49522 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 

61 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See NYSE Arca Equities Rule 8.202 and 

Securities Exchange Act Release No. 53253 

(February 8, 2006), 71 FR 8029 (February 15, 2006) 

(SR–PCX–2005–123) (order granting accelerated 

approval for the Exchange to adopt listing and 

trading standards for Currency Trust Shares and 

approving the UTP trading of shares of the Euro 

Currency Trust (now known as the 

‘‘CurrencyShares Euro Trust’’)). E-mail from 

Michael Cavalier, Associate General Counsel, NYSE 

Group, Inc., to Brian O’Neill, Staff Attorney, and 

Edward Cho, Special Counsel, Division of Trading 

and Markets, Commission, dated August 4, 2008 

(confirming the name change of the Euro Currency 

Trust to the CurrencyShares Euro Trust). As defined 

in NYSE Arca Equities Rule 8.202(c), the term 

‘‘Currency Trust Shares’’ means a security that (a) 

Is issued by a trust (‘‘Trust’’) that holds a specified 

non-U.S. currency deposited with the Trust; (b) 

when aggregated in some specified minimum 

number may be surrendered to the Trust by the 

beneficial owner to receive the specified non-U.S. 

currency; and (c) pays beneficial owners interest 

and other distributions on the deposited non-U.S. 

currency, if any, declared and paid by the Trust. 

4The Commission has previously approved 

listing or UTP trading of issues of CurrencyShares 

based on non-US currencies. See Securities 

Exchange Act Release No. 52843 (November 28, 

2005), 70 FR 72486 (December 5, 2005) (SR–NYSE–

2005–65) (order granting accelerated approval for 

the New York Stock Exchange (‘‘NYSE’’) to list and 

trade shares of the CurrencyShares Euro Trust); 

Securities Exchange Act Release No. 54020 (June 

20, 2006), 71 FR 36579 (June 27, 2006) (SR–NYSE–

2006–35) (order granting accelerated approval for 

NYSE to list and trade shares of the CurrencyShares 

Australian Dollar Trust, CurrencyShares British 

Pound Sterling Trust, CurrencyShares Canadian 

Dollar Trust, CurrencyShares Mexican Peso Trust, 

CurrencyShares Swedish Krona Trust and 

CurrencyShares Swiss Franc Trust); Securities 

Exchange Act Release No. 55268 (February 9, 2007), 

72 FR 7793 (February 20, 2007) (SR–NYSE–2007–

03) (order granting accelerated approval for NYSE 

to list and trade shares of the CurrencyShares 

Japanese Yen Trust); Securities Exchange Act 

Release No. 55320 (February 21, 2007), 72 FR 8828 

(February 27, 2007) (SR–NYSEArca–2007–15) 

(order granting accelerated approval for the 

Exchange to UTP trade shares of the 

CurrencyShares Japanese Yen Trust); Securities 

Exchange Act Release No. 56131 (July 25, 2007), 72 

FR 42212 (August 1, 2007) (SR–NYSEArca–2007–

57) (order granting accelerated approval for 

Exchange to list eight CurrencyShares Trusts). 

5See Preliminary Prospectuses for the 

CurrencyShares Hong Kong Dollar Trust 

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 also will be available 

for inspection and copying at the 

principal office of the NYSE. 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–NYSE–2008–52 and should 

be submitted on or before September 11, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.61

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19357 Filed 8–20–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58365; File No. SR–

NYSEArca–2008–81] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and Order 

Granting Accelerated Approval of 

Proposed Rule Change, as Modified by 

Amendment No. 1 Thereto, Relating to 

Listing and Trading of Four 

CurrencyShares Trusts 

August 14, 2008. 

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 July 30, 

2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

‘‘Exchange’’), through its wholly owned 

subsidiary, NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’), filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by the Exchange. On August 

11, 2008, the Exchange filed 

Amendment No. 1 to the proposed rule 

change. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons and is granting 

approval to the proposed rule change, as 

modified by Amendment No. 1 thereto, 

on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to list shares 

(‘‘Shares’’) of the following trusts: 

CurrencySharesSM Hong Kong Dollar 

Trust, CurrencySharesSM Russian Ruble 

Trust, CurrencySharesSM Singapore 

Dollar Trust, and CurrencySharesSM

South African Rand Trust (‘‘Trusts’’) 

under NYSE Arca Equities Rule 8.202. 

The text of the proposed rule change is 

available on the Exchange’s Web site at 

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

NYSE Arca 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 III below. NYSE 

Arca 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 

Under NYSE Arca Equities Rule 

8.202, the Exchange may propose to list 

and/or trade pursuant to unlisted 

trading privileges (‘‘UTP’’) ‘‘Currency 

Trust Shares.’’ 3 The Exchange proposes 

to list the Shares of the Trusts under 

NYSE Arca Equities Rule 8.202.4

Rydex Specialized Products LLC is 

the sponsor of the Trusts (‘‘Sponsor’’); 

The Bank of New York is the trustee of 

the Trusts (‘‘Trustee’’); JPMorgan Chase 

Bank, N.A., London Branch, is the 

depository for the Trusts (‘‘Depository’’); 

and Rydex Distributors, Inc. is the 

distributor for the Trusts (‘‘Distributor’’). 

The Sponsor, Trustee, Depository and 

Distributor are not affiliated with the 

Exchange or one another, with the 

exception that the Sponsor and 

Distributor are affiliated. For more 

information on these entities, see below. 

The Shares represent units of 

fractional undivided beneficial interest 

in, and ownership of, the respective 

Trust. The investment objective of the 

Trusts is for the Shares issued by the 

Trusts to reflect the price of the 

applicable foreign currency owned by 

the specific Trust, plus accrued interest, 

less the expenses and liabilities of such 

Trust, according to the Registration 

Statements for the Trusts.5 The Shares 

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Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 49523 

(Registration No. 333–150686), CurrencyShares 

Russian Ruble Trust (Registration No. 333–150687), 

CurrencyShares Singapore Dollar Trust 

(Registration No. 333–150684), and CurrencyShares 

South African Rand Trust (Registration No. 333–

150685), each dated July 21, 2008. The Preliminary 

Prospectuses listed in this paragraph are 

collectively referred to herein as the ‘‘Registration 

Statements.’’ All information in this proposed rule 

change relating to the Shares and the Trusts is 

based on information in the Registration 

Statements. 

6For April 2007, the daily average reported 

foreign exchange market turnover of the USD 

against the Hong Kong Special Administrative 

Region (SAR), Russia, Singapore and South Africa 

was $175 billion, $50 billion, $231 billion and $14 

billion, respectively. (Source: Bank for International 

Settlements, Triennial Central Bank Survey, 

December 2007, Table B.2 (‘‘Central Bank 

Survey’’)). The Central Bank Survey reports that 

there appears to have been an increase in total 

turnover of emerging market currencies. In April 

2007, emerging market currencies were involved in 

almost 20% of all transactions. Specifically, the 

Hong Kong Dollar, Singapore Dollar, Rand and 

Ruble experienced a percentage share of average 

daily turnover of 2.8%, 1.2%, 0.9% and 0.8%, 

respectively, reflecting slight increases from 

previously reported years. (Source: Bank for 

International Settlements, Triennial Central Bank 

Survey, December 2007, Table B.6) 

7The CFTC is an independent government agency 

with the mandate to regulate commodity futures 

and options markets in the United States under the 

Commodity Exchange Act. In addition to its 

oversight of regulated futures exchanges, the CFTC 

has jurisdiction over certain foreign currency 

futures, options and options on futures transactions 

occurring other than on a regulated exchange and 

involving retail customers. 

8The Sponsor has obtained guidance from the 

SEC Division of Corporation Finance with respect 

to the Trusts pursuant to which the Sponsor’s 

principal executive officer and principal financial 

officer will provide any certifications that are 

required from a ‘‘registrant’s’’ principal executive 

officer and principal financial officer. See letters 

from the Office of Chief Counsel, Division of 

Corporation Finance, at the Commission dated 

March 22, 2006 (with respect to the 

CurrencySharesSM Euro Trust ); September 13, 2006 

(with respect to the CurrencySharesSM Australian 

Dollar Trust, CurrencySharesSM British Pound 

Sterling Trust, CurrencySharesSM Canadian Dollar 

Trust, CurrencySharesSM Mexican Peso Trust, 

CurrencySharesSM Swedish Krona Trust, and 

CurrencySharesSM Swiss Franc Trust) and March 

27, 2007 (with respect to the CurrencySharesSM

Japanese Yen Trust). 

are intended to provide institutional 

and retail investors with a simple, costeffective means of hedging their 

exposure to a particular foreign 

currency and otherwise implement 

investment strategies that involve 

foreign currency (e.g., diversify more 

generally against the risk that the U.S. 

Dollar (‘‘USD’’) would depreciate).6

Futures and options on futures on the 

Russian Ruble and the South African 

Rand are traded on the Chicago 

Mercantile Exchange (‘‘CME’’). Futures 

on the Russian Ruble are also traded on 

the Moscow Interbank Currency 

Exchange and the Russian Trading 

System. Based upon the Exchange’s 

review of information supplied by major 

market data vendors, futures or options 

are not traded on the Singapore Dollar 

or Hong Kong Dollar. Because the 

Shares are traded on NYSE Arca, 

investors are able to access the 

applicable foreign currency market 

through a traditional brokerage account 

which provides investors with an 

efficient means of implementing 

investment tactics and strategies that 

involve the applicable foreign currency. 

Foreign Currency Regulation 

Most trading in the global over-thecounter (‘‘OTC’’) foreign currency 

markets is conducted by regulated 

financial institutions such as banks and 

broker-dealers. In addition, in the 

United States, the Foreign Exchange 

Committee of the New York Federal 

Reserve Bank has issued Guidelines for 

Foreign Exchange Trading, and centralbank sponsored committees in Japan 

and Singapore have published similar 

best practice guidelines. In the United 

Kingdom, the Bank of England has 

published the Non-Investment Products 

Code, which covers foreign currency 

trading. The Financial Markets 

Association, whose members include 

major international banking 

organizations, has also established best 

practices guidelines called the Model 

Code. 

Participants in the U.S. OTC market 

for foreign currencies are generally 

regulated by their oversight regulators. 

For example, participating banks are 

regulated by the banking authorities. In 

addition, in the U.S. the Commodity 

Futures Trading Commission (‘‘CFTC’’) 

regulates trading of futures, options and 

options on futures on foreign currencies 

on regulated futures exchanges.7 The 

CFTC has established rules designed to 

prevent market manipulation, abusive 

trade practices and fraud, as does the 

CME. 

The CME has authority to perform 

surveillance on its members’ trading 

activities, review positions held by 

members and large-scale customers, and 

monitor the price movements of options 

and/or futures markets by comparing 

them with cash and other derivative 

markets’ prices. As noted above, based 

upon the Exchange’s review of market 

data information, futures or options are 

not traded on the Singapore Dollar or 

Hong Kong Dollar. Therefore, CME 

surveillance and CFTC oversight would 

pertain only to futures and options on 

futures on the Russian Ruble and South 

African Rand. 

The Sponsor 

The Sponsor of each Trust is a 

Delaware limited liability company. The 

sole member of the Sponsor is PADCO 

Advisors II, Inc., a Maryland 

corporation solely owned by Rydex 

Holdings, Inc., a Maryland corporation. 

Rydex Holdings, Inc. is solely owned by 

Rydex NV, Inc., a Nevada corporation 

that is privately-held. The Sponsor and 

its affiliates collectively do business as 

‘‘Rydex Investments.’’

The Sponsor is responsible for 

establishing the Trusts and for the 

registration of the Shares. The Sponsor 

generally oversees the performance of 

the Trustee and the Trusts’ principal 

service providers, but does not exercise 

day-to-day oversight over the Trustee or 

such service providers. The Sponsor 

regularly communicates with the 

Trustee to monitor the overall 

performance of the Trusts. The Sponsor, 

with assistance and support from Rydex 

affiliates who also do business as 

‘‘Rydex Investments,’’ the Trustee and 

outside professionals, are responsible 

for preparing and filing periodic reports 

on behalf of the Trusts with the SEC.8

The Sponsor designates the auditors of 

the Trusts and may from time to time 

employ legal counsel for the Trust. 

The Distributor is assisting the 

Sponsor in developing a marketing plan 

for the Trusts, preparing marketing 

materials on the Shares, executing the 

marketing plan for the Trusts and 

providing strategic and tactical research 

on the global foreign exchange markets. 

The Sponsor would not enter into an 

agreement with the Distributor covering 

these services, because the Distributor is 

an affiliate and would not be paid any 

compensation by the Sponsor for 

performing these services. 

The Sponsor with the Distributor’s 

assistance maintains a public Web site 

on behalf of the Trusts, http:// 

www.currencyshares.com, which 

contains information about the Trusts 

and the Shares, and oversees certain 

Shareholder services, such as a call 

center and prospectus delivery. 

The Sponsor may direct the Trustee in 

the conduct of its affairs, but only as 

provided in the Depositary Trust 

Agreement. For example, the Sponsor 

may direct the Trustee to sell the Trusts’

foreign currency to pay certain 

extraordinary expenses, to suspend a 

redemption order, postpone a 

redemption settlement date, or to 

terminate the Trusts if certain criteria 

are met. The Sponsor anticipates that, if 

the market capitalization of a Trust is 

less than $300 million for five 

consecutive trading days beginning after 

the first anniversary of such Trust’s 

inception, then the Sponsor would, in 

accordance with the Depositary Trust 

Agreement, direct the Trustee to 

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49524 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 

9 15 U.S.C. 80a. 

10See letter from Racquel L. Russell, Branch 

Chief, SEC Division of Market Regulation, to George 

T. Simon, Foley & Lardner, dated June 21, 2006 

(‘‘June 21, 2006 letter’’) (granting relief from certain 

rules under the Act for certain of the Trusts); letter 

from James A Brigagliano, Assistant Director, SEC 

Division of Market Regulation to Michael 

Schmidtberger, Sidley, Austin, Brown & Wood, 

dated January 19, 2006 (‘‘January 19, 2006 Letter’’) 

(granting relief from certain rules under the Act for 

the DB Commodity Index Tracking Master Fund). 

The Sponsor is relying on the June 21, 2006 Letter 

regarding Rule 10a–1, Rule 200(g) of Regulation 

SHO, and Rules 101 and 102 of Regulation M under 

the Act, and is relying on the January 19, 2006 

Letter regarding Section 11(d)(1) of the Act and 

Rule 11d1–2 thereunder. 

11 15 U.S.C. 78a. 

12See note 10, supra. 

13See Securities Exchange Act Release No. 48745 

(November 4, 2003), 68 FR 64154 (November 12, 

2003) (SR–NYSE–2002–33, et al.) (specifically 

noting that the corporate governance standards will 

not apply to, among others, passive business 

organizations in the form of trusts). See also 

Securities Exchange Act Release No. 47654 (April 

9, 2003), 68 FR 18788 (April 16, 2003) (File No. S7–

02–03) (noting in Section II(F)(3)(c) that ‘‘SROs may 

exclude from Exchange Act Rule 10A–3’s 

requirements issuers that are organized as trusts or 

other unincorporated associations that do not have 

a board of directors or persons acting in a similar 

capacity and whose activities are limited to 

passively owning or holding (as well as 

terminate and liquidate such Trust. The 

Sponsor’s fee accrues daily at an annual 

nominal rate of 0.40% of the applicable 

foreign currency in the Trust (including 

all unpaid interest but excluding unpaid 

fees, each as accrued through the 

immediately preceding day) and is paid 

monthly. 

The Trustee 

The Trustee is generally responsible 

for the day-to-day administration of the 

Trusts, including keeping the Trusts’

operational records. The Trustee’s 

principal responsibilities include selling 

the Trusts’ foreign currency if needed to 

pay the Trusts’ expenses, calculating the 

Net Asset Value (‘‘NAV’’) of the Trusts 

and the NAV per Share, receiving and 

processing orders from Authorized 

Participants to create and redeem 

Baskets (as discussed below) and 

coordinating the processing of such 

orders with the Depository and DTC. 

The Trustee earns a monthly fee that is 

paid by the Sponsor. 

The Trustee intends to regularly 

communicate with the Sponsor to 

monitor the overall performance of the 

Trusts. The Trustee, along with the 

Sponsor, consults with the Trusts’ legal, 

accounting and other professional 

service providers as needed. The 

Trustee assists and supports the 

Sponsor with the preparation of all 

periodic reports required to be filed 

with the SEC on behalf of the Trusts. 

Affiliates of the Trustee may from time 

to time act as Authorized Participants or 

purchase or sell foreign currency or 

Shares for their own account. 

The Depository 

The Depository accepts Trust foreign 

currency deposited with it as a banker 

by Authorized Participants in 

connection with the creation of Baskets. 

The Depository facilitates the transfer of 

the applicable foreign currency into and 

out of the Trust through the primary and 

secondary deposit accounts maintained 

with it as a banker by the Trust. 

The Depository is not paid a fee for 

its services to the Trusts. The 

Depository may earn a ‘‘spread’’ or 

‘‘margin’’ over the rate of interest it pays 

to the Trusts on the applicable foreign 

currency deposit balances. 

The Depository is not a trustee for the 

Trusts or the Shareholders. The 

Depository and its affiliates may from 

time to time act as Authorized 

Participants or purchase or sell foreign 

currency or Shares for their own 

account, as agent for their customers 

and for accounts over which they 

exercise investment discretion. 

The Distributor 

The Distributor is a registered brokerdealer and is a member of FINRA. The 

Distributor is assisting the Sponsor in 

developing a marketing plan for the 

Trusts on an ongoing basis, preparing 

marketing materials regarding the 

Shares, including the content on the 

Trusts’ Web site, http:// 

www.currencyshares.com, executing the 

marketing plan for the Trusts, and 

providing strategic and tactical research 

on the global foreign exchange market. 

The Distributor and the Sponsor are 

affiliates of one another. There is no 

written agreement between them, and 

no compensation is paid by the Sponsor 

to the Distributor in connection with 

services performed by the Distributor for 

the Trusts. 

Description of the Trusts 

The Trusts holds the applicable 

foreign currency and are expected from 

time to time to issue Baskets in 

exchange for deposits of the foreign 

currency and to distribute the foreign 

currency in connection with 

redemptions of Baskets. The investment 

objective of the Trusts is for the Shares 

to reflect the price in USD of the 

applicable foreign currency. The Shares 

represent units of fractional undivided 

beneficial interest in, and ownership of, 

the respective Trusts. The Trusts are not 

managed like business corporations or 

active investment vehicles. The foreign 

currency held by the Trusts would only 

be sold (1) If needed to pay Trust 

expenses, (2) in the event a Trust 

terminates and liquidates its assets or 

(3) as otherwise required by law or 

regulation. The sale of foreign currency 

by the Trusts is a taxable event to 

Shareholders. According to the 

Registration Statements, the Trusts are 

not registered as investment companies 

under the Investment Company Act of 

1940 9 and are not required to register 

under such Act. 

Each of the Trust’s assets consists 

primarily of the applicable foreign 

currency on demand deposit in two 

deposit accounts maintained by the 

Depository: A primary deposit account 

which earns interest and a secondary 

deposit account which does not earn 

interest. The secondary deposit account 

is used only in connection with midmonth creations and redemptions of 

blocks of 50,000 Shares (‘‘Baskets’’). The 

secondary account is used to account for 

interest that has been earned on the 

primary deposit account during the 

month but not yet paid and to receive 

interest earned on the primary deposit 

account, pay Trust expenses and 

distribute any excess interest to 

shareholders on a monthly basis. 

The Trusts do not hold any derivative 

products. Each Share represents a 

proportional interest, based on the total 

number of Shares outstanding, in the 

applicable foreign currency owned by 

the respective Trusts, plus accrued but 

unpaid interest, less the estimated 

accrued but unpaid expenses (both 

asset-based and non-asset based) of a 

Trust. The Sponsor expects that the 

price of a Share will fluctuate in 

response to fluctuations in the price of 

the applicable foreign currency and that 

the price of a Share will reflect 

accumulated interest as well as the 

estimated accrued but unpaid expenses 

of a Trust. The Trusts will terminate 

upon the occurrence of any of the 

termination events listed in the 

Depositary Trust Agreement and will 

otherwise terminate on a specified date 

40 years after formation of the Trusts. 

The Sponsor, on behalf of the Trusts, 

relies on relief previously granted by the 

Division of Market Regulation (now 

known as the Division of Trading and 

Markets) 10 from certain trading 

requirements of the Securities Exchange 

Act of 1934 (‘‘Act’’).11 The Sponsor has 

received guidance from the Commission 

regarding the application of the 

certification rules for quarterly and 

annual reports adopted pursuant to 

Section 302 of the Sarbanes-Oxley Act 

of 2002.12 In addition, the Trusts will 

not be subject to the Exchange’s 

corporate governance requirements.13

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Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 49525 

administering and distributing amounts in respect 

of) securities, rights, collateral or other assets on 

behalf of or for the benefit of the holders of the 

listed securities.’’) 

14The Exchange notes that the Trusts, which will 

only hold the applicable foreign currency as an 

asset in the normal course of its operations, differs 

from index-based exchange-traded funds, which 

may involve a trust holding hundreds or even 

thousands of underlying component securities, 

necessarily involving in the arbitrage process 

movements in a large number of security positions. 

See, e.g., Securities Exchange Act Release No. 

46306 (August 2, 2002), 67 FR 51916 (August 9, 

2002) (SR–NYSE–2002–28) (approving the UTP 

trading of Vanguard Total Market VIPERs based on 

the Wilshire 5000 Total Market Index, among other 

funds). 

15Closing Rate is defined in the Registration 

Statements as ‘‘the [Foreign Currency]/USD 

exchange rate as determined by WM/Reuters at 4:00 

PM (London time).’’ WM/Reuters is a joint venture 

of The WM Company PLC and Thomson Reuters. 

16The Exchange will obtain a representation from 

the Trusts that the NAV per Share will be 

calculated daily and made available to all market 

participants at the same time. 

Liquidity 

The amount of the discount or 

premium in the trading price relative to 

the NAV per Share may be influenced 

by non-concurrent trading hours 

between the major foreign currency 

markets and the Exchange. Because of 

the potential for arbitrage inherent in 

the structure of the Trusts, the Sponsor 

believes that the Shares will not trade at 

a material discount or premium to the 

value of underlying currency held by a 

Trust. The arbitrage process, which in 

general provides investors the 

opportunity to profit from differences in 

prices of assets, increases the efficiency 

of the markets, serves to prevent 

potentially manipulative efforts and can 

be expected to operate efficiently in the 

case of the Shares and the foreign 

currency. If the price of the Shares 

deviates enough from the price of the 

foreign currency to create a material 

discount or premium, an arbitrage 

opportunity is created. If the Shares are 

inexpensive compared to foreign 

currency that underlies them, an 

Authorized Participant, either on its 

own behalf or acting as agent for 

investors, arbitrageurs or traders, may 

buy the Shares at a discount, 

immediately redeem them in exchange 

for the foreign currency and sell the 

foreign currency in the cash market at 

a profit. If the Shares are expensive 

compared to the foreign currency that 

underlies them, an Authorized 

Participant may sell the Shares short, 

buy enough foreign currency to create 

the number of Shares sold short, acquire 

the Shares through the creation process 

and deliver the Shares to close out the 

short position.14 In both instances the 

arbitrageur serves efficiently to correct 

price discrepancies between the Shares 

and the underlying foreign currency. 

Issuance of the Shares 

Each Trust creates and redeems 

Shares in Baskets on a continuous basis. 

A Basket is a block of 50,000 Shares. 

The creation and redemption of Baskets 

requires the delivery to the Trust or the 

distribution by the Trust of the amount 

of the applicable foreign currency 

represented by the Baskets being created 

or redeemed. This amount is based on 

the combined NAV per Share of the 

number of Shares included in the 

Baskets being created or redeemed, 

determined on the day the order to 

create or redeem Baskets is accepted by 

the Trustee. 

Additional information regarding an 

overview of the foreign exchange 

industry, the specific foreign currency 

underlying each issue of Shares, 

creation and redemption procedures, 

risk factors, distributions, fees and 

expenses, and clearance and settlement 

procedures is available in the 

Registration Statements. 

Valuation of the Applicable Foreign 

Currency, Definition of Net Asset Value 

and Adjusted Net Asset Value 

The Trustee calculates, and the 

Sponsor publishes, each Trust’s NAV 

each business day. To calculate the 

NAV, the Trustee adds to the amount of 

foreign currency in the Trust at the end 

of the preceding day accrued but unpaid 

interest, the foreign currency receivable 

under pending purchase orders and the 

value of other Trust assets, and subtracts 

the accrued but unpaid Sponsor’s fee, 

the foreign currency payable under 

pending redemption orders and other 

Trust expenses and liabilities, if any. 

The result is the NAV of the Trust for 

that business day. The Trustee shall also 

divide the NAV of each Trust by the 

number of Shares outstanding for the 

date of the evaluation then being made, 

which figure is the ‘‘NAV per Share.’’

The NAV will be expressed in USD 

based on the Closing Spot Rate 15 as 

determined by WM/Reuters at 4:00 p.m. 

(London time). If, on a particular 

evaluation day, the Closing Spot Rate 

has not been determined and 

announced by 6 p.m. (London time), 

then the most recent Closing Spot Rate 

shall be used to determine the NAV of 

the Trust unless the Trustee, in 

consultation with the Sponsor, 

determines that such price is 

inappropriate to use as the basis for 

such valuation. In the event that the 

Trustee and the Sponsor determine that 

the most recent Closing Spot Rate is not 

an appropriate basis for valuation of the 

Trust’s currency, the Trustee and the 

Sponsor shall determine an alternative 

basis or such evaluation to be employed 

by the Trustee. Such an alternative basis 

may include reference to the market 

price of futures contracts that reflect the 

value of the foreign currency relative to 

the USD. The use of any alternative 

basis to determine NAV would be 

disclosed on the Trust’s Web site. The 

Trustee also determines the NAV per 

Share, which equals the NAV of the 

Trust divided by the number of 

outstanding Shares. The Sponsor 

publishes the NAV and NAV per Share 

for each Trust on each day that the 

Exchange is open for regular trading on 

the Trusts’ Web site, http:// 

www.currencyshares.com.16

Availability of Information Regarding 

Foreign Currency Prices 

Currently, the Consolidated Tape Plan 

does not provide for dissemination of 

the spot price of a foreign currency over 

the Consolidated Tape. However, there 

is disseminated over the Consolidated 

Tape the last sale price for the Shares, 

as is the case for all equity securities 

traded on the Exchange (including 

exchange-traded funds). In addition, 

there is a considerable amount of 

foreign currency price and market 

information available on public Web 

sites and through professional and 

subscription services. As is the case 

with equity securities generally and 

exchange-traded funds specifically, in 

most instances, real-time information is 

only available for a fee, and information 

available free of charge is subject to 

delay (typically, 15 to 20 minutes). 

Complete real-time data for foreign 

currency futures and options on futures 

prices traded on the CME are also 

available by subscription from 

information service providers. The CME 

also provides delayed futures and 

options information on current and past 

trading sessions and market news free of 

charge on their respective Web sites. 

Investors may obtain, 24 hours a day, 

continuously updated every 15 seconds, 

foreign exchange pricing information 

based on the spot price of the applicable 

foreign currency from various financial 

information service providers, which 

service providers include Bloomberg, 

(http://www.bloomberg.com/markets/ 

currencies/fxc.html), CBS Market Watch 

(http://www.marketwatch.com/tools/ 

stockresearch/globalmarkets), Yahoo! 

Finance (http:// 

www.finance.yahoo.com/currency), 

http://www.moneycentral.com, http:// 

www.cnnfn.com and http:// 

www.reuters.com. Such service 

providers provide spot price or currency 

conversion information about the 

mstockstill on PROD1PC66 with NOTICES

49526 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 

17There may be incremental differences in the 

foreign currency spot price among the various 

information service sources. While the Exchange 

believes the differences in the foreign currency spot 

price may be relevant to those entities engaging in 

arbitrage or in the active daily trading of the 

applicable foreign currency or derivatives thereon, 

the Exchange believes such differences are likely of 

less concern to individual investors intending to 

hold the Shares as part of a long-term investment 

strategy. 

18See, e.g., Securities Exchange Act Release No. 

46252 (July 24, 2002), 67 FR 49715 (July 31, 2002) 

(SR–Amex–2001–35) (noting that quote and trade 

information regarding debt securities is widely 

available to market participants from a variety of 

sources, including broker-dealers, information 

service providers, newspapers and Web sites). 

19The Trusts’ Web site’s foreign currency spot 

prices will be provided by FactSet Research 

Systems (http://www.factset.com). FactSet Research 

Systems is not affiliated with the Trusts, Trustee, 

Sponsor, Depository, Distributor or the Exchange. 

20The midpoint will be calculated by the 

Sponsor. The midpoint is used for purposes of 

calculating the premium or discount of the Shares. 

21The intraday indicative value of the Shares is 

analogous to the intraday optimized portfolio value 

(sometimes referred to as the IOPV), indicative 

portfolio value and the intraday indicative value 

(sometimes referred to as the IIV) associated with 

the trading of exchange-traded funds. See, e.g., 

Securities Exchange Act Release No. 46686 (October 

18, 2002), 67 FR 65388 (October 24, 2002) (SR–

NYSE–2002–51) for a discussion of indicative 

portfolio value in the context of an exchange-traded 

fund. 

22The last sale price of the Shares in the 

secondary market is available on a real-time basis 

for a fee from regular data vendors. 

23Pursuant to NYSE Arca Equities Rule 7.34(a), 

the NYSE Arca Marketplace trading hours for 

exchange-traded funds are as follows: (1) Opening 

trading session—4:00 a.m. to 9:30 a.m. ET; (2) core 

trading session—9:30 a.m. to 4:15 p.m. ET; and (3) 

late trading session—4:15 p.m. to 8:00 p.m. ET. The 

Sponsor has represented to the Exchange that the 

spot price will be available on the Trust’s Web site 

without interruption 24 hours a day, seven days a 

week. 

24E-mail from Michael Cavalier, Associate 

General Counsel, NYSE Group, Inc., to Edward Y. 

Cho, Special Counsel, Division of Trading and 

Markets, Commission, dated August 14, 2008 

(confirming that the Trusts are not required to 

comply with Rule 10A–3 under the Act, 17 CFR 

240.10A–3, for the initial and continued listing of 

the Shares). 

foreign currencies. Many of these sites 

offer price quotations drawn from other 

published sources, and as the 

information is supplied free of charge, it 

generally is subject to time delays. In 

addition, major market data vendors 

regularly report current currency 

exchange pricing for a fee for other 

currencies.17 In addition, the Trusts’

Web site provides ongoing pricing 

information for the applicable foreign 

currency spot prices and the Shares. 

Market prices for the Shares are 

available from a variety of sources, 

including brokerage firms, financial 

information Web sites and other 

information service providers. The NAV 

of the Trusts is published by the 

Sponsor on each day that the Exchange 

is open for regular trading and is posted 

on the Trusts’ Web site. Like bond 

securities traded in the OTC market 

with respect to which pricing 

information is available directly from 

bond dealers, current foreign currency 

spot prices are also generally available 

with bid/ask spreads from foreign 

currency dealers.18 Quotation and last 

sale information for the Shares will be 

made available via the Consolidated 

Tape. 

In addition, the Trusts’ Web site 

(http://www.currencyshares.com) 

provides the following information: (1) 

The spot price for each applicable 

foreign currency,19 including the bid 

and offer and the midpoint between the 

bid and offer for the foreign currency 

spot price, updated every 5 to 10 

seconds 20 which is an essentially realtime basis; (2) an intraday indicative 

value (‘‘IIV’’) per share for the Shares 

calculated by multiplying the indicative 

spot price of the applicable foreign 

currency by the quantity of foreign 

currency backing each Share, updated at 

least every 15 seconds 21; (3) a delayed 

indicative value (subject to a 20 minute 

delay), which is used for calculating 

premium/discount information; (4) 

premium/discount information, 

calculated on a 20 minute delayed basis; 

(5) the NAV of each Trust as calculated 

each business day by the Trustee; (6) 

accrued interest per Share; (7) the 

Basket Amount for each applicable 

foreign currency; and (8) the last sale 

price of the Shares as traded in the U.S. 

market, subject to a 20-minute delay, as 

it is provided free of charge.22 On the 

Trusts’ Web site, the foreign currency 

spot price is available and disseminated 

at least every 15 seconds and the IIV per 

Share is calculated and disseminated at 

least every 15 seconds during NYSE 

Arca’s Core Trading Session.23 The 

Exchange will provide on its own public 

Web site (http://www.nyse.com) a link 

to the Trusts’ Web site. 

Initial and Continued Listing Criteria 

The Shares would be subject to the 

criteria for initial and continued listing 

of Currency Trust Shares under NYSE 

Arca Equities Rules 8.202. A minimum 

of two Creation Units (at least 100,000 

Shares) would be required to be 

outstanding at the start of trading. This 

minimum number of Shares required to 

be outstanding at the start of trading 

would be comparable to requirements 

that have been applied to previously 

listed series of exchange-traded funds. 

The Exchange believes that the 

proposed minimum number of Shares 

outstanding at the start of trading is 

sufficient to provide market liquidity. 

The Exchange would remove the Shares 

from trading and listing upon 

termination of the Trusts.24

Trading Rules 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. The trading hours for 

the Shares on the Exchange are the same 

as those set forth in NYSE Arca Equities 

Rule 7.34 (4 a.m. to 8 p.m. Eastern time). 

The minimum trading increment for 

Shares on the Exchange would be $0.01. 

NYSE Arca Equities Rules 8.202(g)–(i) 

set forth certain restrictions on ETP 

Holders acting as registered Market 

Makers in the Shares to facilitate 

surveillance. NYSE Arca Equities Rule 

8.202(h) requires that the ETP Holder 

acting as a registered Market Maker in 

the Shares provide the Exchange with 

information relating to its trading in the 

applicable foreign currency, options, 

futures or options on futures on such 

currency, or any other derivatives based 

on such currency. NYSE Arca Equities 

Rule 8.202(i) prohibits the ETP Holder 

acting as a registered Market Maker in 

the Shares from using any material 

nonpublic information received from 

any person associated with an ETP 

Holder or employee of such person 

regarding trading by such person or 

employee in the applicable foreign 

currency, options, futures or options on 

futures on such currency, or any other 

derivatives based on such currency 

(including the Shares). In addition, 

NYSE Arca Equities Rule 8.202(g) 

prohibits the ETP Holder acting as a 

registered Market Maker in the Shares 

from being affiliated with a market 

maker in the applicable foreign 

currency, options, futures or options on 

futures on such currency, or any other 

derivatives based on such currency, 

unless adequate information barriers are 

in place, as provided in NYSE Arca 

Equities Rule 7.26. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

a Trust. Trading may be halted because 

of market conditions or for reasons that, 

in the view of the Exchange, make 

trading in the Shares inadvisable. These 

may include: (i) The extent to which 

trading is not occurring in the 

applicable underlying foreign currency; 

or (ii) whether other unusual conditions 

or circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. In addition, trading 

in the Shares could be halted pursuant 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 49527 

25See NYSE Arca Equities Rule 7.12. 

26See Securities Exchange Act Release No. 58111 

(July 7, 2008), 73 FR 40643 (July 15, 2008) (SR–

NYSEArca–2008–50). 

27For a list of the current members of ISG, see 

http://www.isgportal.org. 

28CME is a member of ISG. 

29NYSE Arca Equities Rule 9.2(a) provides that 

ETP Holders, before recommending a transaction, 

must have reasonable grounds to believe that the 

recommendation is suitable for the customer based 

on any facts disclosed by the customer as to his 

other security holdings and as to his financial 

situation and needs. Further, the rule provides, 

with a limited exception, that prior to the execution 

of a transaction recommended to a non-institutional 

customer, ETP Holders shall make reasonable 

efforts to obtain information concerning the 

customer’s financial status, tax status, investment 

objectives, and any other information that they 

believe would be useful to make a recommendation. 

See Securities Exchange Act Release No. 54045 

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

PCX–2005–115). 

30 15 U.S.C. 78k(d)(1). 

31 15 U.S.C. 78f(b). 

32 15 U.S.C. 78f(b)(5). 

to the Exchange’s ‘‘circuit breaker’’

rule.25

If the IIV or the value of foreign 

currency is not being calculated or 

widely disseminated as required, the 

Exchange may halt trading during the 

day in which the interruption to the 

calculation or wide dissemination of the 

IIV or the foreign currency value occurs. 

If the interruption to the calculation or 

wide dissemination of the IIV or the 

foreign currency value persists past the 

trading day in which it occurred, the 

Exchange would halt trading no later 

than the beginning of the trading day 

following the interruption. Under NYSE 

Arca Equities Rule 7.34(a)(5), if the 

Exchange becomes aware that the NAV 

is not being disseminated to all market 

participants at the same time, it will halt 

trading in the Shares until such time as 

the NAV is available to all market 

participants.26

Surveillance 

The Exchange intends to utilize its 

existing surveillance procedures 

applicable to derivative products, 

including Currency Trust Shares, to 

monitor trading in the Shares. The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

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 the Intermarket Surveillance Group 

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

members of ISG.27 Specifically, the 

Exchange can obtain such information 

from the CME in connection with 

foreign currency futures and options on 

futures trading on the CME pertaining to 

futures and options on futures on the 

Russian Ruble and South African 

Rand.28 Therefore, as noted earlier, CME 

surveillance and CFTC oversight would 

pertain only to futures and options on 

futures on the Russian Ruble and South 

African Rand. In addition, the Exchange 

also has a general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

Information Bulletin 

Prior to listing the Shares on the 

Exchange, the Exchange would inform 

its ETP Holders in an Information 

Bulletin (‘‘Bulletin’’) of the special 

characteristics and risks associated with 

trading the Shares. Specifically, the 

Bulletin would discuss the following: 

(i) The procedures for purchases and 

redemptions of Shares in Baskets (and 

that Shares are not individually 

redeemable); (ii) NYSE Arca Equities 

Rule 9.2(a),29 which imposes a duty of 

due diligence on its ETP Holders to 

learn the essential facts relating to every 

customer prior to trading the Shares; 

(iii) how information regarding the IIV 

and applicable foreign currency value is 

disseminated; (iv) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; (v) the 

risks involved in trading the Shares 

during the Opening and Late Trading 

Sessions when an updated IIV will not 

be calculated or publicly disseminated; 

and (vi) trading information. 

The Bulletin would also state that the 

number of units of the applicable 

foreign currency required to create a 

Basket or to be delivered upon 

redemption of a Basket may gradually 

decrease over time in the event that a 

Trust is required to withdraw or sell 

units of foreign currency to pay the 

Trust’s expenses, and that if done at a 

time when the price of the applicable 

foreign currency is relatively low, it 

could adversely affect the value of the 

Shares. In addition, the Bulletin would 

reference that the Trusts are subject to 

various fees and expenses described in 

the Registration Statements. The 

Bulletin would also reference the fact 

that there is no regulated source of last 

sale information regarding foreign 

currency, and that the Commission has 

no jurisdiction over the trading of 

foreign currency. The Bulletin would 

also discuss any exemptive, no-action 

and interpretive relief granted by the 

Commission from Section 11(d)(1) of the 

Act 30 and certain rules under the Act. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) 31 of the Act, in general, and 

Section 6(b)(5),32 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. The Exchange believes that the 

proposed rule change will facilitate the 

listing and trading of additional types of 

exchange-traded products that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. In addition, the 

listing and trading criteria set forth in 

Rule 8.202 are intended to protect 

investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NYSE Arca 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. 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–NYSEArca–2008–81 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

mstockstill on PROD1PC66 with NOTICES

49528 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 

33 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

34 15 U.S.C. 78f(b)(5). 

35See supra note 4. 

36 15 U.S.C. 78k–1(a)(1)(C)(iii). 37See supra note 16. 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2008–81. 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 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–2008–81 and 

should be submitted on or before 

September 11, 2008. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.33 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,34 which 

requires that the rules of an exchange be 

designed, among other things, to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Commission notes 

that it previously approved the original 

listing and trading of shares of other 

CurrencyShares Trusts, and the instant 

proposal is substantively identical to the 

previous proposals.35

The Commission further believes that 

the proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Act,36 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 

and last-sale price information for the 

Shares are disseminated over the 

Consolidated Tape. The Trust 

disseminates the foreign currency spot 

prices for each of the Trusts and the IIV 

per Share at least every 15 seconds on 

its Web site during the Core Trading 

Session of the Exchange. In addition, 

the Sponsor publishes the NAV and 

NAV per Share for each Trust on each 

day that the Exchange is open for 

regular trading on the Trusts’ Web site. 

Investors may obtain on a 24-hour basis 

foreign currency pricing information 

based on the foreign currency spot price 

of each applicable foreign currency from 

various financial information service 

providers. Current spot prices are also 

generally available with bid/ask spreads 

from foreign exchange dealers. In 

addition, the Trusts’ Web site provides 

ongoing pricing information for the 

applicable foreign currency spot prices 

and the Shares. The Exchange 

represents that complete, real-time data 

for foreign currency futures and options 

prices traded on CME are also available 

by subscription from information 

service providers. CME also provides 

delayed futures and options information 

on current and past trading sessions and 

market news free of charge on its Web 

site. There are a variety of other public 

Web sites available at no charge that 

provide information on the foreign 

currencies underlying the Shares, 

including spot price or currency 

conversion information about the 

foreign currencies. In addition, the 

Trusts’ Web site provides the following 

information: (1) The spot price for each 

applicable foreign currency, including 

the bid and offer and the midpoint 

between the bid and offer for the foreign 

currency spot price, updated every 5 to 

10 seconds; (2) IIV, updated at least 

every 15 seconds; (3) a delayed 

indicative value (subject to a 20 minute 

delay), which is used for calculating 

premium/discount information; (4) 

premium/discount information, 

calculated on a 20 minute delayed basis; 

(5) accrued interest per Share; (6) NAV 

of each Trust; (7) the Basket amount for 

each applicable foreign currency; and 

(8) the last-sale price of the Shares as 

traded in the U.S. markets, subject to a 

20-minute delay. The Exchange states 

that it will provide on its own Web site 

a link to the Trusts’ Web site. 

Furthermore, the Commission 

believes that the proposal to list and 

trade the Shares is reasonably designed 

to promote fair disclosure of 

information that may be necessary to 

price the Shares appropriately. The 

Commission notes that the Exchange 

will obtain a representation from the 

Trusts that the NAV per Share for each 

Trust would be calculated daily and 

made available to all market 

participants at the same time.37 NYSE 

Arca Equities Rule 8.202(i) provides 

that, in connection with trading in the 

applicable foreign currency, options, 

futures or options on futures on such 

currency, or any other derivatives based 

on such currency, including Currency 

Trust Shares, an ETP Holder acting as a 

Market Maker (as defined in NYSE Arca 

Equities Rule 1.1(u)) in the Shares is 

restricted from using any material, nonpublic information received from any 

person associated with such ETP Holder 

who is trading such foreign currency, 

options, futures or options on futures on 

such currency, or any other derivatives 

based on such currency. In addition, 

NYSE Arca Equities Rule 8.202(g) 

prohibits an ETP Holder acting as a 

registered Market Maker in the Shares 

from being affiliated with a market 

maker in the applicable foreign 

currency, options, futures or options on 

futures on such currency, or any other 

derivatives based on such currency, 

unless adequate information barriers are 

in place, as provided in NYSE Arca 

Equities Rule 7.26. 

The Commission also believes that the 

Exchange’s trading halt rules are 

reasonably designed to prevent trading 

in the Shares when transparency is 

impaired. NYSE Arca Equities Rule 

8.202(e)(2) provides that, when the 

Exchange is the listing market, if the 

value of the underlying foreign currency 

or IIV is no longer calculated or 

available on at least a 15-second delayed 

basis, the Exchange would consider 

suspending trading in the Shares. NYSE 

Arca Equities Rule 8.202(e)(2) also 

provides that the Exchange may seek to 

delist the Shares in the event the value 

of the applicable foreign currency or IIV 

is no longer calculated or available as 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Notices 49529 

38See supra note 26 and accompanying text. 

39See supra notes 3 and 4. 

40 15 U.S.C. 78s(b)(2). 

41 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. 58099 

(July 3, 2008), 73 FR 39769 (‘‘Notice’’). 

4The ‘‘Complex Orders’’ that may be traded on 

Phlx XL are spread orders, as defined in Phlx Rule 

1066(f)(1); straddle orders, as defined in Phlx Rule 

1066(f)(2); combination orders, as defined in Phlx 

Rule 1066(f)(3); ratio orders; and collar (risk 

reversal) orders. See Phlx Rule 1080, Commentary 

.08(a)(i). 

5See Phlx Rule 1080, Commentary .08(e)(ix). 

6See Notice, supra note 3. 

7See Phlx Rule 1080, Commentary .08(d)(ii). 

However, as described in greater detail in the 

Notice, supra note 3, a COOP will not be initiated 

if any of the conditions in Phlx Rule 1080, 

Commentary .08(c)(ii) exist. 

8See Phlx Rule 1080, Commentary .08(d)(i). A 

‘‘Complex Order Strategy’’ is any Complex Order 

involving any option series that is priced at a net 

debit or credit based on the relative prices of each 

component. See Phlx Rule 1080, Commentary 

.08(a)(ii). 

9See Phlx Rule 1080, Commentary .08(d)(ii)(A)(3) 

and (4). 

10A ‘‘COLA-eligible order’’ is a Complex Order 

(a) identified by way of a COOP; or (b) that, upon 

receipt, improves the cPBBO (i.e., the Phlx best net 

Continued 

required. In addition, NYSE Arca 

Equities Rule 7.34(a)(5) provides that, if 

the Exchange becomes aware that the 

NAV is not being disseminated to all 

market participants at the same time, it 

will halt trading in the Shares until such 

time as the NAV is available to all 

market participants.38

The Commission further believes that 

the trading rules and procedures to 

which the Shares will be subject 

pursuant to this proposal are consistent 

with the Act. The Exchange has 

represented that any securities listed 

pursuant to this proposal will be 

deemed equity securities and be subject 

to existing Exchange rules governing the 

trading of equity securities. 

In support of this proposal, the 

Exchange has made the following 

representations: 

(1) The Exchange represents that it 

intends to utilize its existing 

surveillance procedures applicable to 

derivative products, including Currency 

Trust Shares, to monitor trading in the 

Shares and that such procedures are 

adequate to properly monitor Exchange 

trading of the Shares in all trading 

sessions and to deter and detect 

violations of Exchange rules and 

applicable federal securities laws. The 

Exchange may obtain information via 

ISG from other exchanges that are 

members of ISG. Specifically, the 

Exchange can obtain such information 

from CME in connection with foreign 

currency futures and options on futures 

trading on CME pertaining to futures 

and options on futures on the Russian 

ruble and South African rand. 

(2) The Exchange represents that if the 

interruption to the calculation or wide 

dissemination of the value of the 

underlying foreign currency or IIV 

persists past the trading day in which it 

occurred, the Exchange would halt 

trading no later than the beginning of 

the trading day following the 

interruption. 

(3) Prior to listing and trading the 

Shares, the Exchange represents that it 

will inform its ETP Holders in the 

Bulletin of the special characteristics 

and risks associated with trading the 

Shares. 

This approval order is based on the 

Exchange’s representations. 

The Commission finds good cause for 

approving this proposal before the 30th 

day after the publication of notice 

thereof in the Federal Register. As 

noted above, the Commission 

previously approved the original listing 

and trading, and trading pursuant to 

UTP, of shares of other CurrencyShares 

Trusts.39 The Commission presently is 

not aware of any regulatory issue that 

should cause it to revisit those findings 

or would preclude the listing and 

trading of the Shares on the Exchange. 

Accelerating approval of this proposed 

rule change would allow the Shares to 

be listed on the Exchange without 

undue delay. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,40 that the 

proposed rule change (SR–NYSEArca–

2008–81), as modified by Amendment 

No. 1 thereto, be, and it hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.41

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19356 Filed 8–20–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58361; File No. SR–Phlx–

2008–50] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Order Approving a Proposed Rule 

Change Relating to the Electronic 

Handling of Complex Orders 

August 14, 2008. 

I. Introduction 

On July 1, 2008, the Philadelphia 

Stock Exchange, Inc. (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposal to adopt Phlx 

Rule 1080, Commentary .08, ‘‘Complex 

Orders on Phlx XL,’’ to provide for the 

electronic handling of certain Complex 

Orders on Phlx XL, the Phlx’s electronic 

trading platform for options. The 

proposed rule change was published for 

comment in the Federal Register on July 

10, 2008.3 The Commission received no 

comments regarding the proposed rule 

change. This order approves the 

proposed rule change. 

II. Description of the Proposal 

The Phlx proposes to adopt Phlx Rule 

1080, Commentary .08 to provide for the 

electronic handling of certain Complex 

Orders on Phlx XL.4 Phlx members and 

Phlx XL participants quoting and 

trading in open outcry will be required 

to submit quotes and/or orders 

electronically to participate in the 

electronic Complex Order system.5

As described briefly below and in 

greater detail in the Notice,6 the 

proposal establishes a Complex Order 

Opening Process (‘‘COOP’’), a Complex 

Order Book (‘‘CBOOK’’), and a Complex 

Order Live Auction (‘‘COLA’’). In 

addition, the proposal includes a 

Strategy Price Protection (‘‘SPP’’) feature 

that will prevent certain Complex 

Orders from trading at prices outside of 

specified pre-set limits. 

COOP 

After trading has opened in each 

component of a pending Complex Order 

or re-opened following a trading halt, 

the Phlx XL system will initiate the 

COOP.7 There will be one COOP per 

Complex Order Strategy.8 The COOP is 

composed of two components: (1) The 

COOP Timer, a period ranging from 0 to 

600 seconds, as determined by the Phlx, 

during which the Complex Order will 

not trade; and (2) the COOP Evaluation, 

the period following the conclusion of 

the COOP Timer during which the Phlx 

XL system will determine which 

Complex Order on the CBOOK, if any, 

will be eligible for a COLA. Complex 

Orders received during the COOP Timer 

and the COOP Evaluation will reside on 

the CBOOK and will be visible to Phlx 

XL participants.9

At the conclusion of the COOP Timer, 

the Phlx XL system will identify the 

‘‘COLA-eligible order,’’ 10 if any, from 

mstockstill on PROD1PC66 with NOTICES