60742 Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices 

20 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. 

4See SEC Release No. 34–56920 (Dec. 6, 2007) 

(SR–NYSE–2007–111). 

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

Number SR–ISE–2008–76 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2008–76. 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, 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 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 No. SRISE–2008–76 and should be submitted 

on or before November 4, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24237 Filed 10–10–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58743; File No. SR–NYSE– 

2008–102] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending Rule 

48 To Permit the Exchange To Declare 

an Extreme Market Volatility Condition 

and Suspend Certain NYSE 

Requirements Relating to the Closing 

of Securities at the Exchange 

October 7, 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 October 

2, 2008, New York Stock Exchange LLC 

(‘‘NYSE’’ 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 

The Exchange proposes to amend 

Rule 48 to permit the Exchange to 

declare an extreme market volatility 

condition and suspend certain NYSE 

requirements relating to the closing of 

securities at the Exchange. The text of 

the proposed rule change is available at 

NYSE, www.nyse.com, and the 

Commission’s Public Reference Room. 

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, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to amend 

NYSE Rule 48 to provide the Exchange 

with the ability to suspend certain 

requirements at the closing when 

extremely high market volatility could 

negatively affect the ability to ensure a 

fair and orderly close. 

Based on what the markets have 

experienced in the past month, and in 

particular, at the close on September 29, 

2008, the Exchange believes that in 

addition to the open, an extreme market 

volatility condition can also impact the 

close at the Exchange. In particular, the 

Exchange believes that in an extreme 

market volatility condition at the close, 

the Exchange should be able to permit 

orders to be entered after 4 p.m. for the 

purpose of offsetting an imbalance that 

may exist as of that time and to cancel 

or reduce a market-on-close or limit-onclose order that is a legitimate error and 

would cause significant price 

dislocation at the close. 

NYSE Rule 48 Background 

The Exchange adopted NYSE Rule 48 

on December 5, 2007 in order to provide 

the Exchange with the ability to 

suspend the requirement to disseminate 

price indications and obtain Floor 

Official approval prior to the opening 

when extremely high market volatility 

could negatively impact the operation of 

the market by causing Floor-wide delays 

in the opening of securities on the 

Exchange.4

Under NYSE Rule 48, in the event of 

extremely high market volatility that 

would have a Floor-wide impact on the 

ability of specialists to arrange for the 

timely opening of trading at the 

Exchange under the normal rules, a 

qualified Exchange officer may declare 

an extreme market volatility condition. 

For purposes of the rule, a ‘‘qualified 

Exchange officer’’ means the Chief 

Executive Officer of NYSE Euronext, 

Inc. or his or her designee, or the Chief 

Executive Officer of NYSE Regulation, 

Inc., or his or her designee. While either 

may declare the extreme market 

volatility condition, each must make a 

reasonable effort to consult with the 

other prior to taking such action. 

NYSE Rule 48 is intended to be 

invoked only in those situations where 

the potential for extreme market 

volatility would likely impair Floorwide operations at the Exchange by 


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Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices 60743 

impeding the fair and orderly opening 

of securities. Accordingly, the rule sets 

forth a number of factors that the 

qualified Exchange officer would have 

to consider before declaring such a 

condition, including: volatility during 

the previous day’s trading session; 

trading in foreign markets before the 

open; substantial activity in the futures 

market before the open; the volume of 

pre-opening indications of interest; 

evidence of pre-opening significant 

order imbalances across the market; 

government announcements; news and 

corporate events; and any such other 

market conditions that could impact 

Floor-wide trading conditions. 

Once the qualified Exchange officer 

has reviewed such factors and 

determined that an extreme market 

volatility condition exists, the qualified 

Exchange officer must make reasonable 

efforts to consult with the Commission 

staff before making such a declaration. 

The qualified Exchange officer must 

also document the basis for making such 

a declaration. If the qualified Exchange 

officer is unable to reach the 

Commission staff before the opening, he 

or she may declare such a condition, but 

must, as promptly as practicable in the 

circumstances, inform the Commission 

staff of such declaration, and the basis 

for making such declaration. 

Because the declaration of an extreme 

market volatility condition concerns the 

opening of securities at the Exchange, 

the rule further provides that such 

condition must be declared before the 

scheduled opening of securities at the 

Exchange. Moreover, such declaration 

would be in effect only for the opening 

of that trading session (or reopenings 

during the same trading day following 

the imposition of a mandatory halt 

pursuant to NYSE Rule 80B). Should 

market conditions that led to the 

declaration continue on subsequent 

days, the Exchange would have to 

review on a day-by-day basis the factors 

necessitating such a declaration and on 

each day make a reasonable effort to 

consult with the Commission staff as 

described above. 

The Exchange notes that even when 

the dissemination and Floor Official 

(including Senior Floor Official and 

above) approval requirements are 

suspended, specialists remain 

responsible for the fair and orderly 

opening of securities. Exchange rules 

already provide that when Floor Official 

approval is sought for certain actions, 

the specialist remains ultimately 

responsible for arranging the opening of 

securities at the Exchange. This 

obligation remains unchanged. Even in 

the absence of price indications and a 

Floor Official’s independent, impartial 

review of the opening, specialists are 

still charged with ensuring that an 

opening price reflects market conditions 

and all participants have had a 

reasonable opportunity to participate. 

The Exchange notes also that when 

Rule 48 is invoked, it does not affect 

situations where the opening of a 

security was delayed for reasons 

unrelated to extreme market volatility, 

such as where there is material news 

pending that justifies a regulatory halt 

under NYSE Rule 123D. In such cases, 

notwithstanding the invocation of Rule 

48, the specialist in the affected security 

is expected to follow regular procedures 

for opening the security (that is, as if 

Rule 48 had not been invoked). 

Proposed Amendments to Rule 48 

Background 

Pursuant to NYSE Rule 52, dealings 

on the Exchange are limited to the hours 

during which the Exchange is open for 

business, i.e., 9:30 a.m. to 4 p.m. Except 

for certain pre-opening submission of 

orders, a member or member 

organization may not make bids or 

offers outside of those hours, and cannot 

enter orders after 4 p.m. (or earlier, in 

the event of an earlier scheduled close). 

In the event a security has an 

imbalance of market-on-close (‘‘MOC’’) 

or limit-on-close (‘‘LOC’’) orders or 

when the closing price would elect a 

significant volume of stop orders, there 

may be little time to attract offsetting 

orders before 4 p.m. For example, a 

member, member organization, or 

customer may be willing to offset the 

imbalance, but be unable to enter an 

order before 4 p.m. Under current 

Exchange rules, specialists are enabled 

to represent such legitimate market 

interest that was willing to participate 

in the close, but could not enter a timely 

order. When a specialist has included 

another member’s or member 

organization’s interest in offsetting the 

imbalance when setting a closing price, 

NYSE Rule 902(a)(ii)(B) permits the 

specialist and such member or member 

organization to enter a coupled order 

into Crossing Session 1. Pursuant to 

Rule 903(d)(ii), the specialist must 

obtain Floor Official approval in order 

to enter a coupled order pursuant to that 

rule. Such procedure essentially permits 

the specialist to represent the member’s 

or member organization’s interest on a 

riskless principal basis. 

NYSE Rule 123C(1) and (2) govern the 

entry of MOC and LOC orders at the 

Exchange. MOC and LOC orders must 

be entered by 3:40 p.m., unless entered 

to offset a published imbalance. 

Between 3:40 p.m. and 3:50 p.m., an 

MOC or LOC order cannot be cancelled 

or reduced, except in the case of a 

legitimate error. After 3:50 p.m., an 

MOC or LOC order cannot be cancelled 

for any reason, including in the case of 

a legitimate error. 

Suspending Certain Rules During an 

Extreme Market Volatility Condition at 

the Close 

On September 29, 2008, the U.S. 

markets experienced the largest single 

point drop in the history of the Dow 

Jones Industrial Average (‘‘DJIA’’)—777 

points. That drop capped a month of 

volatility and significant changes to the 

financial marketplace, including the 

federal takeovers of Fannie Mae, 

Freddie Mac, American International 

Group, Inc., and Washington Mutual, 

the bankruptcy of Lehman Brothers, 

Inc., the acquisition of Merrill Lynch by 

Bank of America, and the sale of 

Wachovia’s banking business to 

Citigroup. 

Rule 48 has served as an invaluable 

tool for the Exchange to ensure a fair 

and orderly open in these times of 

extreme market volatility. During the 

month of September, the Exchange 

invoked Rule 48 nine times. This, in 

contrast to the four times that the 

Exchange invoked Rule 48 in the prior 

nine-month period, since it was 

adopted. Given the events of September 

29, 2008, which included market-wide 

sell imbalances at the close, the 

Exchange believes that it should have 

the ability to declare an extreme market 

volatility condition at the close as well 

so that the Exchange can suspend 

certain rules to ensure a fair and orderly 

close. 

The Exchange therefore proposes to 

amend Rule 48 to include the close of 

trading as a time when a qualified 

Exchange officer would be permitted to 

declare an extreme market volatility 

condition. In such event, the Exchange 

proposes temporarily suspending NYSE 

Rules 52 (Hours of Operation) and 

123C(1) and (2) (Market on the Close 

Policy and Expiration Policy), provided 

that certain requirements are met. The 

Exchange also proposes to amend Rule 

48 to clarify that the existing rule covers 

not just openings of trading, but also 

reopening of trading following a marketwide halt of securities at the Exchange. 

To enable a qualified Exchange officer 

to declare a Rule 48 condition at the 

close, the Exchange proposes amending 

Rule 48(c) to include that a qualified 

Exchange officer may consider the 

volatility during that day’s trading 

session and evidence of significant 

order imbalances across the market at 

the close for purposes of determining 

whether to declare an extreme market 

volatility condition at the close. The 


jlentini on PROD1PC65 with NOTICES
60744 Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices 

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

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6). 

8 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory 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. 

9 17 CFR 240.19b–4(f)(6)(iii). 

Exchange also proposes that an extreme 

market volatility condition at the close 

is a separate event and must be 

considered in light of the facts and 

circumstances leading to the close. A 

Rule 48 condition at the opening would 

not extend to the close; as proposed, a 

qualified Exchange officer would need 

to make an independent determination 

to invoke Rule 48 at the close regardless 

of whether Rule 48 was invoked at the 

open. 

To ensure a fair and orderly close in 

an extreme market volatility condition, 

the Exchange proposes to temporarily 

suspend Rule 52 so that interest can be 

solicited and entered into Exchange 

systems to offset imbalances after the 

scheduled close of trading. As noted 

above, while interest that has not been 

entered by 4 p.m. can be included to 

offset imbalances under Exchange rules, 

the process for including such interest 

in the close requires a specialist to 

represent the interest and then enter a 

coupled order in Crossing Session I with 

the member or member organization 

who was willing to include such 

interest in the close. Because of the need 

for Floor Official approval and the fact 

that such orders are entered manually, 

processing Rule 902(a)(ii)(B) coupled 

orders, particularly when there are 

multiple coupled orders per stock, can 

take time. 

The Exchange therefore proposes 

suspending Rule 52 for the sole purpose 

of bypassing the Rule 902 process in 

times of extreme market volatility. As 

proposed, during an extreme market 

volatility condition, interest may be 

solicited—including interest that may 

not have been present prior to 4 p.m.— 

to offset any imbalance that may exist as 

of 4 p.m. (or earlier, in the case of an 

earlier scheduled close). If offsetting 

interest is received in response to such 

solicitation, rather than have the 

specialist represent such offsetting 

interest in the close, as proposed, such 

interest could be entered directly into 

Exchange systems on behalf of the 

member or member organization 

representing such interest. Because 

Exchange systems do not allow for the 

electronic entry of orders after 4 p.m., as 

proposed, such interest must be 

represented manually by a Floor broker 

in the closing auction process and 

entered into Exchange systems by the 

specialist by no later than 4:30 p.m. The 

Exchange further proposes that the entry 

of any orders after 4 p.m. pursuant to 

the proposed rule must be under the 

supervision and approval of a Floor 

Governor. 

By permitting such offsetting interest 

to be entered directly into Exchange 

systems, the specialist will be better 

able to manage the order flow that may 

be entered to offset the imbalance, 

particularly if such offsetting order flow 

is at multiple limit prices. It will also 

enable a better audit trail of whose 

interest participated in the close. To 

ensure a complete audit trail, as 

proposed, any offsetting interest entered 

after 4 p.m. during an extreme market 

volatility condition must also be entered 

into Front End Systemic Capture 

database (‘‘FESC’’), as required by NYSE 

Rule 123. Because such interest may not 

have been known until after 4 p.m., as 

proposed, a Floor broker may represent 

such offsetting interest after 4 p.m. 

without first entering the details of the 

order into a FESC, as required by NYSE 

Rule 123, so long as such orders are 

entered into FESC on an ‘‘as of’’ basis 

immediately following execution of the 

order. 

The Exchange also proposes 

providing the ability to temporarily 

suspend the NYSE Rule 123C(1) and (2) 

requirements that MOC and LOC orders 

that are legitimate errors cannot be 

cancelled or reduced after 3:50 p.m. 

during an extreme market volatility 

condition at the close. As proposed, 

only an erroneous MOC or LOC that 

would cause significant price 

dislocation in the close could be 

considered for cancellation. In other 

words, an MOC or LOC order that is a 

legitimate error that would have no 

impact on the closing price could not 

take advantage of the proposed 

temporary suspension, even in an 

extreme market volatility condition. If it 

is determined that such an MOC/LOC 

legitimate error would dislocate the 

close, such order can be cancelled or 

reduced at any time up until that 

particular security has closed. To 

further ensure that the ability to cancel 

an MOC or LOC order after 3:50 is not 

abused, as proposed, such an order can 

be cancelled or reduced only with the 

supervision and approval of both an 

Executive Floor Governor and a 

qualified Exchange officer. In the event 

an Executive Floor Governor is not 

available, a Floor Governor’s approval 

must be obtained. 

The Exchange also proposes adding 

supplementary material to NYSE Rule 

48 that provides that the amendments 

proposed in this rule filing to include an 

extreme market volatility condition at 

the close and the related proposed rule 

suspensions in such a condition are 

temporary and will end on December 

31, 2008. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 5 that an Exchange 

have rules that are 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. 

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. 

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 after the date of the 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 6 and Rule 

19b–4(f)(6) thereunder.7

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) normally 

does not become operative for 30 days 

after the date of its filing.8 However, 

Rule 19b–4(f)(6)(iii) 9 permits the 

Commission to designate a shorter time 

if such action is consistent with the 

protection of investors and the public 

interest. In view of the immediate 

nature of the relief requested, the 

Exchange seeks to have the proposed 

amendments become operative 

immediately. The Exchange has 

requested that the Commission waive 

the 30-day operative delay. Waiver of 

this period will allow the Exchange to 


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Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices 60745 

10See Securities Exchange Act Release No. 58592 

(September 18, 2008), 73 FR 55169 (September 24, 

2008). 

11For 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). 12 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. 80a–1. 

4See Securities Exchange Act Release No. 58518 

(September 11, 2008), 73 FR 54446. 

immediately implement the proposed 

rule change. 

The Exchange believes that given the 

current market climate, immediate 

implementation of the foregoing 

proposed rule change is necessary in 

order to avoid significant disruption to 

the market and to ensure investor 

protection in light of the potential for 

additional volatility in the market as the 

credit crisis continues. In particular, 

recent and near-term events, including 

the Emergency Economic Stabilization 

Act of 2008 and the pending expiration 

of the Commission’s Emergency Order 

that prohibits persons from selling short 

the securities of financial institutions,10

could cause additional volatility in the 

market in the coming days. Moreover, 

the Exchange proposes suspending only 

those rules that could impact 

specialists’ ability to arrange a fair and 

orderly close during an extreme market 

volatility condition. Finally, the 

proposed changes to NYSE Rule 48 are 

temporary and will end on December 

31, 2008. The Exchange believes that its 

need to immediately implement the 

proposed rule change satisfies the 

standards set out in the Exchange Act 

and related rules. 

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.11

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the 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 

Number SR–NYSE–2008–102 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–102. 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, 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 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–2008–102 and 

should be submitted on or before 

November 4, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24236 Filed 10–10–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58745; File No. SR– 

NYSEArca–2008–94] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Accelerated 

Approval of a Proposed Rule Change 

Amending NYSE Arca Equities Rules 

5.1(b)(14) and 5.2(j)(2) To Permit the 

Listing of Equity Linked Notes That 

Are Linked to Securities Issued by 

Companies Registered Under the 

Investment Company Act of 1940 

October 7, 2008. 

On August 25, 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 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend NYSE Arca Equities Rules 

5.1(b)(14) and 5.2(j)(2) to permit the 

listing of Equity Linked Notes (‘‘ELNs’’) 

that are linked to securities issued by 

companies registered under the 

Investment Company Act of 1940 

(‘‘1940 Act’’) 3 and are listed on a 

national securities exchange. The 

proposed rule change was published in 

the Federal Register on September 19, 

2008 for a 15-day comment period.4 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 amend 

NYSE Arca Equities Rules 5.1(b)(14), the 

Exchange’s definition of ELNs, and 

NYSE Arca Equities Rule 5.2(j)(2), the 

Exchange’s listing standards for ELNs, 

to permit the listing of ELNs that are 

linked to securities issued by companies 

registered under the 1940 Act and are 

listed on a national securities exchange. 

A. Definition of ELN 

NYSE Arca Equities Rule 5.1(b)(14) 

currently defines ELNs as notes that are 

linked, in whole or in part, to the 

market performance of up to thirty 

common stocks or non-convertible 

preferred stocks. The Exchange 

proposes to amend NYSE Arca Equities 

Rule 5.1(b)(14) and define ELNs as notes 

that are linked, in whole or in part, to 


jlentini on PROD1PC65 with NOTICES