Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices 6757 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). 

19 17 CFR 240.19b–4(f)(6)(iii). 

20 Id. 

21 Id. 

22For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

impact of the proposed rule on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

general, to protect investors and the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change 

does not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act17 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.18

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.19 However, Rule 19b–

4(f)(6)(iii)20 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has satisfied the five-day 

prefiling requirement.21 In addition, the 

Exchange has requested that the 

Commission waive the 30-day preoperative delay and designate the 

proposed rule change to become 

operative upon filing. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because it would allow the Exchange to 

immediately implement this proposal 

and would simplify the existing 

procedures for reallocating securities 

based upon the request of the listed 

company by eliminating the mediation 

process contained in Section 806.01. 

The Commission designates the 

proposal to become effective and 

operative upon filing.22

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 the furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml ); or 

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

Number SR–NYSE–2008–08 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–08. 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 such filing also will be available for 

inspection and copying at the principal 

office of 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–

2008–08 and should be submitted on or 

before February 26, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–1999 Filed 2–4–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57220; File No. SR–

NYSEArca–2008–08] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Pertaining to the 

Imposition of Fines for Minor Rule 

Violations 

January 29, 2008. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 

18, 2008, 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 substantially 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 proposes to amend 

NYSE Arca Rule 6.24, ‘‘Exercise of 

Option Contracts,’’ and NYSE Arca Rule 

10.12, ‘‘Minor Rule Plan.’’ The text of 

the proposed rule change is available on 

the Exchange’s Web site (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, the 

Exchange included statements 


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6758 Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices 

3The Exchange, in its discretion, processes 

subsequent violations, after the third violation, 

according to NYSE Arca Rule 10.4. See NYSE Arca 

Rule 10.12(h), n.1. 

4See letter to Richard Holley, Senior Special 

Counsel, Division of Trading and Markets, 

Commission, from Nyieri Nazarian, Assistant 

General Counsel, American Stock Exchange LLC 

(‘‘Amex’’), dated October 29, 2007. 

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

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

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. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NYSE Arca Rule 6.24 contains special 

procedures that apply to the exercise of 

options on the last business day before 

expiration. The Exchange proposes to 

amend NYSE Arca Rule 6.24 to: (i) Add 

a reference to new terminology; (ii) 

make minor revisions to the procedures 

related to exercising option contracts; 

(iii) amend Commentary .08 of NYSE 

Arca Rule 6.24 to authorize the 

Exchange to sanction an OTP Holder or 

OTP Firm that fails to follow NYSE Arca 

Rule 6.24, pursuant to the Minor Rule 

Plan (‘‘MRP’’); and (iv) add the 

recommended sanctions to the MRP 

contained in NYSE Arca Rule 10.12. 

The proposed changes are described 

briefly below. 

An option holder desiring to exercise 

or not exercise expiring options must 

either: (i) Take no action and allow 

exercise determinations to be made in 

accordance with the Options Clearing 

Corporation’s (‘‘OCC’’) Ex-by-Ex 

procedures, where applicable; or (ii) 

submit a Contrary Exercise Advice 

(‘‘CEA’’) to the Exchange. A CEA is a 

communication to either: (i) not exercise 

an option that would be automatically 

exercised under OCC’s Ex-by-Ex 

procedure, or (ii) exercise an option that 

would not be automatically exercised 

under OCC’s Ex-by-Ex procedure. A 

CEA is also referred to within the 

options industry as an Expiring Exercise 

Declaration (‘‘EED’’). While the form 

itself may be called by a different name, 

the purpose and procedure for 

submitting an EED is identical to that of 

a CEA. The Exchange proposes adding 

a parenthetical reference to EEDs within 

NYSE Arca Rule 6.24. 

An OTP Holder or OTP Firm that 

manually submits a CEA to the 

Exchange does so by completing a form 

and putting it in the Exchange’s 

Contrary Exercise Advice Box. Going 

forward, the Exchange will discontinue 

the use of the Contrary Exercise Advice 

Box; and instead, an OTP Holder or OTP 

Firm will submit a CEA directly to a 

designated representative of the 

Exchange’s Options Surveillance 

Department. 

Commentary .08 to NYSE Arca Rule 

6.24 provides that the failure of any 

OTP Holder to follow the provisions 

contained in this rule may be referred to 

the Ethics and Business Conduct 

Committee (‘‘EBCC’’) and result in the 

assessment of a fine, which may 

include, but is not limited to, the 

disgorgement of potential economic gain 

obtained or loss avoided by the subject 

exercise. Referral to the EBCC involves 

a formal disciplinary proceeding. NYSE 

Arca proposes to add a provision to 

Commentary .08 that would authorize 

the Exchange to sanction an OTP Holder 

or OTP Firm that fails to follow NYSE 

Arca Rule 6.24, pursuant to the MRP. 

The Exchange would retain the 

authority to refer violators to the EBCC 

for formal disciplinary proceedings. 

The Exchange also proposes adding 

the phrase ‘‘or OTP Firm’’ to 

Commentary .08 to NYSE Arca Rule 

6.24. The Exchange has always intended 

to apply NYSE Arca Rule 6.24 equally 

to both OTP Holders and OTP Firms. 

The addition of OTP Firms will codify 

the original intent of NYSE Arca Rule 

6.24. 

Under this proposal, violators of 

NYSE Arca Rule 6.24 may be subject to 

MRP fines based on the number of 

violations occurring within a rolling 24- 

month period. An individual OTP 

Holder would be subject to a fine of 

$500 for the first offense, $1,000 for the 

second offense, and $2,500 for the third 

offense. An OTP Firm would be subject 

to a $1,000 fine for the first offense, 

$2,500 for the second offense, and 

$5,000 for a third offense.3 A list of the 

proposed fines would be added to the 

MRP fine schedule in NYSE Arca Rule 

10.12. The MRP provides a reasonable 

means of addressing rule violations that 

do not necessarily rise to the level of 

requiring formal disciplinary 

proceedings, while also providing a 

greater flexibility in handling certain 

violations. Adopting a provision that 

would allow the Exchange to sanction 

violators under the MRP by no means 

minimizes the importance of 

compliance with NYSE Arca Rule 6.24. 

The Exchange believes that the violation 

of any of its rules is a serious matter. 

The addition of a sanction under the 

MRP simply serves to add an additional 

method for disciplining violators of 

NYSE Arca Rule 6.24. The Exchange 

would continue to conduct surveillance 

with due diligence and make its 

determination, on a case by case basis, 

whether a fine under the MRP is 

appropriate, or whether a violation 

should be subject to formal disciplinary 

proceedings. 

In addition, the Exchange, as a 

member of the Intermarket Surveillance 

Group (‘‘ISG’’), as well as certain other 

self-regulatory organizations (‘‘SRO’’) 

executed and filed on October 29, 2007 

with the Commission, an Agreement 

pursuant to Section 17(d) of the Act (the 

‘‘17d–2 Agreement’’).4 As set forth in 

the 17d–2 Agreement, the SROs have 

agreed that their respective rules 

concerning the filing of CEAs are 

common rules. As a result, the proposal 

to add CEA/EED violations to the NYSE 

Arca MRP will further result in 

consistency in sanctions among the 

SROs that are signatories to the 17d–2 

Agreement concerning CEA/EED 

violations. 

NYSE Arca Rule 10.12(h)(33) and 

Rule 10.12(k)(i)(33) are presently 

designated as ‘‘Reserved.’’ The 

Exchange proposes to use these reserved 

rule numbers for new NYSE Arca Rule 

10.12(h)(33), which would reference 

CEA/EED violations pursuant to Rule 

6.24, and new NYSE Arca Rule 

10.12(k)(i)(33), which would include the 

recommended fines for CEA/EED 

violations. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

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

furthers the objectives of Section 6(b)(5) 

of the Act,6 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. Specifically, the Exchange 

believes that the proposed rule change 

will strengthen its ability to carry out its 

oversight responsibilities as an SRO and 

reinforce its surveillance and 

enforcement functions. Additionally, 

the Exchange believes that the proposed 

rule change will promote consistency in 

minor rule violations and respective 

SRO reporting obligations as set forth 

pursuant to Rule 19d–1(c)(2) under the 


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Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices 6759 

7 17 CFR 240.19d–1(c)(2). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Currency-Linked Securities are securities that 

provide for payment at maturity of a cash amount 

based on the performance of one or more 

currencies, or options or currency futures or other 

currency derivatives or Currency Trust Shares (as 

defined in NYSE Arca Equities Rule 8.202), or a 

basket or index of any of the foregoing (‘‘Currency 

Reference Asset’’). See NYSE Arca Equities Rule 

5.2(j)(6). 

Act,7 which governs minor rule 

violation plans. 

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 

The Exchange neither solicited nor 

received comments on the proposal. 

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 such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

Number SR–NYSEArca–2008–08 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2008–08. 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 such 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–2008–08 and 

should be submitted on or before 

February 26, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–1967 Filed 2–4–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57227; File No. SR–

NYSEArca–2008–12] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to Pricing 

Information for Components 

Underlying Currency-Linked Securities 

January 29, 2008. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 

17, 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 (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been substantially 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 proposes to amend 

NYSE Arca Equities Rule 

5.2(j)(6)(B)(III)(1), which sets forth the 

Exchange’s initial listing criteria for 

Currency-Linked Securities,3 to permit 

the listing and trading of CurrencyLinked Securities where the pricing 

information for one or more currencies 

comprising the Currency Reference 

Asset is the generally accepted forward 

price for the currency exchange rate in 

question. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE Arca Equities Rule 

5.2(j)(6)(B)(III)(1) to permit the listing of 

Currency-Linked Securities where the 

pricing information for some or all of 

the components of the Currency 

Reference Asset is the generally 

accepted forward price for the currency 

exchange rate in question. The ability 

for an issuer to use forward pricing 

information under proposed NYSE Arca 

Equities Rule 5.2(j)(6)(B)(III)(1)(b) for 

any component of a Currency Reference 


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