Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57705 

least one year following the date of the 

SAI), if any, that are expected to prevent 

the delivery of redemption proceeds in 

seven calendar days, and the maximum 

number of days needed to deliver the 

proceeds for the relevant International 

Fund. 

Sections 17(a)(1) and (2) of the Act 

9. Sections 17(a)(1) and (2) of the Act 

generally prohibit an affiliated person of 

a registered investment company, or an 

affiliated person of such a person 

(‘‘second tier affiliate’’), from selling any 

security to or purchasing any security 

from the company. Section 2(a)(3) of the 

Act defines ‘‘affiliated person’’ to 

include any person directly or indirectly 

owning, controlling, or holding with 

power to vote 5% or more of the 

outstanding voting securities of the 

other person and any person directly or 

indirectly controlling, controlled by, or 

under common control with, the other 

person. Section 2(a)(9) of the Act 

provides that a control relationship will 

be presumed where one person owns 

more than 25% of another person’s 

voting securities. The Funds may be 

deemed to be controlled by the Advisor 

or an entity controlling, controlled by or 

under common control with the Advisor 

and hence affiliated persons of each 

other. In addition, the Funds may be 

deemed to be under common control 

with any other registered investment 

company (or series thereof) advised by 

the Advisor or an entity controlling, 

controlled by or under common control 

with the Advisor (an ‘‘Affiliated Fund’’). 

10. Applicants request an exemption 

from section 17(a), under sections 6(c) 

and 17(b), to permit in-kind purchases 

and redemptions by persons that are 

affiliated persons or second tier 

affiliates of the Funds solely by virtue 

of one or more of the following: (1) 

holding 5% or more, or more than 25%, 

of the outstanding Shares of the 

respective Trust or one or more Funds; 

(2) an affiliation with a person with an 

ownership interest described in (1); or 

(3) holding 5% or more, or more than 

25%, of the shares of one or more 

Affiliated Funds. 

11. Applicants contend that no useful 

purpose would be served by prohibiting 

these affiliated persons or second tier 

affiliates of a Fund from purchasing or 

redeeming Creation Units through ‘‘inkind’’ transactions. The deposit 

procedure for in-kind purchases and the 

redemption procedure for in-kind 

redemptions will be the same for all 

purchases and redemptions. Deposit 

Securities and Fund Securities will be 

valued under the same objective 

standards applied to valuing Portfolio 

Securities. Therefore, applicants state 

that in-kind purchases and redemptions 

will afford no opportunity for the 

affiliated persons and second tier 

affiliates described above to effect a 

transaction detrimental to the other 

holders of Shares. Applicants also 

believe that in-kind purchases and 

redemptions will not result in abusive 

self-dealing or overreaching by these 

persons of the Fund. 

Applicants’ Conditions 

The applicants agree that any order of 

the Commission granting the requested 

relief will be subject to the following 

conditions: 

1. Each Prospectus will clearly 

disclose that, for purposes of the Act, 

Shares are issued by the Fund, which is 

a registered investment company and 

that the acquisition of Shares by 

investment companies and companies 

relying on sections 3(c)(1) or 3(c)(7) of 

the Act is subject to the restrictions of 

section 12(d)(1) of the Act, except as 

permitted by an exemptive order that 

permits registered investment 

companies to invest in a Fund beyond 

the limits in section 12(d)(1), subject to 

certain terms and conditions, including 

that the registered investment company 

enter into an agreement with the Fund 

regarding the terms of the investment. 

2. As long as the Funds operate in 

reliance on the requested order, the 

Shares of the Funds will be listed on a 

Stock Exchange. 

3. Neither the Trusts nor any Fund 

will be advertised or marketed as an 

open-end investment company or a 

mutual fund. Each Fund’s Prospectus 

will prominently disclose that the Fund 

is an actively managed exchange-traded 

fund. Each Prospectus will prominently 

disclose that the Shares are not 

individually redeemable shares and will 

disclose that the owners of the Shares 

may acquire those Shares from the Fund 

and tender those Shares for redemption 

to the Fund in Creation Units only. Any 

advertising material that describes the 

purchase or sale of Creation Units or 

refers to redeemability will prominently 

disclose that the Shares are not 

individually redeemable and that 

owners of the Shares may acquire those 

Shares from the Fund and tender those 

Shares for redemption to the Fund in 

Creation Units only. 

4. The Web site for the Funds, which 

is and will be publicly accessible at no 

charge, will contain the following 

information, on a per Share basis, for 

each Fund: (a) the prior Business Day’s 

NAV and the Bid/Ask Price, and a 

calculation of the premium or discount 

of the Bid/Ask Price against the NAV; 

and (b) data in chart format displaying 

the frequency distribution of discounts 

and premiums of the daily Bid/Ask 

Price against the NAV, within 

appropriate ranges, for each of the four 

previous calendar quarters (or for the 

life of the Fund, if shorter). 

5. The Prospectus and annual report 

for each Fund will also include: (a) the 

information listed in condition 4(b), (i) 

in the case of the Prospectus, for the 

most recently completed year (and the 

most recently completed quarter or 

quarters, as applicable) and (ii) in the 

case of the annual report, for the 

immediately preceding five years (or for 

the life of the Fund, if shorter), and (b) 

calculated on a per Share basis for 

one-, five- and ten-year periods (or for 

the life of the Fund, if shorter), the 

cumulative total return and the average 

annual total return based on NAV and 

Bid/Ask Price. 

6. On each Business Day, before 

commencement of trading in Shares on 

the Stock Exchange, the Fund will 

disclose on its Web site the identities 

and quantities of the Portfolio Securities 

and other assets held by the Fund that 

will form the basis for the Fund’s 

calculation of NAV at the end of the 

Business Day. 

7. The Advisor or Subadvisor, directly 

or indirectly, will not cause any 

Authorized Participant (or any investor 

on whose behalf an Authorized 

Participant may transact with the Fund) 

to acquire any Deposit Security for the 

Fund through a transaction in which the 

Fund could not engage directly. 

8. The requested order will expire on 

the effective date of any Commission 

rule under the Act that provides relief 

permitting the operation of actively 

managed exchange-traded funds. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23366 Filed 10–2–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58678; File No. SR–Amex– 

2008–64] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Order 

Approving the Adoption of New Rule 

478T To Set Forth the Temporary 

Procedures That Will Apply To 

Disciplinary Proceedings Pending as 

of the Closing Date of the Acquisition 

of Amex by NYSE Euronext 

September 29, 2008. 

On July 28, 2008, American Stock 

Exchange LLC, a Delaware limited 

mstockstill on PROD1PC66 with NOTICES

57706 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 58286 

(August 1, 2008), 73 FR 46097 (‘‘Amex Notice’’). 

4 Immediately following the Mergers, NYSE 

Euronext plans to effectuate certain related 

transactions, as a result of which NYSE Alternext 

US will become a direct wholly-owned subsidiary 

of NYSE Group, Inc. (‘‘NYSE Group’’), the whollyowned subsidiary of NYSE Euronext (‘‘Related 

Transactions’’). For a detailed description of the 

Mergers and Related Transactions, see Securities 

Exchange Act Release No. 58284 (August 1, 2008), 

73 FR 46086 (SR–Amex–2008–62) (‘‘Amex Merger 

Notice’’). 

5See Amex Merger Notice, supra note 4 and 

Securities Exchange Act Release No. 58673 

(September 29, 2009) (order approving SR–Amex– 

2008–62). 

6Paragraph (a) of proposed NYSE Alternext US 

Rule 478T(c) defines ‘‘Legacy Disciplinary 

Proceedings’’ to include disciplinary charges, 

executed (but not yet approved) stipulations and 

consents, suspensions, summary proceedings, and 

summary fine notices for minor rule violations. 

7See paragraph (c) of proposed NYSE Alternext 

US Rule 478T(c). 

8Amex notes that the proposed NYSE Alternext 

US roster of appointed hearing officers and hearing 

board members would be substantially similar to 

that of the NYSE. 

9See proposed NYSE Alternext US Rules 475(c) 

and (j) and 476(e)–(g), and Amex Merger Notice, 

supra note 4. 

10See paragraph (b) of proposed NYSE Alternext 

US Rule 478T(c). 

11Section 3(f) of Legacy Article V of the Amex 

Constitution and Section 5(a) of Legacy Article IV 

of the Amex Constitution hold open the possibility 

that the NYSE Regulation Committee may also be 

charged with the responsibility to hear: (i) Appeals 

from suspensions of members and member 

organizations in view of their financial and/or 

operating condition and (ii) applications for 

reinstatement following such suspensions. 

12Specifically, any review of a disciplinary 

decision shall be conducted by the NYSE Alternext 

US Board or the NYSE Regulation Committee, in 

the sole discretion of the NYSE Alternext US Board. 

Upon review, and with the advice of the NYSE 

Regulation Committee, the NYSE Alternext US 

Board, by the affirmative vote of a majority of the 

NYSE Alternext US Board then in office, may 

sustain any determination or penalty imposed, or 

both, may modify or reverse any such 

determination, and may increase, decrease or 

eliminate any such penalty, or impose any penalty 

permitted under the provisions of Rule 476. Unless 

the NYSE Alternext US Board otherwise 

specifically directs, the determination and penalty, 

if any, of the NYSE Alternext US Board after review 

shall be final and conclusive subject to the 

provisions for review of the Act. 

13These new members of the NYSE Regulation 

Committee must include at least one of each of the 

following: (1) An individual associated with a 

member organization of NYSE Alternext US that 

engages in a business involving substantial direct 

contact with securities customers; (2) An individual 

associated with an member organization of NYSE 

Alternext US that is registered as a specialist and 

spends a substantial part of his or her time on the 

trading floor of NYSE Alternext US; (3) an 

individual associated with a member organization 

of NYSE Alternext US not registered as a specialist 

that spends a majority of his or her time on the 

trading floor of NYSE Alternext US and has as a 

substantial part of his business the execution of 

transactions on the trading floor of NYSE Alternext 

US for other than his or her own account or the 

account of his NYSE Alternext US member 

organization; and (4) an individual associated with 

a NYSE Alternext US Member Organization not 

registered as a specialist that spends a majority of 

his or her time on the trading floor of NYSE 

Alternext US and has as a substantial part of his or 

her business the execution of transactions on the 

trading floor of NYSE Alternext US for his own 

account or the account of his or her NYSE Alternext 

US Member Organization. See Securities Exchange 

Act Release No. 58285 (August 1, 2008), 73 FR 

46117 (SR–NYSE–2008–60). 

liability company (‘‘Amex’’ 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 

adopt a new rule to set forth the 

temporary procedures that would apply 

to the disciplinary proceedings pending 

with the Exchange as of the closing date 

of the acquisition of Amex by NYSE 

Euronext (‘‘Transaction Date’’). On 

August 7, 2008, the proposed rule 

change was published for comment in 

the Federal Register.3 The Commission 

received no comments on the proposed 

rule change. This order grants approval 

to the proposed rule change. 

Pursuant to an agreement dated 

January 17, 2008, NYSE Euronext, the 

ultimate parent company of NYSE, Inc. 

(‘‘NYSE’’) and NYSE Arca, Inc. (‘‘NYSE 

Arca’’), is acquiring Amex, through a 

series of mergers (‘‘Mergers’’).4 Upon 

completion of the Mergers and Related 

Transactions, Amex will continue to 

operate as a national securities exchange 

under Section 6 of the Act and will be 

renamed NYSE Alternext US LLC 

(‘‘NYSE Alternext US’’). 

In a separate proposed rule change 

adopting various rules in connection 

with the Mergers and Related 

Transactions, Amex proposes to adopt 

new NYSE Alternext US Rules 475, 476 

and 477 as its disciplinary rules, which 

are substantially similar to the existing 

NYSE disciplinary rules.5 To avoid any 

potential confusion to respondents in 

disciplinary matters that had been 

commenced by Amex and still pending 

as of the Transaction Date (each, a 

‘‘Legacy Disciplinary Proceeding’’),6

Amex proposes applying rules that are 

substantially similar to the current 

procedures governing Amex 

disciplinary proceedings to such Legacy 

Disciplinary Proceedings. Accordingly, 

Amex proposes to adopt new Rule 478T 

to set forth the temporary procedures 

that will apply to such Legacy 

Disciplinary Proceedings. This rule will 

become operative as of the closing of the 

Mergers and Related Transactions. 

Currently, the procedural rules 

governing Amex disciplinary 

proceedings are set forth in portions of 

the Amex Constitution, Amex Rule 345, 

and the Rules of Procedure in 

Disciplinary Matters (collectively, the 

‘‘Legacy Disciplinary Procedural 

Rules’’). Proposed NYSE Alternext US 

Rule 478T will effectively ‘‘grandfather’’ 

the substance of these Legacy 

Disciplinary Procedural Rules with 

respect to resolution of disciplinary 

matters by means of a settlement (i.e., 

stipulation and consent) or hearing at 

NYSE Alternext US. The Legacy 

Disciplinary Procedural Rules, as 

incorporated in proposed Rule 478T(c), 

have been modified in certain respects 

from their current form, to account for 

certain changes in the disciplinary 

structures and processes at NYSE 

Alternext US that are expected as a 

consequence of the Mergers and Related 

Transactions.7

Amex proposes to replace the Amex 

roster of appointed hearing officers and 

hearing board members from which the 

chairman and members of individuallyconstituted disciplinary hearing panels 

are selected, with a new roster 

appointed by the Chairman of the NYSE 

Alternext US Board of Directors (‘‘NYSE 

Alternext US Board’’) pursuant to 

proposed NYSE Alternext US Rule 

476(b). Notwithstanding the change in 

the manner in which the roster of 

hearing officers and hearing board 

members is assembled, the process of 

selection of hearing officers and hearing 

board members from that roster to serve 

on an individual hearing panel will not 

change.8

In addition, appeals from disciplinary 

determinations will be governed solely 

by the proposed NYSE Alternext US 

rules pertaining to appeals.9

Specifically, Amex proposes to 

eliminate the Amex Adjudicatory 

Council (‘‘AAC’’), a body which 

currently hears appeals from 

determinations of Amex disciplinary 

panels, and whose decisions, in turn, 

can be further appealed to Amex’s 

Board of Governors. Instead, these 

functions of the AAC will be performed 

by the NYSE Alternext US Board or by 

an official standing committee of NYSE 

Regulation (the ‘‘NYSE Regulation 

Committee’’), in the sole discretion of 

the NYSE Alternext US Board.10 The 

NYSE Regulation Committee will be 

charged with the responsibility to 

review determinations in Legacy 

Disciplinary Proceedings 11 and render 

advisory opinions to the NYSE 

Alternext US Board, which will have 

the ultimate responsibility to rule on 

such appeals.12 The NYSE Regulation 

Committee will be expanded to include 

at least four individuals who are 

associated with member organizations 

of NYSE Alternext US.13

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Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57707 

14 In approving the proposal, the Commission has 

considered the proposed rules’ impact on 

efficiency, competition, and capital formation. See 

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

15 15 U.S.C. 78f(b)(6) and 15 U.S.C. 78f(b)(7). 

16 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. 58284 

(August 1, 2008), 73 FR 46086 (‘‘Amex Notice’’). 

4 In Amendment No. 4, Amex: (1) Made several 

technical, non-substantive clarifying changes to the 

proposed NYSE Alternext US LLC rules; (2) 

amended the proposed NYSE Alternext US LLC 

rules to provide for other Amex proposed rule 

changes that have been approved since this 

proposal was filed; (3) modified the description of 

Arca Securities, LLC (‘‘Arca Securities) to include, 

among other things, a representation that, with 

respect to its oversight of Arca Securities, which 

will be an affiliated member of NYSE Alternext US 

LLC after the Mergers and Related Transactions (as 

described herein), NYSE Regulation, Inc. (‘‘NYSE 

Regulation’’) has agreed with Amex that it will 

provide a report to NYSE Alternext US LLC’s Chief 

Regulatory Officer on a quarterly basis that: (a) 

Quantifies all open alerts (of which NYSE 

Regulation is aware) that identify Arca Securities as 

a participant that has potentially violated NYSE 

Alternext US LLC or Commission rules and (b) 

quantifies the number of all open investigations that 

identify Arca Securities as a participant that has 

potentially violated NYSE Alternext US LLC or 

Commission rules; (4) revised the rule filing to 

reflect that the parties to a multi-party regulatory 

services agreement (as described herein) have been 

modified to include NYSE Alternext US LLC, NYSE 

Group, Inc., NYSE Regulation, and Financial 

Industry Regulatory Authority (‘‘FINRA’’); (5) 

revised the rule filing to reflect a change to the 

Mergers and Related Transactions, which will not 

affect the final outcome of the Mergers and Related 

Transactions (as described herein) through which 

NYSE Alternext US LLC will become a subsidiary 

of NYSE Euronext; and (6) clarified that Arca 

Securities will not provide ‘‘outbound’’ routing 

services for NYSE Alternext US LLC until the 

relocation of the NYSE Alternext US LLC equities 

and options trading facilities to the NYSE trading 

floor or the electronic trading platform of NYSE or 

NYSE Arca, Inc., as applicable, and that, at a later 

time, NYSE Alternext US LLC will submit a 

separate rule filing to the Commission seeking 

approval to provide such outbound routing services 

to NYSE Alternext US LLC. 

5 15 U.S.C. 78s(b)(1). 

6 17 CFR 240.19b–4. 

7See Securities Exchange Act Release No. 58285 

(August 1, 2008,) 73 FR 46117 (SR–NYSE–2008–60) 

(‘‘NYSE Notice’’). 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulation 

thereunder applicable to a national 

securities exchange.14 In particular, the 

Commission finds that the proposed 

rule change is consistent with Sections 

6(b)(6) and 6(b)(7) of the Act 15 in that 

it provides a fair procedure for the 

discipline of members and persons 

associated with members. The 

Commission further finds that the 

proposed rule change provides NYSE 

Alternext US with the ability to comply, 

and with the authority to enforce 

compliance by its members and persons 

associated with its members, with the 

provisions of the Act, the rules or 

regulations thereunder, or the rules of 

NYSE Alternext US. 

Conclusion 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to a national 

securities exchange. 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–Amex–2008– 

64), be and hereby is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23314 Filed 10–2–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58673; File Nos. SR–Amex– 

2008–62 and SR–NYSE–2008–60] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of Amendment No. 4 and 

Order Granting Accelerated Approval 

to a Proposed Rule Change, as 

Modified by Amendments No. 1 and 4 

Thereto, Relating to the Acquisition of 

the Amex by NYSE Euronext; SelfRegulatory Organizations; New York 

Stock Exchange LLC; Order Granting 

Approval to a Proposed Rule Change, 

as Modified by Amendment No. 1 

Thereto, Relating to the Acquisition of 

the Amex by NYSE Euronext 

September 29, 2008. 

I. Introduction 

On July 23, 2008, American Stock 

Exchange LLC, a Delaware limited 

liability company (‘‘Amex’’), 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 in connection with the 

acquisition of Amex by NYSE Euronext, 

a Delaware Corporation (‘‘NYSE 

Euronext’’). On July 30, 2008, Amex 

filed Amendment No. 1 to the proposed 

rule change. On August 7, 2008, the 

proposed rule change, as amended, was 

published for comment in the Federal 

Register.3 Amex filed Amendment No. 2 

to the proposed rule change on 

September 3, 2008, and withdrew 

Amendment No. 2 on September 4, 

2008. Amex filed Amendment No. 3 on 

September 4, 2008, and withdrew 

Amendment No. 3 on September 5, 

2008. Amex filed Amendment No. 4 on 

September 5, 2008.4 The Commission 

received no comments on the proposed 

rule change. This order provides notice 

of filing of Amendment No. 4 to the 

proposed rule change, and grants 

accelerated approval to the proposed 

rule change, as modified by 

Amendments No. 1 and 4. 

On July 23, 2008, the New York Stock 

Exchange LLC (‘‘NYSE’’), a New York 

limited liability company, filed with the 

Commission, pursuant to Section 

19(b)(1) of the Act 5 and Rule 19b–4 

thereunder,6 a proposed rule change in 

connection with the acquisition of 

Amex by NYSE Euronext. On July 30, 

2008, the NYSE filed Amendment No. 1 

to the proposed rule change. On August 

7, 2008, the proposed rule change, as 

amended, was published for comment 

in the Federal Register.7 The 

Commission received no comments on 

the proposed rule change. This order 

grants approval to the proposed rule 

change, as modified by Amendment No. 

1. 

II. Background 

On January 17, 2008, NYSE Euronext, 

Amex, Amex’s parent companies (The 

Amex Membership Corporation (‘‘MC’’) 

and its direct wholly-owned subsidiary, 

AMC Acquisition Sub, Inc.), and several 

other entities created by NYSE Euronext 

and Amex in connection with the 

Mergers entered into an agreement 

(‘‘Merger Agreement’’) to effect a series 

of mergers (‘‘Mergers’’) as a result of 

which the successor to Amex, to be 

renamed ‘‘NYSE Alternext US LLC’’ 

(‘‘NYSE Alternext US’’), will become a 

mstockstill on PROD1PC66 with NOTICES