6762 Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Multiple Fund Shares seek to provide 

investment results, before fees and expenses, that 

correspond to a specific multiple of the percentage 

performance on a given day of a particular foreign 

or domestic stock index. 

4 Inverse Fund Shares seek to provide investment 

results, before fees and expenses, that correspond 

to the inverse (opposite) of the percentage 

performance on a given day of a particular foreign 

or domestic stock index by a specified multiple. 

5See Securities Exchange Act Release Nos. 56763 

(November 7, 2007), 72 FR 94103 (November 14, 

2007) (SR–NYSEArca–2007–81); 56601 (October 2, 

2007), 72 FR 57625 (October 10, 2007) (SR–

NYSEArca–2007–79); 55125 (January 18, 2007), 72 

FR 3462 (January 25, 2007) (SR–NYSEArca–2006–

87); 54026 (June 21, 2006), 71 FR 36850 (June 28, 

2006) (SR–PCX–2005–115). 

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–2008–12 and 

should be submitted on or before 

February 26, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–1969 Filed 2–4–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57226; File No. SR–

NYSEArca–2008–03] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and Order 

Granting Accelerated Approval of 

Proposed Rule Change, Relating to 

Rules 5.3 and 5.4 To Enable Listing 

and Trading of Options on Multiple 

Fund and Inverse Fund Shares 

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 8, 

2008, NYSE Arca, Inc. (the ‘‘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 and II below, which Items 

have been substantially prepared by the 

Exchange. The Commission hereby 

provides notice of filing of the proposed 

rule change and approves the proposed 

rule change on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to revise 

NYSE Arca Rules 5.3 and 5.4 to enable 

listing and trading on the Exchange of 

options on Multiple Fund Shares and 

Inverse Fund Shares. 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 III below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to revise NYSE Arca Rules 5.3 

and 5.4 to enable the listing and trading 

on the Exchange of options on Multiple 

Fund Shares 3 and Inverse Fund 

Shares.4 Multiple and Inverse Fund 

Shares differ from traditional exchangetraded fund shares (‘‘Exchange-Traded 

Fund Shares’’ or ‘‘Fund Shares’’) in that 

they do not merely correspond to the 

performance of a given index, but rather 

attempt to match a multiple or inverse 

of such underlying index performance. 

Currently, Multiple Fund Shares issued 

by ProShares Trust and Rydex ETF 

Trust trade on the Exchange pursuant to 

unlisted trading privileges (‘‘UTP’’) 

under NYSE Arca Equities Rule 

5.2(j)(3).5

In order to achieve investment results 

that provide either a positive multiple 

or inverse of the benchmark index, 

Multiple Fund Shares or Inverse Fund 

Shares may hold a combination of 

financial instruments, including among 

other things: stock index future 

contracts; options on futures; options on 

securities and indices; equity caps, 

collars and floors; swap agreements; 

forward contracts; repurchase 

agreements; and reverse repurchase 

agreements (the ‘‘Financial 

Instruments’’). The underlying 

portfolios of Multiple Fund Shares 

generally will hold at least 85% of their 

assets in the component securities of the 

underlying relevant benchmark index. 

The remainder of any assets is devoted 

to Financial Instruments that are 

intended to create the additional needed 

exposure to such underlying index 

necessary to pursue its investment 

objective. Normally, 100% of the value 

of the underlying portfolios of Inverse 

Fund Shares will be devoted to 

Financial Instruments and money 

market instruments, including U.S. 

government securities and repurchase 

agreements (the ‘‘Money Market 

Instruments’’). Currently, NYSE Arca 

Rule 5.3(g) provides securities deemed 

appropriate for options trading shall 

include shares or other securities that 

are traded on a national securities 

exchange and are defined as an ‘‘NMS 

Stock’’ under Rule 600 of Regulation 

NMS, and that (i) represent an interest 

in a registered investment company 

organized as an open-end management 

investment company, a unit investment 

trust or a similar entity which holds 

securities constituting or otherwise 

based on or representing an investment 

in an index or portfolio of securities, or 

(ii) represent interests in a trust or 

similar entity that holds a specified nonU.S. currency deposited with the trust 

or a similar entity 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 pays the 

beneficial owner interest and other 

distributions on the deposited U.S. 

currency, if any, declared and paid by 

the trust; or (iii) represent commodity 

pool interests principally engaged, 

directly or indirectly, in holding and/or 


rmajette on PROD1PC64 with NOTICES
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices 6763 

6See NYSE Arca Rules 5.49 and 6.9. 

7See NYSE Arca Rule 5.25. 

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

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

managing portfolios or baskets of 

securities, commodity futures contracts, 

options on commodity futures contracts, 

swaps, forward contracts and/or options 

on physical commodities and/or nonU.S. currency (‘‘Commodity Pool 

Units’’). 

The Exchange proposes to amend 

Rule 5.3(g) to expand the type of options 

eligible for listing and trading to include 

options based on Multiple Fund Shares 

and Inverse Fund Shares that may hold 

or invest in any combination of 

securities, Financial Instruments and/or 

Money Market Instruments. Multiple 

Fund Shares and Inverse Fund Shares 

will continue to otherwise satisfy the 

listing standards in Rule 5.3(g). In 

addition, the Exchange proposes minor 

amendments to Rule 5.3(g)(1)(B). 

As set forth in proposed NYSE Arca 

Rule 5.3(g), Multiple Fund Shares and 

Inverse Fund Shares must be traded on 

a national securities exchange and must 

be an ‘‘NMS stock’’ as defined under 

Rule 600 of Regulation NMS. In 

addition, Multiple Fund Shares and 

Inverse Fund Shares must meet either: 

(i) The criteria and guidelines for 

underlying securities set forth in Rule 

5.3(a) and (b); or (ii) be available for 

creation or redemption each business 

day in cash or in kind from or through 

the issuing trust, investment company, 

commodity pool or other issuer at a 

price related to the net asset value. In 

addition, the issuing trust, investment 

company, commodity pool, or other 

issuer is obligated to issue Fund Shares 

in a specified aggregate number even 

though some or all of the investment 

assets needed to be deposited have not 

been received by the issuing trust, 

investment company, commodity pool, 

or other issuer, provided the authorized 

creation participant has undertaken to 

deliver the investment assets as soon as 

possible and such undertaking has been 

secured by the delivery and 

maintenance of collateral consisting of 

cash or cash equivalents satisfactory to 

the issuer of the Fund Shares which 

underlie the option as described in the 

Fund Shares’ prospectus; and (iii) for 

Commodity Pool Units, the Exchange 

has entered into a comprehensive 

surveillance sharing agreement with the 

marketplace or marketplaces with last 

sale reporting that represent(s) the 

highest volume in such commodity 

futures contracts on the specified 

commodities or non-U.S. currency, 

which are utilized by the national 

securities exchange where the 

underlying Commodity Pool Units are 

listed and traded. 

The current continuing or 

maintenance listing standards for 

options on Exchange Traded Fund 

Shares will continue to apply. 

The Exchange proposes to amend 

NYSE Arca Rule 5.4 to indicate that the 

index or portfolio may consist of 

securities, Financial Instruments and/or 

Money Market Instruments. Under the 

applicable continued listing criteria in 

Rule 5.4, options on Exchange-Traded 

Fund Shares may be subject to the 

suspension of opening transactions as 

follows: (1) Non-compliance with Rule 

5.4(k)(1)–(4); (2) following the initial 12- 

month period beginning upon the 

commencement of trading of the 

Exchange-Traded Fund Shares, there are 

fewer than 50 record and/or beneficial 

holders of the Exchange-Traded Fund 

Shares for 30 or more consecutive days; 

(3) the value of the index or portfolio of 

securities, non-U.S. currency, or 

portfolio of commodities including 

commodity futures contracts, options on 

commodity futures contracts, swaps, 

forward contracts, options on physical 

commodities and/or Financial 

Instruments and Money Market 

Instruments on which the ExchangeTraded Fund Shares are based is no 

longer calculated or available; or (4) 

such other event shall occur or 

condition exist that in the opinion of the 

Exchange makes further dealing in such 

options on the Exchange inadvisable. 

Additionally, the Exchange-Traded 

Fund Shares will not be deemed to meet 

the requirement for continued approval, 

and the Exchange shall not open for 

trading any additional series of option 

contracts of the class covering such 

Multiple Fund Shares or Inverse Fund 

Shares, if the Fund Shares are halted 

from trading on their primary market or 

if the Fund Shares are delisted in 

accordance with the terms of NYSE 

Arca Rule 5.4(k). 

The Exchange represents that the 

expansion of the types of investments 

that may be held by Multiple Fund 

Shares or Inverse Fund Shares under 

Rule 5.3(g) will not have any effect on 

the rules pertaining to position and 

exercise limits 6 or margin.7

The Exchange represents that its 

existing surveillance procedures 

applicable to trading in options are 

adequate to properly monitor the 

trading in Multiple Fund Shares options 

and Inverse Fund Shares Options. 

2. Statutory Basis 

The proposal is consistent with 

Section 6(b) of the Act,8 in general, and 

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

in that it is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, 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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose 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. 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–2008–03 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–2008–03. 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 


rmajette on PROD1PC64 with NOTICES
6764 Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices 

10 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

11 15 U.S.C. 78f(b)(5). 

12See NYSE Arca Rules 5.49 and 6.9. 

13See NYSE Arca Rule 5.25. 

14 17 CFR 242.600(b)(47). 

15See supra note 5. 

16See Securities Exchange Act Release Nos. 

56871 (November 30, 2007), 72 FR 68924 

(December 6, 2007) (approving SR–ISE–2007–87 on 

an accelerated basis); 56715 (October 29, 2007), 72 

FR 62287 (November 2, 2007) (approving SR–

CBOE–2007–119 on an accelerated basis); 56650 

(October 12, 2007), 72 FR 59123 (October 18, 2007) 

(SR–Amex–2007–35). 

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

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b-4. 

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

4 17 CFR 240.19b-4(f)(2). 

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 offices 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–2008–03 and 

should be submitted on or before 

February 26, 2008. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful review, 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.10 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,11 which requires that 

an exchange have rules designed, among 

other things, 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. 

Surveillance 

The Commission notes that the 

Exchange has represented that its 

existing surveillance procedures 

applicable to trading options are 

adequate to properly monitor trading in 

Multiple Fund Shares options and 

Inverse Fund Shares options. In 

addition, the Exchange represented that 

the expansion of the types of 

investments that may be held by 

Multiple Fund Shares or Inverse Fund 

Shares under NYSE Arca Rules 5.3(g) 

and 5.4 will not have any effect on the 

rules pertaining to position and exercise 

limits 12 or margin.13

Listing and Trading Options on Fund 

Shares 

The Commission notes that, pursuant 

to the proposed rule change, the 

Exchange represented that the current 

continuing or maintenance listing 

standards for options on Exchange 

Traded Fund Shares will continue to 

apply. These provisions include 

requirements regarding initial and 

continued listing standards, suspension 

of opening transactions, and trading 

halts. Proposed amended NYSE Arca 

Rule 5.3(g), would require that Multiple 

Fund Shares and Inverse Fund Shares 

be traded on a national securities 

exchange and must be an ‘‘NMS stock’’

as defined under Rule 600 of Regulation 

NMS.14

The Commission believes that this 

proposal is necessary to enable the 

Exchange to list and trade options on 

Multiple Fund Shares and Inverse Fund 

Shares such as those currently issued by 

ProShares Trust and Rydex ETF Trust 

that trade on the Exchange pursuant to 

unlisted trading privileges under NYSE 

Arca Equities Rule 5.2(j)(3).15 The 

Commission believes that the ability to 

trade options on the Multiple and 

Inverse Fund Shares will provide 

investors with additional risk 

management tools. The Commission 

further believes that the proposed 

amendment to the Exchange’s listing 

criteria for options on Exchange Traded 

Fund Shares will ensure that the 

Exchange will be able to list options on 

the Funds of the ProShares Trust and 

Rydex ETF Trust as well as other 

Multiple Fund Shares or Inverse Fund 

Shares that may be introduced in the 

future, thereby affording investors 

greater investment choices. 

The Commission finds good cause for 

approving this proposal before the 30th 

day after the publication of notice 

thereof in the Federal Register. The 

Commission notes that it has previously 

approved substantially similar 

proposals by other national securities 

exchanges.16 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 options on Multiple Fund 

and Inverse Fund Shares on the 

Exchange. Accelerating approval of this 

proposed rule change would allow the 

options on Multiple Fund and Inverse 

Fund Shares to be listed on the 

Exchange without undue delay and 

continuously traded without 

interruption, to the benefit of investors. 

V. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–NYSEArca–

2008–03) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–1986 Filed 2–4–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57221; File No. SR–

NYSEArca-2008–11] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Fees 

Applicable to Certain Exchange Traded 

Funds and Rebates for Tape B 

Securities 

January 29, 2008. 

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

Securities Exchange Act of 1934 (‘‘Act’’) 

and Rule 19b-4 thereunder,2 notice is 

hereby given that on January 16, 2008, 

NYSE Arca, Inc. (‘‘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 substantially prepared by the 

Exchange. The Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act,3 and Rule 

19b-4(f)(2) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange, through its whollyowned subsidiary NYSE Arca Equities, 

proposes to amend the section of its 

Schedule of Fees and Charges for 


rmajette on PROD1PC64 with NOTICES