign country, to a foreign securities 

regulator, must be reported to NASD.8

Although many members are aware of 

and continue to rely on this guidance, 

NASD recently has received a number of 

inquiries relating to foreign equity trade 

reporting requirements. To ensure that 

all members are aware of their trade 

reporting obligations regarding foreign 

equity securities, NASD is proposing to 

codify this guidance so that, going 

forward, the rules themselves 

specifically address foreign equity 

securities.9

NASD has filed the proposed rule 

change for immediate effectiveness. The 

effective date and the implementation 

date will be the date of filing, April 20, 

2007. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,10 which 

requires, among other things, that NASD 

rules must be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest. 

NASD believes that the proposed rule 

change provides needed clarification to 

NASD members regarding their trade 

reporting obligations with respect to 

foreign equity securities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act and paragraph (f) of Rule 

19b–4 thereunder11 because the 

proposed rule change constitutes a 

stated policy, practice, or interpretation 

with respect to the meaning, 

administration, or enforcement of an 

existing rule of NASD. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

may summarily abrogate such rule 

change if it appears to the Commission 

that such action is necessary or 

appropriate in the public interest, for 

the protection of investors, or otherwise 

in furtherance of the purposes of the 

Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

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

Number SR–NASD–2007–030 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASD–2007–030. 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 


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Federal Register / Vol. 72, No. 95 / Thursday, May 17, 2007 / Notices 27893 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 55421 

(March 14, 2007), 72 FR 1350 (the ‘‘Notice’’). 

4Amendment No. 1 (i) Proposed a clarifying 

change to the proposed rule text and (ii) added 

language to the purpose section to clarify the effect 

of the waiver of listing fees for a company listing 

its primary class of common stock that is not listed 

on a national securities exchange but is registered 

under the Act. The text of Amendment No. 1 is 

available on the Exchange’s Web site (http:// 

www.nyse.com), at the Exchange’s Office of the 

Secretary, and at the Commission’s Public 

Reference Room. 

5 In Amendment No. 1, the Exchange stated that 

there may occasionally be an initial listing on the 

Exchange of a company which is trading in the 

over-the-counter market immediately prior to listing 

and which was not previously delisted as a result 

of a failure to timely file annual reports with the 

Commission. However, in the Exchange’s 

experience, very few such companies meet the 

Exchange’s listing requirements and, therefore, the 

Exchange expects the number of such listings and 

the related loss of fee revenue to be immaterial. 

6 In its filing, the Exchange stated that typically, 

such companies are otherwise in good standing 

with the Exchange or with another national 

securities exchange, but fell behind on their 

reporting obligations under the Act because their 

auditors or the Commission required restatements 

of their financial statements. The Commission notes 

that the timely filing of accurate financial reports 

under the Act is critical to investors and our 

national market and assures that investors receive 

up to date financial information about listed 

companies. 

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 NASD. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NASD–2007–030 and 

should be submitted on or before June 

7, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E7–9471 Filed 5–16–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55742; File No. SR–NYSE–

2007–19] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Amendment No. 1 and Order 

Granting Accelerated Approval to a 

Proposed Rule Change as Modified by 

Amendment No. 1 Relating to the 

Waiver of Certain Listing Fees 

May 10, 2007. 

I. Introduction 

On February 22, 2007, the New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposal to 

waive certain listing fees. The proposal 

was published for comment in the 

Federal Register on March 14, 2007.3

The Commission received no comments 

on the proposal. The Exchange filed 

Amendment No. 1 with the Commission 

on April 27, 2007.4 This order provides 

notice of and solicits comment on the 

proposed rule change as modified by 

Amendment No. 1 and approves the 

proposal on an accelerated basis. 

II. Description of the Proposal 

The Exchange proposes to amend 

Section 902.02 of its Listed Company 

Manual (the ‘‘Manual’’) to provide that 

there shall be no initial listing fee 

applicable to (i) Any company listing 

upon emergence from bankruptcy, or (ii) 

any company listing its primary class of 

common stock that is not listed on a 

national securities exchange but is 

registered under the Act. 

The Exchange also proposes a 

temporary cap on fees payable by 

companies listing upon emergence from 

bankruptcy. Annual fees for such 

issuers will be billed at a rate of onefourth of the applicable annual fee rate 

for the fiscal quarter the issuer lists and 

for each of the succeeding 12 full fiscal 

quarters. Further, the total fees 

(including initial listing fees and annual 

fees) that may be billed to such an issuer 

during this period would be subject to 

a $25,000 cap in the fiscal quarter in 

which the issuer lists and in each of the 

succeeding 12 full fiscal quarters. The 

exclusions applicable to the standard 

fee cap, set forth in Section 902.02 

under the heading ‘‘Total Maximum Fee 

Payable in a Calendar Year,’’ would also 

apply to issuers listing upon emergence 

from bankruptcy. 

The Exchange believes that the initial 

listing fee waiver and fee cap for 

companies listing upon emergence from 

bankruptcy are justified by the unique 

circumstances of those issuers, which, 

according to the NYSE, among other 

things, tend to be more sensitive to the 

initial and continued costs associated 

with listing because of the desire in 

bankruptcy proceedings to ensure 

creditors are paid as much as possible. 

According to the Exchange, because 

bankrupt companies face unique 

challenges in the listing process, the 

number of companies that will benefit 

from the fee waiver and lower fee cap 

applicable to bankrupt companies will 

be very limited, and the fee cap will 

apply only during a three-year 

transitional period, the Exchange does 

not believe that the treatment this 

proposal would afford to bankrupt 

companies constitutes an inequitable or 

unfairly discriminatory allocation of 

fees. 

In addition, the Exchange believes 

that waiving initial listing fees for a 

company listing its primary class of 

common stock which is registered under 

that Act but not listed on a national 

securities exchange is appropriate and 

does not constitute an inequitable or 

unfairly discriminatory allocation of 

fees. The Exchange anticipates that most 

companies taking advantage of this 

waiver will be formerly-listed 

companies that were delisted as a result 

of a failure to timely file annual reports 

with the Commission.5 The Exchange 

notes that these companies usually seek 

to re-list on the Exchange as soon as 

their filings are up to date.6 According 

to the Exchange, because such 

companies had previously paid initial 

listing fees to the Exchange or to another 

national securities exchange, the 

Exchange believes that to make them 

pay these fees again would further 

penalize them unnecessarily. 

The Exchange has represented that 

the proposed rule change would not 

affect its commitment of resources to its 

regulatory oversight of the listing 

process or its regulatory programs. 

Companies that benefit from one of the 

proposed waivers would be reviewed 

for compliance with Exchange listing 

standards in the same manner as any 

other company that applies to be listed 

on the Exchange. The Exchange would 

conduct a full and independent review 

of each issuer’s compliance with the 

Exchange’s listing standards. 

The Exchange also has represented 

that it does not expect the financial 

impact of this proposed rule change to 

be material, either in terms of increased 

levels of annual fees from transferring 

issuers or in terms of diminished initial 

listing fee revenues. A limited number 

of companies are qualified and seek to 

list on the Exchange that are either 

emerging from bankruptcy or have a 

registered class of common stock but are 

not currently listed on another market. 

Accordingly, the proposed rule change 

will not impact the Exchange’s resource 

commitment to its regulatory oversight 


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