53914 Federal Register / Vol. 73, No. 181 / Wednesday, September 17, 2008 / Notices 

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. 

3See Securities Exchange Act Release No. 58278 

(July 31, 2008), 73 FR 46124 (‘‘Notice’’). 

4As part of this rule change, NYSE also proposes 

deleting the definition of ‘‘meaningful amount’’ in 

Rule 104(e)(ii). 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

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

7See Notice supra note 3, at 46125. 

proposal may become operative, and the 

suspended rule may be reinstated, 

immediately upon filing. The Exchange 

believes that, while a suspension of 

Rule 123D(3) for Fannie Mae and 

Freddie Mac securities was warranted 

by the Treasury Department’s actions, 

the immediate benefits of suspending 

that rule have diminished, and that 

therefore it is consistent with the 

Exchange Act that the rule be reinstated 

as expeditiously as possible, since the 

reinstated rule would prevent the 

Exchange from executing transactions in 

Fannie Mae and Freddie Mac securities 

at prices below $1.00 that may violate 

Regulation NMS. 

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.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–2008–83 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–2008–83. 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– 

2008–83 and should be submitted on or 

before October 8, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21704 Filed 9–16–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58517; File No. SR–NYSE– 

2008–61] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving Proposed Rule Change 

Amending NYSE Rule 104(e) (Dealings 

by Specialists) To Modify the 

Conditions Governing the Specialists’ 

Use of the Price Improvement Trading 

Message Pursuant to NYSE Rule 

104(b)(i)(H) 

September 11, 2008. 

On July 25, 2008, the New York Stock 

Exchange LLC (‘‘NYSE’’ 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 proposed rule 

change to modify the rule governing the 

specialists’ use of the price 

improvement trading message. The 

proposed rule change was published for 

comment in the Federal Register on 

August 7, 2008.3 The Commission 

received no comments regarding the 

proposal. This order approves the 

proposed rule change. 

Pursuant to NYSE Rule 104(b), 

specialists may use algorithms to 

generate quoting and trading messages. 

Such trading messages may provide 

price improvement to an order, subject 

to the conditions set forth in Rule 

104(e). In order to provide price 

improvement to a marketable incoming 

order, Rule 104(e)(i) requires that the 

specialist must be represented in the bid 

or offer in a ‘‘meaningful amount.’’ Rule 

104(e)(ii) defines ‘‘meaningful amount’’ 

as at least ten round-lots for the 100 

most active securities on the Exchange, 

based on average daily volume, and at 

least five round-lots for all other 

securities on the Exchange. NYSE 

proposes to delete the requirement in 

Rule 104(e)(i) that specialists must be 

represented in a bid or offer in a 

meaningful amount to provide price 

improvement to the incoming order.4

The Commission has carefully 

reviewed the proposed rule change and 

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,5 and, in particular, 

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

requires, among other things, that NYSE 

rules be designed 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. 

As NYSE stated in its proposal, 

average quote sizes on the Exchange 

have decreased in recent years.7

Because of this, the Exchange believes 

the meaningful amount requirement for 

price improvement is a deterrent to 

specialists’ participation in price 

improvement. The Commission believes 

that deletion of the meaningful amount 

requirement should encourage greater 

participation by specialists in the 

Exchange’s price improvement 

mechanism. At the same time, the 

Commission must carefully review 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 73, No. 181 / Wednesday, September 17, 2008 / Notices 53915 

8See Securities Exchange Act Release No. 58092 

(July 3, 2008), 73 FR 40144 (July 11, 2008) at 40148. 

9The Commission notes that, through a separate 

proposed rule change, the Exchange has proposed 

to eliminate all of the provisions relating to the 

specialists’ price improvement mechanism under 

NYSE Rule 104(e) by October 15, 2008. See 

Securities Exchange Act Release No. 58184 (July 17, 

2008), 73 FR 42853 (July 23, 2008) (SR–NYSE– 

2008–46). 

10 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. 58395 

(August 20, 2008), 73 FR 50382. 

4A Managed Fund Share is a security that 

represents an interest in an investment company 

registered under the Investment Company Act of 

1940 (15 U.S.C. 80a) (‘‘1940 Act’’) organized as an 

open-end management investment company or 

similar entity that invests in a portfolio of securities 

selected by its investment adviser consistent with 

its investment objectives and policies. In contrast, 

an open-end investment company that issues 

Investment Company Units, listed and traded on 

the Exchange under NYSE Arca Equities Rule 

5.2(j)(3), seeks to provide investment results that 

correspond generally to the price and yield 

performance of a specific foreign or domestic stock 

index, fixed income securities index, or a 

combination thereof. 

5The Trust is registered under the 1940 Act. On 

June 26, 2008, the Trust filed with the Commission 

a Registration Statement for the Fund on Form N– 

1A under the Securities Act of 1933 (15 U.S.C. 77a) 

and under the 1940 Act relating to the Fund (File 

Nos. 333–147622 and 811–22148) (‘‘Registration 

Statement’’). The Exchange states that the 

description of the operation of the Trust herein is 

based on the Registration Statement. 

6 17 CFR 240.10A–3. 

7 15 U.S.C. 80b–1. The Exchange represents that 

the Adviser and its related personnel are subject to 

Rule 204A–1 under the Advisers Act (17 CFR 

275.204A–1). This rule specifically requires the 

adoption of a code of ethics by an investment 

adviser to include, at a minimum: (1) A standard 

or standards of business conduct that reflect the 

fiduciary obligations of such investment adviser 

and its supervised persons; (2) provisions requiring 

its supervised persons to comply with applicable 

federal securities laws; (3) provisions that require 

all access persons to report, and such investment 

adviser to review, their personal securities 

transactions and holdings periodically as 

specifically set forth in Rule 204A–1; (4) provisions 

requiring supervised persons to report any 

violations of the code of ethics promptly to the 

chief compliance officer (‘‘CCO’’) or, provided the 

CCO also receives reports of all violations, to other 

persons designated in the code of ethics; and (5) 

provisions requiring the investment adviser to 

provide each of its supervised persons with a copy 

of the code of ethics and any amendments, and 

requiring its supervised persons to provide to such 

investment adviser written acknowledgement of 

their receipt of the code and any amendments. In 

addition, Rule 206(4)–7 under the Advisers Act 

makes it unlawful for an investment adviser to 

provide investment advice to clients unless such 

investment adviser has (i) adopted and 

implemented written policies and procedures 

reasonably designed to prevent violation, by the 

investment adviser and its supervised persons, of 

the Advisers Act and the rules adopted thereunder, 

(ii) reviewed no less frequently than annually the 

adequacy of the policies and procedures established 

pursuant to (i) above and the effectiveness of their 

implementation, and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under (i) above. See 17 CFR 275.206(4)–7. 

8The Exchange states that the Adviser is affiliated 

with the Distributor, a broker-dealer. As required by 

Commentary .07 to NYSE Arca Equities Rule 8.600, 

the Exchange represents that the Adviser has 

implemented a ‘‘fire wall’’ with respect to such 

broker-dealer regarding access to information 

concerning the composition and/or changes to the 

Fund’s portfolio. Commentary .07 to NYSE Arca 

Equities Rule 8.600 also requires personnel, who 

make decisions on the portfolio composition of the 

Fund, must be subject to procedures designed to 

prevent the use and dissemination of material 

nonpublic information regarding the applicable 

Fund’s portfolio. 

9A company is considered to be principally 

engaged in the U.S. real estate industry if: (i) It 

derives 50% of its revenues or profits from the 

ownership, leasing, construction, financing, or sale 

of U.S. real estate; or (ii) it has at least 50% of the 

value of its assets invested in U.S. real estate. 

trading rule proposals that seek to offer 

special advantages to market 

participants. Although an exchange may 

reward its participants for the benefits 

they provide to the exchange’s market, 

such rewards must not be 

disproportionate to the services 

provided.8 In considering the totality of 

the benefits accorded to and obligations 

imposed upon specialists on the 

Exchange, the Commission believes that 

it is reasonable for NYSE to delete the 

‘‘meaningful amount’’ requirement of 

Rule 104(e).9

It is therefore ordered, pursuant to 

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

proposed rule change (SR–NYSE–2008– 

61) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21707 Filed 9–16–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58512; File No. SR– 

NYSEArca–2008–85] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Accelerated 

Approval of a Proposed Rule Change 

Relating to the Listing and Trading of 

Shares of the PowerShares Active U.S. 

Real Estate Fund 

September 11, 2008. 

On August 11, 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’’) 

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

Securities Exchange Act of 1934 

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

proposed rule change to list and trade 

shares (‘‘Shares’’) of the PowerShares 

Active U.S. Real Estate Fund (‘‘Fund’’) 

under NYSE Arca Equities Rule 8.600. 

The proposed rule change was 

published in the Federal Register on 

August 26, 2008 for a 15-day comment 

period.3 The Commission received no 

comments on the proposal. This order 

grants approval to the proposed rule 

change on an accelerated basis. 

I. Description of the Proposal 

The Exchange proposes to list and 

trade the Shares pursuant to NYSE Arca 

Equities Rule 8.600, which governs the 

listing of Managed Fund Shares.4 The 

Exchange states that the Shares will 

conform to the initial and continued 

listing criteria under that rule. 

The Shares will be offered by 

PowerShares Actively Managed 

Exchange-Traded Fund Trust (‘‘Trust’’),5

a business trust organized under the 

laws of the State of Delaware and 

registered with the Commission as an 

open-end management investment 

company. The Exchange states that the 

Fund will not purchase or sell securities 

in markets outside the United States. 

The Exchange represents that, for initial 

and/or continued listing, the Fund will 

be in compliance with Rule 10A–3 

under the Act,6 as provided by NYSE 

Arca Equities Rule 5.3. 

A. Description of the Fund 

Invesco PowerShares Capital 

Management LLC (‘‘Adviser’’) is the 

investment adviser for the Fund and is 

registered as an ‘‘investment adviser’’ 

under the Investment Advisers Act of 

1940 (‘‘Advisers Act’’).7 Invesco 

Institutional (N.A.), Inc. is the Fund’s 

primary investment sub-adviser and is 

also registered as an ‘‘investment 

adviser’’ under the Advisers Act. 

Invesco Aim Distributors, Inc. (the 

‘‘Distributor’’) serves as the principal 

underwriter and distributor for the 

Fund.8

The Exchange states that, according to 

the Registration Statement, the Fund has 

an investment objective of high total 

return through growth of capital and 

current income. It seeks to achieve its 

investment objective by investing, under 

normal market conditions, at least 80% 

of its assets in securities of companies 

that are principally engaged in the U.S. 

real estate industry.9 Specifically, the 

Fund plans to invest principally in 

equity real estate investment trusts 

(‘‘REITs’’). Equity REITs pool investors’’ 

funds for investments primarily in real 

estate properties or real estate-related 

loans (e.g., mortgages). The Fund may 

also invest in real estate operating 

companies (‘‘REOCs’’), as well as 

securities of other companies 


pwalker on PROD1PC71 with NOTICES