51676 Federal Register / Vol. 73, No. 172 / Thursday, September 4, 2008 / Notices 

20 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). 

21 15 U.S.C. 78f(b)(5). 

22 15 U.S.C. 78s(b)(1). 

23 17 CFR 240.19b–4. 

24 17 CFR 240.19b–4(e). 

25 17 CFR 240.19b–4(c)(1). 

26See Securities Exchange Act Release No. 57660 

(April 14, 2008), 73 FR 21391 (April 21, 2008) (SR–

Amex–2007–131). The Commission notes that it 

received no comments on the Amex’s proposal. 

27 15 U.S.C. 78s(b)(2). 

28 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)(6). 

5NYSE Rule 54 provides that only members are 

permitted to ‘‘make or accept bids or offers, 

consummate transactions, or otherwise transact 

business on the Floor for any security admitted to 

dealings on the [Exchange].* * * ’’ See also NYSE 

Rule 2. 

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–NASDAQ–2008–071 and 

should be submitted on or before 

September 25, 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.20 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,21 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. 

Pursuant to Section 19(b) of the Act 22

and Rule 19b–4 thereunder,23 the listing 

and trading of a new derivative 

securities product is a proposed rule 

change that must be filed with and 

approved by the Commission. Rule 19b–

4(e) under the Act 24 further provides 

that the listing and trading of a new 

derivative securities product by an 

exchange will not be deemed a 

proposed rule change pursuant to Rule 

19b–4(c)(1) under the Act 25 if the 

Commission has approved, pursuant to 

Section 19(b) of the Act, the exchange’s 

trading rules, procedures, and listing 

standards for the product class that 

would include the new derivative 

securities product, and the exchange has 

a surveillance program for the product 

class. 

The Commission believes that the 

Exchange’s adoption of listing and 

trading standards for Index Fund Shares 

that meet the requirements of Nasdaq 

Rule 4420(j) should fulfill the intended 

objective of Rule 19b–4(e) by allowing 

such Index Fund Shares to commence 

trading on the Exchange without the 

need for individualized Commission 

approval. Accordingly, the proposed 

rule should allow the Exchange to bring 

these securities to market without delay, 

thereby reducing the burdens on issuers 

and other market participants while 

promoting competition. 

The Commission finds that the 

Exchange’s proposal contains adequate 

rules and procedures to govern the 

trading and listing pursuant to Rule 

19b–4(e) of Inverse Fund Shares and 

Multiple Fund Shares listed pursuant to 

Rule 19b–4(e) on the Exchange. Among 

other things, the proposal would require 

daily public Web site disclosure of a 

fund’s portfolio holdings and 

dissemination of its NAV to all market 

participants at the same time, or else the 

Exchange would be obligated to halt 

trading in the fund’s shares. In addition, 

Fund Shares listed and/or traded under 

the proposed ‘‘generic’’ standards would 

be subject to existing Nasdaq rules that 

govern the continued listing and trading 

of Index Fund Shares. 

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 recently 

approved a similar proposal of another 

exchange,26 and Nasdaq’s proposal does 

not raise any novel regulatory issues. 

Accordingly, the Commission believes 

that accelerating approval of this 

proposal is appropriate and will enable 

the Exchange to amend its rules to 

reflect the standards for listing and 

trading Inverse and Multiple Fund 

Shares, thereby conforming Nasdaq’s 

rules to those of other exchanges 

without delay. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,27 that the 

proposed rule change (SR–NASDAQ–

2008–071) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–20517 Filed 9–3–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58429; File No. SR–NYSE–

2008–71] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending 

NYSE Rule 123B (Exchange Automated 

Order Routing System) To Allow a 

Member Organization To Provide Other 

Market Participants With Access to the 

Exchange on an Agency Basis 

August 27, 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 August 

18, 2008, New York Stock Exchange 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by NYSE. NYSE filed the 

proposed rule change as a ‘‘noncontroversial’’ proposed rule change 

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

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders it 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 

NYSE proposes to amend NYSE Rule 

123B to set forth the requirements that 

would allow a member organization to 

provide other market participants with 

access to the Exchange on an agency 

basis for the entry and execution of 

orders on the Exchange.5 The text of the 

proposed rule change is available at 

NYSE, the Commission’s Public 


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6See NYSE MatchPointSM (NYSE Rule 1500) and 

NYSE BondsSM (NYSE Rule 86). The provisions of 

this proposed rule will not apply to NYSE Rules 

1500 and 86. 

7See NYSE Arca Rules 7.29 (Access) and 7.30 

(Authorized Traders). 

8See Securities Exchange Act Release No. 55550 

(March 28, 2007), 72 FR 16389 (April 4, 2007) (SR–

NASDAQ–2007–010) (amending NASDAQ Rule 

4611(d) to conform its requirements to match NYSE 

Arca Rules 7.29 and 7.30). 

9 In adopting NYSE Arca’s sponsored access rule, 

NASDAQ stated its intent was, ‘‘to match the 

regulatory requirements imposed by other 

exchanges and, thereby, to promote uniform 

regulation of sponsored access relationships.’’ See 

Securities Exchange Act Release No. 55550 (March 

28, 2007) at 2, 72 FR 16389, 16390 (April 2007) 

(SR–NASDAQ–2007–010). 

10Commentary .30, Section (c)(3) of proposed 

NYSE Rule 123B requires that the Sponsoring 

Member Organization provide the Exchange with a 

notice of consent acknowledging its responsibility 

for the orders, execution, and conduct of the 

Sponsored Participant at issue (alteration to original 

citation that referenced ‘‘Section (b)(3) of proposed 

NYSE Rule 123B’’). 

11See Commentary .30, Sections (c)(2)(D) and (d) 

of proposed NYSE Rule 123B (alteration to original 

citation that referenced ‘‘proposed NYSE Rule 123B 

sections (b)(2)(D) and (d)’’). 

12See Securities Exchange Act Release No. 44983 

(October 25, 2001), 66 FR 55225 (November 1, 2001) 

(SR–PCX–00–25) (alteration to original citation that 

referenced ‘‘53615 (April 7, 2006), 71 FR 19226 

(April 13, 2006) (SR–PCX–2006–24) (adopting 

NYSE Arca Equities Rules 7.29 and 7.30)’’). 

13 15 U.S.C. 78f(b)(5). 

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, 

NYSE included statements concerning 

the purpose of, and basis for, the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. NYSE 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 proposes to amend NYSE Rule 

123B to set forth the requirements for a 

member or member organization 

(‘‘Sponsoring Member Organization’’) to 

provide access (‘‘sponsored access’’) to 

a non-member firm or customer 

(‘‘Sponsored Participant’’) for the entry 

and execution of orders on the 

Exchange. The Exchange seeks the 

proposed rule amendment to provide a 

uniform rule for sponsored access to the 

Exchange as described below. 

Background 

Currently, there are sponsored access 

provisions included in certain NYSE 

rules that govern specific Exchange 

products or facilities; 6 however, the 

Exchange does not have a general 

sponsored access rule. The Exchange 

therefore proposes to adopt the 

sponsored access rule of its affiliate 

exchange, NYSE Arca, Inc. (‘‘NYSE 

Arca’’).7 Other exchanges, namely The 

NASDAQ Stock Market LLC,8 have 

similarly adopted identical sponsored 

access provisions.9

Proposed NYSE Rule 123B Sponsored 

Access 

According to the proposed rule, 

Sponsored Participants must enter into 

and maintain customer agreements with 

one or more Sponsoring Member 

Organizations establishing proper 

relationship(s) and account(s) through 

which the Sponsored Participant may 

trade on the Exchange. As more fully 

described below, the Sponsoring 

Member Organization and the 

Sponsored Participant must agree in 

writing to specific sponsorship 

provisions (‘‘Sponsorship Access 

Agreement’’) in order for the Sponsored 

Participant to obtain and maintain 

authorized access to the Exchange.10

The first sponsorship provision of the 

proposed rule requires the Sponsoring 

Member Organization to enter into and 

maintain an agreement with the 

Exchange, designating the Sponsored 

Participant by name in such agreement. 

The Sponsoring Member Organization 

also agrees to be responsible for the 

conduct of the Sponsored Participant 

and/or any person acting on its behalf 

or in the name of such Sponsored 

Participant. Further, all orders entered 

by the Sponsored Participant and/or any 

person acting on its behalf or in the 

name of such Sponsored Participant are 

binding on the Sponsoring Member 

Organization. Both the Sponsored 

Participant and the Sponsoring Member 

Organization agree to comply with the 

rules and procedures of the Exchange. 

In order to ensure compliance with 

the Sponsorship Access Agreement, it is 

the responsibility of the Sponsored 

Participant to implement such internal 

controls as may be necessary to prevent 

unauthorized the use of and access to 

the Exchange facilities. Sponsored 

Participants will be required to establish 

adequate procedures and controls to 

monitor use and access to the Exchange 

by their employees, agents, and 

customers. The Sponsored Participant 

also agrees to pay to the Sponsoring 

Member Organization, the Exchange, or 

any third party, all amounts (including 

but not limited to exchange and 

regulatory fees) related to the Sponsored 

Participant’s access to and the use of 

Exchange facilities when due. 

The proposed rule contemplates that 

the Sponsored Participant may permit 

one or more person(s) to submit orders 

to the Exchange on its behalf 

(‘‘Authorized Trader’’).11 The 

Sponsored Participant is required to 

maintain, keep current and provide, 

upon request, a list of Authorized 

Traders to the Sponsoring Member 

Organization. The Sponsoring Member 

Organization is required to maintain a 

current list of the same to be made 

available to the Exchange upon request. 

Although the Sponsored Participant is 

required to familiarize its Authorized 

Traders with the obligations of a 

Sponsored Participant under the 

proposed rule and ensure that the 

Authorized Trader receives appropriate 

training prior to any use or access to the 

Exchange, it is the Sponsoring Member 

Organization that bears the ultimate 

responsibility regarding the conduct and 

trading activity of Authorized Traders. 

Specifically, the Sponsoring Member 

Organization must have reasonable 

procedures to: (a) Ensure compliance 

with Exchange rules and procedures; 

and (b) maintain, as appropriate, the 

physical security of any equipment on 

its premises for accessing the Exchange 

to prevent against improper access or 

use (including unauthorized entry of 

information into Exchange systems). 

Pursuant to the proposed rule, at the 

direction of the Exchange, the 

Sponsoring Member Organization must 

suspend or withdraw the status of 

Authorized Trader from any person 

whom the Exchange has determined has 

caused the Sponsoring Member 

Organization to fail to comply with 

Exchange Rules. 

Insofar as the amendments proposed 

herein have been determined by the 

Commission to be consistent with the 

protection of investors and the public 

interest; the Exchange believes that the 

proposed amendments to NYSE Rule 

123B to codify the requirements for 

sponsored access on the Exchange are 

necessary to align NYSE rules with what 

has become the industry standard.12

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with and 

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

of the Act,13 in that it is designed to 

prevent fraudulent and manipulative 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 


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51678 Federal Register / Vol. 73, No. 172 / Thursday, September 4, 2008 / Notices 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change at least five business 

days prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. NYSE has complied with this 

requirement. 

17 Id. 

18For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

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

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

mechanisms of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

B.Self-Regulatory Organization’s 

Statement on Burden on Competition 

NYSE does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing 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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 14 and Rule 19b–

4(f)(6) thereunder.15

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.16 However, Rule 19b–

4(f)(6)(iii) 17 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 requested that the 

Commission waive the 30-day operative 

delay so that the proposal may become 

operative immediately upon filing. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. The Commission hereby 

grants the Exchange’s request and 

designates the proposal as operative 

upon filing.18

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

No. SR–NYSE–2008–71 on the subject 

line. 

Paper Comments 

Send paper comments in triplicate to 

Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–71. 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–2008–71 and 

should be submitted on or before 

September 25, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–20465 Filed 9–3–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58430; File No. SR–NYSE–

2008–76] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

New York Stock Exchange LLC 

Amending NYSE Rule 2B in Order To 

Establish Procedures Designed To 

Manage Potential Informational 

Advantages Resulting From the 

Affiliation Between the Exchange and 

Archipelago Securities L.L.C. 

August 27, 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 August 

20, 2008, New York Stock Exchange 

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

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II and III below, which Items 

have been prepared by the selfregulatory organization. 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 

Exchange Rule 2B in order to establish 

procedures designed to manage 

potential informational advantages 

resulting from the affiliation between 

the Exchange and Archipelago 

Securities L.L.C., an NYSE affiliated 

member. 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 

self-regulatory organization included 

statements concerning the purpose of, 


sroberts on PROD1PC77 with NOTICES