29020 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Notices 

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

6 15 U.S.C. 78f(b)(5). 7 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)(iii). 

4 17 CFR 240.19b–4(f)(6). 5The Exchange has asked the Commission to 

waive the 30- day operative delay required by Rule 

19b–4(f)(6)(iii), 17 CFR 240.19b–4(f)(6)(iii). See 

discussion infra Section III. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,5

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

Act,6 in particular, in that it is designed 

to promote just and equitable principles 

of trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and national market 

system, and protect investors and the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

As the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the BSE 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. 

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–BSE–2007–09 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 

No. SR–BSE–2007–09. 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 at 

the Commission’s Public Reference 

Room. Copies of such filing will also be 

available for inspection and copying at 

the principal office of the BSE. 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 with to make available publicly. All 

submissions should refer to the file 

number in the caption above and should 

be submitted on or before June 13, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.7

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E7–9855 Filed 5–22–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55773; File No. SR–BSE–

2007–16] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Allow Oddlot and Mixed-lot Orders To Be Sent To 

the Boston Equities Exchange 

May 16, 2007. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 17, 

2007, the Boston Stock Exchange, Inc. 

(‘‘BSE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by the BSE. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 which renders it effective 

upon filing with the Commission.5 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The BSE proposes amending Section 

2 and 3 of Chapter XXXVII of the Rules 

of BSE (‘‘BSE Rules’’) to allow odd-lot 

and mixed-lot market or limit orders to 

be sent to the Boston Equities Exchange 

(‘‘BeX’’). The text of the proposed rule 

change is available at BSE, the 

Commission’s Public Reference Room, 

and (http://www.bostonstock.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 

BSE 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 those 

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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On June 13, 2006 the BSE filed 

Amendment No. 3 to File Number SR–

BSE–2006–22 (the ‘‘BeX Facility 

Filing’’), a rule filing submitted in 

connection with the implementation of 

the first of two phases of BeX, a fully 

automated electronic book for the 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Notices 29021 

6Securities Exchange Act Release No. 54365 

(August 25, 2006) 71 FR 52192 (September 1, 2006). 

7Securities Exchange Act Release No. 54546 

(September 29, 2006) 71 FR 59161 (October 6, 

2006). 

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

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

12Pursuant to Rule 19b–4(f)(6)(iii), the Exchange 

has given the Commission written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

on which the Exchange filed the proposed rule 

change. See 17 CFR 240.19b–4(f)(6)(iii). 

13 17 CFR 240.19b–4(f)(6). 

14For the purposes only of waiving the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

display and execution of orders in 

securities. On August 25, 2006, File 

Number SR–BSE–2006–22 was 

approved by the Commission.6 On 

August 3, 2006, the BSE filed, in 

connection with the implementation of 

the second phase of BeX and in 

connection with satisfying the 

requirements of Regulation NMS, File 

Number SR–BSE–2006–30. On 

September 29, 2006 the Commission 

approved File Number SR–BSE–2006–

30.7

At the present time, all orders sent to 

BeX must be round-lot market or limit 

orders with the exception of orders for 

Nasdaq Global Market securities and 

Nasdaq Capital Market securities, which 

orders may be odd-lot or mixed-lot 

orders. The purpose of this proposed 

rule change is to amend BSE Rules to 

allow all orders sent to BeX to be oddlot or mixed-lot market or limit orders, 

thereby removing the limitation that all 

orders sent to BeX must be round lot 

orders unless such orders are for Nasdaq 

Global Market securities or Nasdaq 

Capital Market securities. In other 

words, the proposed rule change would 

allow all orders sent to BeX to be roundlot, odd-lot or mixed-lot market or limit 

orders. For stocks, 100 shares shall 

constitute a ‘‘round lot,’’ any amount 

less than 100 shares shall constitute an 

‘‘odd lot,’’ and any amount greater than 

100 shares that is not a multiple of a 

round lot shall constitute a ‘‘mixed lot.’’

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,8

in general, and furthers the objectives of 

Section 6(b)(5) of the Act,9 in particular, 

in that it is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and to protect 

investors and the public interest in that 

it is designed to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (1) Significantly affect 

the protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for thirty days from the date 

on which it was filed, or such shorter 

time as the Commission may designate 

if consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 10 and Rule 19b–

4(f)(6) 11 thereunder.12

A proposed rule change filed under 

Commission Rule 19b–4(f)(6) 13

normally does not become operative 

prior to thirty days after the date of 

filing. The BSE requests that the 

Commission waive the 30-day operative 

delay, as specified in Rule 19b–

4(f)(6)(iii), and designate the proposed 

rule change to become operative 

immediately. The Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest 

because such waiver will allow BSE to 

implement rules similar to those already 

in place at other exchanges and 

establish uniformity with respect to 

odd-lot and mixed-lot orders for all 

securities traded on BeX without 

needless delay. For these reasons, the 

Commission designates the proposed 

rule change as operative upon filing.14

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in the 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–BSE–2007–16 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–BSE–2007–16. 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 office of the BSE. 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–BSE–2007–16 and should 

be submitted on or before June 13, 2007. 


pwalker on PROD1PC71 with NOTICES
29022 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 replaced and superseded the 

original filing in its entirety. 

4 17 CFR 240.19b–4(e). 

5 17 CFR 240.19b–4(c)(1). 

6 15 U.S.C. 78s(b). 

7When relying on Rule 19b–4(e), the SRO must 

submit Form 19b–4(e) to the Commission within 

five business days after the exchange begins trading 

the new derivative securities product. See 17 CFR 

240.19b–4(e)(2)(ii). 

8For an ETF to qualify for tax treatment as a 

regulated investment company, it must meet several 

requirements under the IRC. Among these is the 

requirement that, at the close of each quarter of the 

ETF’s taxable year, (i) at least 50% of the market 

value of the ETF’s total assets must be represented 

by cash items, U.S. government securities, 

securities of other regulated investment companies, 

and other securities, with such other securities 

limited for purposes of this calculation in respect 

of any one issuer to an amount not greater than 5% 

of the value if the ETF’s assets and not greater than 

10% of the outstanding voting securities of such 

issuer; and (ii) not more than 25% of the value of 

its total assets may be invested in the securities of 

any one issuer, or two or more issuers that are 

controlled by the ETF (within the meaning of 

Section 851(b)(4)(B) of the IRC) and that are 

engaged in the same or similar trades or businesses 

or related trades or business (other than U.S. 

government securities or the securities of other 

regulated investment companies). 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E7–9876 Filed 5–22–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55780; File No. SR–NYSE–

2007–37] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change and 

Amendment No. 1 Thereto Relating to 

Generic Listing Standards for Series of 

Investment Company Units Based on 

Fixed Income Indexes and Order 

Granting Accelerated Approval of 

Proposed Rule Change as Amended 

May 17, 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 March 29, 

2007, the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared substantially by the 

Exchange. On May 9, 2007, the 

Exchange filed Amendment No. 1.3 This 

order provides notice of the proposed 

rule change as modified by Amendment 

No. 1 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 proposes to revise 

Section 703.16 of the NYSE Listed 

Company Manual to include generic 

listing standards for series of Investment 

Company Units (‘‘ICUs’’) that are based 

on indexes or portfolios consisting of 

fixed income securities (‘‘Fixed Income 

Indexes’’) or on composite indexes 

consisting of equity and fixed income 

indexes or indexes or portfolios 

consisting of both equity and fixed 

income securities (collectively, 

‘‘Combination Indexes’’). 

The text of the proposed rule change 

is available at the NYSE, at the 

Commission’s Public Reference Room, 

and on the Exchange’s Web site at 

www.nyse.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, 

NYSE 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to revise 

Section 703.16 of the NYSE Listed 

Company Manual (‘‘Manual’’) to include 

generic listing standards for series of 

ICUs (also referred to herein as 

‘‘exchange-traded funds’’ or ‘‘ETFs’’) 

that are based on Fixed Income Indexes 

or on Combination Indexes. This 

proposal will enable the Exchange to list 

and trade ETFs pursuant to Rule 19b–

4(e) under the Act 4 if each of the 

conditions set forth in Section 703.16 of 

the Manual is satisfied. Rule 19b–4(e) 

provides that the listing and trading of 

a new derivative securities product by a 

self-regulatory organization shall not be 

deemed a proposed rule change, 

pursuant to paragraph (c)(1) of Rule 

19b–4,5 if the Commission has 

approved, pursuant to Section 19(b) of 

the Act,6 the self-regulatory 

organization’s trading rules, procedures, 

and listing standards for the product 

class that would include the new 

derivatives securities product, and the 

self-regulatory organization has a 

surveillance program for the product 

class.7

Exchange-Traded Funds 

NYSE Rule 1100 and Section 703.16 

of the Manual provide standards for 

listing ICUs, which are securities issued 

by a unit investment trust, an open-end 

management investment company 

(open-end mutual fund), or similar 

entity based on a portfolio of stocks or 

fixed income securities that seeks to 

provide investment results that 

correspond generally to the price and 

yield performance of a specified foreign 

or domestic stock index or fixed income 

securities index. Pursuant to Section 

703.16 of the Manual, ICUs must be 

issued in a specified aggregate number 

in return for a deposit of specified 

securities and/or a cash amount, with a 

value equal to the next determined net 

asset value (‘‘NAV’’). When aggregated 

in the same specified minimum number, 

ICUs must be redeemable by the issuer 

for the securities and/or cash, with a 

value equal to the next determined 

NAV. The NAV is calculated once a day 

after the close of the regular trading day. 

To meet the investment objective of 

providing investment returns that 

correspond to the price, dividend, and 

yield performance of the underlying 

index, an ETF may use a ‘‘replication’’

strategy or a ‘‘representative sampling’’

strategy with respect to the ETF 

portfolio. An ETF using a replication 

strategy will invest in each security 

found in the underlying index in about 

the same proportion as that security is 

represented in the index itself. An ETF 

using a representative sampling strategy 

will generally invest in a significant 

number, but perhaps not all, of the 

component securities of the underlying 

index, and will hold securities that, in 

the aggregate, are intended to 

approximate the full index in terms of 

certain key characteristics. In the 

context of a Fixed Income Index, such 

characteristics may include liquidity, 

duration, maturity, and yield. 

In addition, an ETF portfolio may be 

adjusted in accordance with changes in 

the composition of the underlying index 

or to maintain compliance with 

requirements applicable to a regulated 

investment company under the Internal 

Revenue Code (‘‘IRC’’).8


pwalker on PROD1PC71 with NOTICES