11794 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Notices 

8 Id. 

9See footnote 7. 

10See footnote 7. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4). 

13 15 U.S.C. 78s(b)(3)(A)(ii). 

14 17 CFR 240.19b–4(f)(2). 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

transaction charges are capped at $1,000 

for dividend, merger and short stock 

interest strategies executed on the same 

trading day in the same options class.8

In addition, there is a $25,000 per 

member organization fee cap on equity 

option transaction charges incurred in 

one month for dividend, merger and 

short stock interest strategies combined. 

The purpose of making the Pilot 

permanent for the fee caps on equity 

option transaction charges on dividend, 

merger and short stock interest 

strategies is to continue to attract 

additional liquidity to the Exchange and 

to remain competitive with other 

options exchanges in connection with 

these types of options strategies. 

The Exchange’s Pilot also included 

fee caps on comparison charges on 

dividend, merger and short stock 

interest strategies, however the 

comparison charges were eliminated by 

a previous rule filing.9 Additionally, the 

Pilot also included a license fee of $0.05 

per contract side imposed on dividend 

and short stock interest strategies, 

which was also eliminated by a 

previous rule filing.10

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 11 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 12

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Exchange believes that its proposal to 

make the Pilot permanent is beneficial 

to its members by providing additional 

trading opportunities at an efficient 

cost. 

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 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 

No written comments were either 

solicited or 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)(ii) of the Act 13 and 

paragraph (f)(2) of Rule 19b–4 14

thereunder. 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 Ccomments 

• 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–Phlx–2009–18 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2009–18. 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of the filing will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–Phlx– 

2009–18 and should be submitted on or 

before April 9, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5930 Filed 3–18–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59562; File No. SR– 

NYSEArca–2009–20] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to the Listing 

and Trading of the Safety First Trust 

Certificates Linked to the S&P 500®

Index 

March 12, 2009. 

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 March 6, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 by the Exchange. 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 Exchange, through its whollyowned subsidiary NYSE Arca Equities, 

Inc. (‘‘NYSE Arca Equities’’ or the 

‘‘Corporation’’), proposes to list under 

NYSE Arca Equities Rule 5.2(j)(7) 

(‘‘Trust Certificates’’) Safety First Trust 

Series 2009–1, Principal-Protected Trust 

Certificates Linked to the S&P 500®

Index. The text of the proposed rule 

change is available on the Exchange’s 

Web site at http://www.nyse.com, at the 


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3See the Registration Statement for Safety First 

Trust Series 2009–1, dated October 31, 2008 (Nos. 

333–154914, 154914–08, 154914–11); Registration 

Statement for Safety First Trust Series 2009–1, 

dated February 19, 2009 (Nos. 333–157386 and 

333–157386–01) (‘‘Registration Statements’’). 

4The Certificates will be subject to acceleration 

to an earlier Maturity Date upon one of the 

acceleration events described in the Registration 

Statements. 

5The Participation Rate will be determined at the 

time of issuance of the Certificates. 

6The Trust payments will not be guaranteed 

pursuant to a financial guaranty insurance policy. 

7The Securities and Warrants will not be 

exchange-listed and may trade over-the-counter. 

8Capitalized terms used but not defined herein 

have the meanings set forth in the Registration 

Statements. 

9See NYSE Arca Equities Rule 5.2(j)(7), 

Commentary .08. 

10See Securities Exchange Act Release No. 59051 

(December 4, 2008), 73 FR 75155 (December 10, 

2008) (SR–NYSEArca–2008–123) (order approving 

Rule 5.2(j)(7) and listing on the Exchange of 14 

issues thereunder). Three of the issues in SR– 

NYSEArca–2008–123 related to Trust Certificates 

based on the Index: Safety First Investments 

TIERS® Principal-Protected Minimum Return Trust 

Certificates, Series S&P 2003–23; Safety First Trust 

Series 2008–2 Principal-Protected Trust Certificates 

Linked to the Index; and Safety First Trust Series 

2008–4 Principal-Protected Trust Certificates 

Linked to the Index. The Certificates have similar 

characteristics and payout provisions to the Trust 

Continued 

Exchange’s principal office and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Trust Certificates are certificates 

representing an interest in a special 

purpose trust created pursuant to a trust 

agreement. The trust only issues Trust 

Certificates, which may or may not 

provide for the repayment of the 

original principal investment amount. 

The sole purpose of the trust is to invest 

the proceeds from its initial public 

offering to provide for a return linked to 

the performance of specified assets and 

to engage only in activities incidental to 

these objectives. Trust Certificates pay 

an amount at maturity based upon the 

performance of an underlying index or 

indexes of equity securities an (‘‘Equity 

Index Reference Asset’’); instruments 

that are direct obligations of the issuing 

company, either exercisable throughout 

their life (i.e., American style) or 

exercisable only on their expiration date 

(i.e., European style), entitling the 

holder to a cash settlement in U.S. 

dollars to the extent that the foreign or 

domestic index has declined below (for 

a put warrant) or increased above (for a 

call warrant) the pre-stated cash 

settlement value of the index (‘‘Index 

Warrants’’); or a combination of two or 

more Equity Index Reference Assets or 

Index Warrants, as set forth in Rule 

5.2(j)(7). 

The Exchange proposes to list under 

Rule 5.2(j)(7) the Safety First Trust 

Series 2009–1, Principal-Protected Trust 

Certificates Linked to the S&P 500®

Index (‘‘Certificates’’).3 According to the 

Registration Statement, the Certificates 

are preferred securities of Safety First 

Trust Series 2009–1 (‘‘Trust’’) and will 

mature on a specified date in 2014 

(‘‘Maturity Date’’).4 Investors will 

receive at maturity for each certificate 

held intact (that is, that has not been 

exchanged by the holder, as described 

below) an amount in cash equal to $10 

plus a ‘‘Supplemental Distribution 

Amount,’’ which may be positive or 

zero. The Supplemental Distribution 

Amount will be based on the percentage 

change of the value of the S&P 500 

Index (‘‘Index’’) during the term of the 

Certificates. The Supplemental 

Distribution Amount for each Certificate 

will equal the product of (a) $10, (b) the 

percentage change in the value of the 

Index and (c) the Participation Rate, 

which is 90%–100%,5 provided that the 

Supplemental Distribution Amount will 

not be less than zero.6

A holder of the Certificates has an 

interest in two separate securities— 

equity index participation securities 

(‘‘Securities’’) and equity index warrants 

(‘‘Warrants’’) of Citigroup Funding Inc.7

The assets of the Trust will consist of 

the Securities and the Warrants. 

Beginning on the date the Certificates 

are issued and ending one business day 

prior to the Valuation Date,8 a holder 

can exercise an ‘‘exchange right.’’ A 

holder can exercise the exchange right 

by providing notice to his or her broker 

and instructing the broker to forward 

that notice to the institutional trustee for 

the Certificates (U.S. Bank National 

Association), on any business day, to 

exchange the Certificates the investor 

holds for a pro rata portion of the assets 

of the Trust, which consist of the 

Securities and the Warrants. According 

to the Registration Statement, such 

holders will lose the benefit of principal 

protection at maturity, and this could 

result in their receiving substantially 

less than the amount of the original 

investment in the Certificates. In order 

to exercise the exchange right, the 

investor’s account must be approved for 

options trading.9

The Securities will mature on the 

Maturity Date. At maturity, each 

Security will pay a ‘‘Security Payment’’ 

equal to $10 plus a ‘‘Security Return 

Amount,’’ which could be positive, zero 

or negative. If the value of the Index on 

the Valuation Date is greater than its 

value on the pricing date, the Security 

Return Amount for each Security will 

equal the product of (a) $10, (b) the 

percentage increase in the Index and (c) 

the Participation Rate, which equals 

90%–100% (e.g., assuming a 

Participation Rate of 90%, if the Index 

rises 30%, the Security Return Amount 

would be $2.70 ($10 times 0.30 times 

0.90), and the Security Payment would 

be $12.70 ($10 plus $2.70)). 

If the value of the Index on the 

Valuation Date is less than or equal to 

its value on the pricing date, the 

Security Return Amount for each 

security will equal the product of (a) 

$10 and (b) the percentage decrease in 

the Index. Thus, because the holder’s 

participation in the depreciation of the 

S&P 500 is not limited by the 

Participation Rate, if the value of the 

Index on the Valuation Date is less than 

its value on the pricing date, investors 

will participate fully in the depreciation 

of the Index (e.g., if the Index falls 30%, 

the Security Return Amount would be 

$3.00 ($10 times 0.30) and the Security 

Payment would be $7.00 ($10 minus 

$3.00). The Security Return Amount 

will be used only for the purpose of 

determining the Security Payment for 

the Securities and is different from the 

Supplemental Distribution Amount 

used in determining the maturity 

payment on the Certificates. 

The Warrants will be automatically 

exercised on the Maturity Date. If the 

value of the Index increases or does not 

change, the Warrants will pay zero. If 

the value of the Index decreases, the 

warrants will pay a positive amount 

equal to the product of (a) $10 and (b) 

the percentage decrease in the value of 

the Index. 

The Certificates are similar to 

securities previously approved by the 

Commission for listing on the Exchange, 

including Trust Certificates issued by 

Citigroup Funding, Inc. based on the 

Index.10 At least one million publicly 


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11796 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Notices 

Certificates approved by the Commission in SR– 

NYSEArca–2008–123. 11The parameters relating to number of units, 

number of public beneficial holders and issuer 

assets and net worth and minimum tangible net 

worth are similar to those in NYSE Arca Equities 

Rule 5.2(j)(6)(A). 12Commentary .01 provides criteria for continued 

listing and provides that the Corporation will 

commence delisting or removal proceedings with 

respect to an issue of Trust Certificates (unless the 

Commission has approved the continued trading of 

such issue) (i) if the aggregate market value or the 

principal amount of the securities publicly held is 

less than $400,000; (ii) if the value of the index or 

composite value of the indexes is no longer 

calculated or widely disseminated on at least a 15- 

second basis with respect to indexes containing 

only securities listed on a national securities 

exchange, or on at least a 60-second basis with 

respect to indexes containing foreign country 

securities; or (iii) if such other event shall occur or 

condition exists which in the opinion of the 

Corporation makes further dealings on the 

Corporation inadvisable. 13Pursuant to NYSE Arca Equities Rule 7.34(a), 

the NYSE Arca Marketplace will have three trading 

sessions each day the Corporation is open for 

business unless otherwise determined by the 

Corporation: 

Opening Session—begins at 1:00:00 a.m. (Pacific 

Time) and concludes at the commencement of the 

Core Trading Session. The Opening Auction and 

the Market Order Auction shall occur during the 

Opening Session. 

Core Trading Session—begins for each security at 

6:30:00 a.m. (Pacific Time) or at the conclusion of 

the Market Order Auction, whichever comes later, 

and concludes at 1:00:00 p.m. (Pacific Time). 

Late Trading Session—begins following the 

conclusion of the Core Trading Session and 

concludes at 5:00:00 p.m. (Pacific Time). 

Telephone conversation between Michael 

Cavalier, Chief Counsel, NYSE Euronext, and 

Edward Cho, Special Counsel, Division of Trading 

and Markets, Commission, dated March 11, 2009. 

14See NYSE Arca Equities Rule 7.12, 

Commentary .04. 

15S&P is a division of The McGraw-Hill 

Companies, Inc. 

16For a list of current members of the ISG, see 

http://www.isgportal.org. 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(5). 

held trading units will be issued prior 

to listing and trading on the Exchange, 

with at least 400 public beneficial 

holders. The issuer of the Certificates, 

Citigroup Funding, Inc., has total assets 

of at least $100 million and net worth 

of at least $10 million. In addition, the 

issuer will be required to have a 

minimum tangible net worth of 

$250,000,000, and, in the alternative, 

the issuer will be required to have a 

minimum tangible net worth of 

$150,000,000 and the original issue 

price of the Certificates combined with 

all of the issuer’s other Trust Certificates 

listed on a national securities exchange 

or otherwise publicly traded in the 

United States, must not be greater than 

25 percent of the issuer’s tangible net 

worth at the time of issuance.11 The 

Certificates also will be subject to the 

continued listing criteria of Rule 

5.2(j)(7) 12 and will meet all other 

criteria of Rule 5.2(j)(7). 

Additional information relating to 

Citigroup Funding, Inc., the Trust, 

Certificates, Securities, Warrants, 

exercise right, Security Return Amount, 

Supplemental Distribution Amount, and 

risks is included in the Registration 

Statements. 

Exchange Rules Applicable to Trust 

Certificates 

The Certificates will be subject to all 

Exchange rules governing the trading of 

equity securities. The Exchange’s equity 

margin rules will apply to transactions 

in Trust Certificates. The Certificates 

will trade during trading hours set forth 

in Rule 7.34(a).13

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in Trust 

Certificates. Trading may be halted 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in Trust 

Certificates inadvisable. These may 

include: (1) The extent to which trading 

is not occurring in the underlying 

securities; or (2) whether other unusual 

conditions or circumstances detrimental 

to the maintenance of a fair and orderly 

market are present.14

Information Dissemination 

The value of the Index is calculated 

and disseminated on at least a 15- 

second basis. If the Index is not being 

disseminated as required, the Exchange 

may halt trading during the day on 

which the interruption first occurs. If 

such interruption persists past the 

trading day in which it occurred, the 

Exchange will halt trading no later than 

the beginning of the trading day 

following the interruption. 

Quotation and last sale information 

will be disseminated by the Exchange 

via the Consolidated Tape. The value of 

the Index is widely disseminated by 

major market data vendors and financial 

publications. 

Firewalls 

Standard & Poor’s (‘‘S&P’’),15 which 

publishes the Index, is not a registered 

broker-dealer, and Citigroup Funding, 

Inc. is not affiliated with S&P. With 

respect to any index upon which the 

value of an issue of Trust Certificates is 

based that is maintained by a brokerdealer, the Exchange would require that 

such broker-dealer erect a ‘‘firewall’’ 

around personnel responsible for the 

maintenance of such index or who have 

access to information concerning 

adjustments to the index, and the index 

would be required to be calculated by a 

third party who is not a broker-dealer. 

Surveillance 

The Exchange intends to utilize its 

existing surveillance procedures 

applicable to derivative products, which 

include Trust Certificates, to monitor 

trading in the securities. The Exchange 

represents that these procedures are 

adequate to properly monitor Exchange 

trading of the securities in all trading 

sessions and to deter and detect 

violations of Exchange rules and 

applicable Federal securities laws. 

The Exchange’s current trading 

surveillance focuses on detecting when 

securities trade outside their normal 

patterns. When such situations are 

detected, surveillance analysis follows 

and investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

The Exchange may obtain information 

via ISG from other exchanges who are 

members of the ISG.16

In addition, the Exchange also has a 

generally policy prohibiting the 

distribution of material, non-public 

information by its employees. 

Information Bulletin 

Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading an issue of Trust 

Certificates and suitability 

recommendation requirements. 

Specifically, the Information Bulletin 

will discuss the following: (1) The 

procedures for purchases and exchanges 

of Trust Certificates; (2) NYSE Arca 

Equities Rule 9.2(a), which imposes a 

duty of due diligence on its ETP Holders 

to learn the essential facts relating to 

every customer prior to trading an issue 

of Trust Certificates; (3) trading hours; 

and (4) trading information. 

In addition, the Information Bulletin 

will reference that an issue of Trust 

Certificates is subject to various fees and 

expenses described in the applicable 

prospectus. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 17 of the Act 

in general and furthers the objectives of 

Section 6(b)(5) 18 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 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transaction in securities, 

and, in general to protect investors and 

the public interest. The proposed rule 

change will permit listing on the 

Exchange in a timely manner of the 


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Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Notices 11797 

19 17 CFR 200.30–3(a)(12). 

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

2The exact text of the FICC’s proposed rule 

change can be found in Attachment 1 of this filing 

or at http://www.dtcc.com/downloads/legal/ 

rule_filings/2009/ficc/2009–03.pdf. 

3The Commission has modified portions of the 

text of the summaries prepared by the FICC. 

Certificates. The Exchange believes that 

the provisions of Rule 5.2(j)(7), together 

with the Exchange’s applicable 

surveillance, serve to foster investor 

protection 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 

No written comments were solicited 

or received with respect to 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 Exchange consents, 

the Commission will: 

(A) By order approve the proposed 

rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The Exchange has requested 

accelerated approval of this proposed 

rule change prior to the 30th day after 

the date of publication of the notice in 

the Federal Register. The Commission 

is considering granting accelerated 

approval of the proposed rule change at 

the end of a 21-day comment period. 

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 

No. SR–NYSEArca–2009–20 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2009–20. 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, on official business days between 

the hours of 10 a.m. and 3 p.m. 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– 

NYSEArca–2009–20 and should be 

submitted on or before April 9, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5928 Filed 3–18–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59569; File No. SR–FICC– 

2009–03] 

Self-Regulatory Organizations; The 

Fixed Income Clearing Corporation; 

Notice of Filing of Proposed Rule To 

Impose a Charge on Members With a 

Fail-to-Deliver in Treasury Securities 

March 12, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

February 25, 2009, The Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change No. SR–FICC–2009–03, 

which is described in Items I, II, and III 

below and have been prepared primarily 

by the FICC. The Commission is 

publishing this notice to solicit 

comments from interested parties on the 

proposed rule change as. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change will impose 

a charge on members with a fail-todeliver position in treasury securities.2

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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. FICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Treasury Markets Practices Group 

(‘‘TMPG’’), a group of market 

participants active in the treasury 

securities market that is sponsored by 

the Federal Reserve Bank of New York 

(the ‘‘FRBNY’’), has been in the process 

of devising ways to address the 

persistent settlement fails in treasury 

securities transactions that have arisen, 

according to the TMPG, due to the 

recent market turbulence and low shortterm interest rates. In order to encourage 

market participants to resolve fails 

promptly, the TMPG has proposed for 

adoption a ‘‘best practice’’ that would 

call for the market-wide assessment of a 

charge on fail-to-deliver positions. As 

part of this implementation of this ‘‘best 

practice,’’ the TMPG has asked the 

Government Securities Division of FICC 

(‘‘GSD’’) to impose this charge on failed 

positions involving treasury securities 

within FICC. 


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