53304 Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Notices 

7 15 U.S.C. 78f(b)(5). 

8 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). 

9See supra note 5. 

10The Commission also notes that nothing in this 

proposal affects a company’s obligations to disclose 

material news in a timely fashion. See Section 

202.05 of the Manual. 

11 15 U.S.C. 78s(b)(2). 

12 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 C.F.R. 40.19b–4. 

4This rule proposal affects the following 

securities: FRE Voting common stock; FRE 19Z Zero 

Coupon Subordinated Capital Debentures, due 

November 29, 2019; FRE PR B Variable Rate, NonCumulative Preferred Stock; FRE PR F 5% NonCumulative Preferred Stock; FRE PR G Variable 

Rate, Non-Cumulative Preferred Stock; FRE PR H 

5.1% Non-Cumulative Preferred Stock; FRE PR K 

5.79% Non-Cumulative Preferred Stock; FRE PR L 

Variable Rate, Non-Cumulative Preferred Stock; 

FRE PR M Variable Rate, Non-Cumulative Preferred 

Stock; FRE PR Q Variable Rate, Non-Cumulative 

Preferred Stock; FRE PR P 6% Non-Cumulative 

Preferred Stock; FRE PR N Variable Rate, NonCumulative Preferred Stock; FRE PR O 5.81% NonCumulative Preferred Stock; FRE PR R 5.7% NonCumulative Preferred Stock; FRE PR S Variable 

Rate, Non-Cumulative Perpetual Preferred Stock; 

FRE PR T 6.42% Non-Cumulative Perpetual 

Preferred Stock; FRE PR U 5.9% Non-Cumulative 

Perpetual Preferred Stock; FRE PR V 5.57% NonCumulative Perpetual Preferred Stock; FRE PR W 

5.66% Non-Cumulative Perpetual Preferred Stock; 

FRE PR X 6.02% Non-Cumulative Perpetual 

Preferred Stock; FRE PR Y 6.55% Non-Cumulative 

Perpetual Preferred Stock; FRE PR Z Fixed-toFloating Rate Non-Cumulative Perpetual Preferred 

Stock, $1.00 Par Value; FNM Common stock; FNM 

19Z Zero Coupon Subordinated Capital Debentures 

due October 9, 2019; FNM 14Z Zero Coupon 

Debentures due July 5, 2014; FNA 8.75% NonCumulative Mandatory Convertible Prefered Stock, 

Series 2008–1; FNM PR H 5.81% Non-Cumulative 

Preferred Stock, Series H; FNM PR L 5.125% NonCumulative Preferred Stock, Series L; FNM PR M 

4.75% Non-Cumulative Preferred Stock, Series M; 

FNM PR N 5.50% Non-Cumulative Preferred Stock, 

Series N, without par value; FNM PR G Variable 

Rate, Non-Cumulative Preferred Stock, Series G; 

FNM PR P Variable Rate, Non-Cumulative Preferred 

Stock, Series P; FNM PR Q 6.75% Non-Cumulative 

Preferred Stock, Series Q; FNM PR R 7.625% NonCumulative Preferred Stock, Series R; FNM PR S 

Fixed-to-Floating Rate Non-Cumulative Preferred 

Stock, Series S; FNM PR T 8.25% Non-Cumulative 

Preferred Stock, Series T; FNM PR F Variable Rate, 

Non-Cumulative Preferred Stock, Series F; FNM PR 

I 5.375% Non-Cumulative Preferred Stock, Series I. 

See email from Dan Labovitz, Vice President, Office 

of the General Counsel, NYSE Euronext, to Nathan 

Saunders, Special Counsel, Commission, dated 

September 8, 2008 (‘‘September 8 Email’’). 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange and, in particular, 

with Section 6(b)(5) of the Act,7 which 

requires, among other things, that the 

rules of a national securities exchange 

be designed 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.8

The Commission believes that it is 

appropriate for the NYSE to align the 

timing requirement in Section 802.02 of 

the Manual for issuance of a press 

release when a company has received 

notice that it has fallen below the 

Exchange’s continued listing standards 

with the Commission’s timing 

requirement for providing notification 

of such event on the Form 8–K. The 

Commission believes that this change 

will ensure that a company issues a 

press release no later than the date it is 

currently required to file a Form 8–K 

providing notice of such event. The 

Commission notes that the amended 

rule provides that the company must 

issue a press release within the time 

period allotted by SEC rules, but in any 

event, no longer than four business days 

after notification. The Commission 

believes that reducing the time period 

from 45 days to 4 days within which 

companies must issue a press release is 

consistent with the protection of 

investors and the public interest 

because it will provide investors with 

earlier press release notification that the 

company has fallen out of compliance 

with Exchange listing requirements and 

avoids any confusion by conforming the 

time periods in the NYSE rules with 

current Commission requirements. 

Further, the Commission believes that 

it is appropriate for the NYSE to reduce 

from 90 days to 30 days the period 

within which non-U.S. companies must 

issue a press release regarding a 

notification by the Exchange of 

noncompliance with the Exchange’s 

listing standards. The Commission 

believes that this change should still 

allow companies sufficient time to make 

the required disclosure, while at the 

same time providing investors with a 

more timely notification of important 

news that the company does not satisfy 

a rule or standard for continued listing 

on the Exchange. The Commission notes 

that non-U.S. companies that do not 

qualify as foreign private issuers would 

have to comply with the amended 

disclosure for domestic companies 

pursuant to Section 802.02.9

The Commission also believes that it 

is appropriate for the Exchange to issue 

a press release itself in the event that a 

company has not acted within the new 

time periods required by this proposed 

rule change. This will ensure that 

investors are provided notification of a 

company’s non-compliance in a timely 

fashion, regardless of a company’s 

failure to meet the timing requirements 

of these rules. The Commission notes 

that the existing rule being amended 

herein did allow the Exchange to make 

such disclosure under the longer time 

periods. This proposal will permit a 

continuation of this authority, but with 

the updated time periods.10

For the reasons set forth above, the 

Commission finds that the proposed 

rule change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–NYSE–2008– 

59) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21332 Filed 9–12–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58488; File No. SR–NYSE– 

2008–81] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Rule Proposed by New York Stock 

Exchange LLC To Suspend the 

Operation of NYSE Rule 123D With 

Respect to Trading in the Securities of 

Fannie Mae and Freddie Mac 

September 8, 2008. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

September 8, 2008, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed the original filing 

with the Securities and Exchange 

Commission (the ‘‘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 

New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) is 

proposing to suspend the operation of 

NYSE Rule 123D(3) with respect to 

trading in all securities of Fannie Mae 

and Freddie Mac.4 The suspension 

would operate through the close of 

primary trading on the NYSE on 

September 15, 2008. If additional time 

is needed, the Exchange will submit 

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Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Notices 53305 

5 17 CFR 240.19b–4. 

6 15 U.S.C.78s(b)(1). 

7See September 8 Email, supra note 4. 

8See Securities Exchange Act Release No. 51808 

(June 9, 2005), 17 CFR Parts 200, 201, 230, 240, 242, 

249 and 270. 

9See 17 C.F.R. § 242.611. 

10See Securities Exchange Act Release No. 55160 

(January 24, 2007), 72 FR 4202 (January 30, 2007) 

(S7–10–04). 

11See 17 C.F.R. § 242.612. Rule 612 originally 

was to become effective on August 29, 2005, but the 

date was later extended to January 29, 2006. See 

Securities Exchange Act Release No. 52196 (Aug. 2, 

2005), 70 FR 45529 (Aug. 8, 2005). 

12Order Granting National Securities Exchanges a 

Limited Exemption from Rule 612 of Regulation 

NMS under the Securities Exchange Act of 1934 to 

Permit Acceptance by Exchanges of Certain SubPenny Orders. See Securities and Exchange 

Commission Release No. 54714 (November 6, 2006). 

13See Securities and Exchange Commission 

Release No. 34–55398; File No. SR–NYSE–2007–25 

(Mar. 5, 2007). 

14See Securities and Exchange Commission 

Release No. 34–55537; File No. SR–NYSE–2007–30 

(Mar. 27, 2007). 

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

16 15 U.S.C. 78f(b)(5). 

another rule filing to the Commission 

pursuant to section 19(b)(1) of the 

Securities Exchange Act 5 and Rule 19b– 

4 6 thereunder.7

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. 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 

Regulation NMS, adopted by the 

Securities and Exchange Commission 

(‘‘SEC’’) in April 2005,8 provides that 

each trading center intending to qualify 

for trade-through protection under 

Regulation NMS Rule 611 9 is required 

to have a Regulation NMS-compliant 

trading system fully operational by 

March 5, 2007 (the ‘‘Trading Phase 

Date’’).10

For stocks priced below $1.00 per 

share, Regulation NMS Rule 612 11

permits markets to accept bids, offers, 

orders and indications of interest in 

increments smaller than a $0.01, but not 

less than $0.0001, and to quote and 

trade such stocks in sub-pennies. 

Markets may choose not to accept such 

bids, offers, orders or indications of 

interest and the NYSE has done so, 

maintaining a minimum trading and 

quoting variation of $0.01 for all 

securities trading below $100,000. See 

NYSE Rule 62. 

The SEC’s interpretation of Rule 612 

requires a market that routes an order to 

another market in compliance with Rule 

611 and receives a sub-penny execution, 

to accept the sub-penny execution, 

report that execution to the customer, 

and compare, clear and settle that trade. 

The SEC, however, provided a limited 

exemption to Rule 611’s proscription 

against trade-throughs to protected 

quotes that include a sub-penny 

component to such quotes that are 

better-priced by a minimum of $0.01.12

In March, 2007, the Exchange 

amended Rule 123D to provide for a 

‘‘Sub-penny trading’’ condition because 

the Exchange’s trading systems did not 

then accommodate sub-penny 

executions on orders routed to betterpriced protected quotations, nor could it 

recognize a quote disseminated by 

another market center if such quote had 

a sub-penny component and, therefore, 

could have inadvertently traded through 

better protected quotations. The 

amended rule automatically halts 

trading on the Exchange in a security 

whose price was about to fall below 

$1.00, without delisting the security, so 

that the security could continue to trade 

on other markets that deal in bids, 

offers, orders or indications of interest 

in sub-penny prices, until the price of 

the security had recovered sufficiently 

to permit the Exchange to resume 

trading in minimum increments of no 

less than one penny or the issuer is 

delisted for failing to correct the price 

condition within the time provided 

under NYSE rules.13 A subsequent 

amendment established that any orders 

received by the NYSE in a security 

subject to a ‘‘Sub-penny trading’’ 

condition would be routed to NYSE 

Arca, Inc. and handled in accordance 

with the rules governing that market.14

Federal Government Takeover of Fannie 

Mae and Freddie Mac 

On September 7, 2008, Secretary of 

the Treasury Henry Paulson announced 

that the federal government would force 

Fannie Mae and Freddie Mac into a 

conservatorship that will result in the 

companies issuing warrants to the 

federal government representing 

approximately 80% ownership of the 

entities. Details of the plan are available 

at the Department of the Treasury’s Web 

site, at http://www.treas.gov/press/ 

releases/reports/ 

pspa_factsheet_090708%20hp1128.pdf. 

The NYSE anticipates that the 

government’s action will have a 

significantly disruptive effect on the 

trading in the common stock of both 

Fannie Mae and Freddie Mac, which 

may cause those shares to trade below 

$1.00 per share. Ordinarily, such an 

action would result in the NYSE 

invoking its sub-penny trading halt, 

which would halt trading on the 

primary listing venue of the securities. 

But, given the scope of the government’s 

action, the NYSE believes that the 

market will substantially benefit from 

having the most available liquidity and 

the greatest number of venues in which 

investors can trade the securities of 

Fannie Mae and Freddie Mac, and 

would further benefit from the efforts of 

the NYSE specialists in those securities 

to stabilize the markets as public 

investors react to the news. The NYSE 

further believes that these benefits 

outweigh the potential harms that NYSE 

Rule 123D was intended to address, and 

that therefore, a temporary suspension 

of that rule for this limited purpose 

would serve the interests of customers 

and the investing public, 

notwithstanding the possibility that 

some investors may receive an inferior 

execution due to sub-penny quoting. 

The NYSE recognizes that the 

suspension of Rule 123D does not 

thereby exempt the Exchange from Reg 

NMS Rules 611 and 612, but notes that 

the inferior executions that may result 

would only amount to fractions of a 

penny per share, and therefore the 

potential harm, even in the case of large 

orders, would be minimal. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 15 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and furthers the 

objectives of Section 6(b)(5) 16 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 impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

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53306 Federal Register / Vol. 73, No. 179 / Monday, September 15, 2008 / Notices 

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

18 17 CFR 240.19b–4(f)(6). 

19 Id. 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 satisfied this requirement. 

20 Id. 

21For 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). 

22 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(1). 

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 

The Exchange has designated the 

proposed rule change as one that: (1) 

Does not significantly affect the 

protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) does not become operative for 30 

days from the date of filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest. Therefore, the foregoing rule 

change has become effective pursuant to 

section 19(b)(3)(A) of the Act 17 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.18

A proposed rule change filed under 

19b–4(f)(6) normally does not become 

operative until 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 

requested that the Commission waive 

the 30-day operative delay so that the 

proposal may become operative 

immediately upon filing. The Exchange 

believes that the proposed relief is 

limited in nature, and that the benefits 

of the proposed relief outweigh the 

potential harms. Moreover, given the 

rapidity of recent developments with 

respect to Fannie Mae and Freddie Mac, 

the Exchange believes that immediate 

effectiveness is required in order to 

avoid significant disruption to the 

market. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

Commission therefore grants the 

Exchange’s request and designates the 

proposal to be operative upon filing.21

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–2008–81 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–2008–81. 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, 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– 

2008–81 and should be submitted on or 

before October 6, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21333 Filed 9–12–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58469; File No. SR– 

NYSEArca–2008–92] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to Listing of 

MacroShares Major Metro Housing 

Trusts 

September 5, 2008. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 

25, 2008, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory 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 

Pursuant to the provisions of section 

19(b)(1) of the Act,4 the Exchange, 

through its wholly-owned subsidiary 

NYSE Arca Equities, Inc. (‘‘NYSE Arca 

Equities’’ or the ‘‘Corporation’’) 

proposes to list and trade under NYSE 

Arca Equities Rule 8.400 (‘‘Paired Trust 

Shares’’) the shares of the MacroShares 

Major Metro Housing Up Trust (‘‘Up 

Trust’’) and the MacroShares Major 

Metro Housing Down Trust (‘‘Down 

Trust’’) (collectively, the ‘‘Trusts’’). The 

shares of the Up Trust are referred to as 

the Up MacroShares, and the shares of 

the Down Trust are referred to as the 

Down MacroShares (collectively, the 

‘‘Shares’’). 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 

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