[Federal Register Volume 74, Number 113 (Monday, June 15, 2009)]
[Notices]
[Pages 28310-28315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13970]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60065; File No. SR-NYSEArca-2009-47]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change 
Relating to Generic Listing Rules for Currency Trust Shares

June 8, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on May 28, 2009, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons and is approving the proposed rule change on an accelerated 
basis.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See infra notes 7 and 36 and accompanying text.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through its wholly owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities'' or the ``Corporation''), 
proposes to amend its rules governing NYSE Arca, LLC, which is the 
equities trading facility of NYSE Arca. NYSE Arca is proposing to amend 
NYSE Arca Equities Rule 8.202 (Currency Trust Shares) to provide 
generic listing and trading rules for such securities. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://www.nyse.com.\4\
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    \4\ E-mail from Michael Cavalier, Chief Counsel, NYSE Euronext, 
to Edward Cho, Special Counsel, Division of Trading and Markets, 
Commission, dated June 4, 2009 (``Exchange Confirmation'').

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[[Page 28311]]

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 III 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 currently has rules permitting the listing and 
trading, including trading pursuant to unlisted trading privileges 
(``UTP''), of Currency Trust Shares (NYSE Arca Equities Rule 8.202).\5\ 
The Exchange proposes to amend NYSE Arca Equities Rule 8.202 to include 
provisions for the listing and trading (including trading pursuant to 
UTP) of Currency Trust Shares pursuant to Rule 19b-4(e) \6\ under the 
Act.\7\
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    \5\ See Securities Exchange Act Release No. 53253 (February 8, 
2006), 71 FR 8029 (February 15, 2006) (SR-PCX-2005-123) (order 
approving Rule 8.202 and trading on the Exchange pursuant to UTP of 
shares of the Euro Currency Trust).
    \6\ 17 CFR 240.19b-4(e).
    \7\ The Exchange previously filed a proposed rule change to 
permit listing pursuant to Rule 19b-4(e) of Commodity-Based Trust 
Shares, Currency Trust Shares, and Commodity Index Trust Shares. See 
Securities Exchange Act Release No. 58332 (August 8, 2008), 73 FR 
47996 (August 15, 2008) (SR-NYSEArca-2008-51) (Notice of Filing of 
Proposed Rule Change and Amendment No. 1 Thereto To Adopt Generic 
Listing and Trading Rules for Commodity-Based Trust Shares, Currency 
Trust Shares, and Commodity Index Trust Shares). The Exchange 
withdrew NYSEArca-2008-51 on May 18, 2009. The amendments to NYSE 
Arca Equities Rule 8.202 proposed herein are substantially identical 
to changes to NYSE Arca Equities Rule 8.202 proposed in SR-NYSEArca-
2008-51.
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Generic Listing Standards
    Rule 19b-4(e) under the Act provides that the listing and trading 
of a new derivative securities product by a self-regulatory 
organization (``SRO'') shall not be deemed a proposed rule change, 
pursuant to Section (c)(1) of Rule 19b-4,\8\ if the Commission has 
approved, pursuant to Section 19(b) of the Act,\9\ the SRO's trading 
rules, procedures, and listing standards for the product class that 
would include the new derivatives securities product, and the SRO has a 
surveillance program for the product class.\10\
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    \8\ 17 CFR 240.19b-4(c)(1).
    \9\ 17 U.S.C. 78s(b).
    \10\ See Securities Exchange Act Release No. 40761 (December 8, 
1998), 63 FR 70952 (December 22, 1998) (File No. S7-13-98).
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    The Exchange is proposing to adopt generic listing standards under 
amended Rule 8.202 for Currency Trust Shares,\11\ pursuant to which it 
will be able to trade such securities without Commission approval of 
each individual product pursuant to Section 19(b)(2) of the Act.\12\ 
Instead, the Exchange represents that any securities it lists and/or 
trades pursuant to NYSE Arca Equities Rule 8.202 will satisfy the 
standards set forth therein. The Exchange states that within five (5) 
business days after commencement of trading of a security pursuant to 
NYSE Arca Equities Rule 8.202, the Exchange will file a Form 19b-
4(e).\13\
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    \11\ See Exchange Confirmation, supra note 4 (replacing the term 
``Shares'' with ``Currency Trust Shares'' where applicable).
    \12\ 15 U.S.C. 78s(b)(2).
    \13\ 17 CFR 240.19b-4(e)(2)(ii); 17 CFR 249.820.
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Currency Trust Shares
    The Exchange proposes to amend the definition of the term 
``Currency Trust Shares'' in NYSE Arca Equities Rule 8.202(c) to 
provide that Currency Trust Shares may be issued by a trust that holds 
more than one non-U.S. currency. In addition, NYSE Arca Equities Rule 
8.202(c) would be amended to provide that Currency Trust Shares may be 
surrendered to the Trust by an Authorized Participant (as defined in 
the Trust's prospectus), and the Trust will deliver to the redeeming 
Authorized Participant the specified non-U.S. currency or 
currencies.\14\ The reference to surrender of Currency Trust Shares by 
the beneficial owner would be deleted. NYSE Arca Equities Rule 8.202(d) 
relating to designation of a non-U.S. currency would be amended to 
clarify the rule's application to an issue of Currency Trust Shares 
that holds more than one currency. Commentary .01 also would be amended 
to clarify that Currency Trust Shares are Trust Issued Receipts that 
can hold multiple currencies.
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    \14\ See Exchange Confirmation, supra note 4.
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    The Exchange proposes to amend Commentary .04 to NYSE Arca Equities 
Rule 8.202 to incorporate generic listing and trading standards for 
Currency Trust Shares.\15\ In addition to the general requirements of 
NYSE Arca Equities Rule 8.202, Currency Trust Shares listed on the 
Exchange must satisfy the following initial listing criteria. For a 
series of Currency Trust Shares listed on the Exchange, a minimum of 
100,000 shares of a series of Currency Trust Shares is required to be 
outstanding at commencement of trading.\16\ In addition, for both 
listed Currency Trust Shares and those traded pursuant to UTP: (1) The 
value of the applicable non-U.S. currency must be disseminated by one 
or more major market data vendors on at least a 15-second delayed 
basis; (2) the Indicative Trust Value must be calculated and widely 
disseminated by the Corporation or one or more major market data 
vendors on at least a 15-second basis during the Core Trading Session 
as defined in NYSE Arca Equities Rule 7.34; and (3) the Corporation 
will implement written surveillance procedures applicable to Currency 
Trust Shares.
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    \15\ The Commission has previously approved a number of issues 
of Currency Trust Shares for exchange listing and trading. See, 
e.g., Securities Exchange Act Release No. 52843 (November 28, 2005), 
70 FR 72486 (December 5, 2005) (SR-NYSE 2005-65) (order granting 
accelerated approval for NYSE to list and trade shares of the 
CurrencyShares Euro Trust); Securities Exchange Act Release No. 
54020 (June 20, 2006), 71 FR 36579 (June 27, 2006) (SR-NYSE-2006-35) 
(order granting accelerated approval for NYSE to list and trade 
shares of the CurrencyShares Australian Dollar Trust, 
CurrencyShares\\ British Pound Sterling Trust, CurrencyShares 
Canadian Dollar Trust, CurrencyShares Mexican Peso Trust, 
CurrencyShares\\ Swedish Krona Trust and CurrencyShares\\ Swiss 
Franc Trust); Securities Exchange Act Release No. 55268 (February 9, 
2007), 72 FR 7793 (February 20, 2007) (SR-NYSE-2007-03) (order 
granting accelerated approval for NYSE to list and trade shares of 
the CurrencyShares Japanese Yen Trust); and Securities Exchange Act 
Release No. 56131 (July 25, 2007), 72 FR 42212 (August 1, 2007) (SR-
NYSEArca-2007-57) (order granting accelerated approval for listing 
on NYSE Arca of CurrencyShares Trusts).
    \16\ The Exchange notes that the proposed 100,000 share minimum 
is the same as the requirement in NYSE Arca Equities Rule 
5.2(j)(3)(d) applicable to Investment Company Units (``Units''), 
which provides that a minimum of 100,000 shares of a series of Units 
is required to be outstanding at commencement of trading. In 
addition, the 100,000 share minimum is comparable to requirements 
previously applied to series of Units approved by the Commission for 
exchange listing pursuant to Section 19(b)(2) of the Act. See, e.g., 
Securities Exchange Act Release No. 52816 (November 21, 2005), 70 FR 
71574, 71578 n.19 and accompanying text (November 29, 2005) (SR-
NYSE-2005-70).
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    Proposed Commentary .05 to NYSE Arca Equities Rule 8.202 provides 
certain ``firewall'' requirements where the value of a Currency Trust 
Share is based in whole or in part on an index that is maintained by a 
broker-dealer, as well as requirements on any advisory committee, 
supervisory board or similar entity that advises or that makes certain 
decisions regarding the index, similar to the requirements currently 
specified in NYSE Arca Equities Rule 5.2(j)(3), Commentary .01(b)(1).
    Commentary .06 provides that Currency Trust Shares will be subject 
to the Exchange's equity trading rules. Commentary .07 provides that, 
if the

[[Page 28312]]

Indicative Trust Value, or the value of the currency, currencies or 
currency index applicable to a series of Currency Trust Shares is not 
being disseminated as required, the Exchange may halt trading during 
the day on which such interruption first occurs. If such interruption 
persists past the trading day in which it occurred, the Exchange will 
halt trading no later than the beginning of the trading day following 
the interruption. If the Exchange becomes aware that the net asset 
value applicable to a series of Currency Trust Shares is not being 
disseminated to all market participants at the same time, it will halt 
trading in such series until such time as the net asset value is 
available to all market participants.
    Proposed NYSE Arca Equities Rule 8.202(j) provides that the 
Exchange may submit a rule filing pursuant to Section 19(b)(2) of the 
Act \17\ to permit the listing and trading of Currency Trust Shares 
that do not otherwise meet the standards set forth in proposed 
Commentary .04 to NYSE Arca Equities Rule 8.202.
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    \17\ 17 U.S.C. 78s(b)(2).
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Exchange Rules Applicable to Currency Trust Shares
    Currency Trust Shares will be subject to all Exchange rules 
governing the trading of equity securities. The Exchange's equity 
margin rules will apply to transactions in Currency Trust Shares. 
Currency Trust Shares will trade during trading hours set forth in Rule 
7.34(a).\18\
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    \18\ Pursuant to NYSE Arca Rule 7.34(a), the NYSE Arca 
Marketplace will have three trading sessions each day the 
Corporation is open for business unless otherwise determined by the 
Corporation:
     Opening Session--begins at 1:00:00 a.m. (Pacific Time) and 
concludes at the commencement of the Core Trading Session. The 
Opening Auction and the Market Order Auction shall occur during the 
Opening Session.
    Core Trading Session--begins for each security at 6:30:00 a.m. 
(Pacific Time) or at the conclusion of the Market Order Auction, 
whichever comes later, and concludes at 1:00:00 p.m. (Pacific Time).
     Late Trading Session--begins following the conclusion of the 
Core Trading Session and concludes at 5:00:00 p.m. (Pacific Time).
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Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products, including Currency Trust 
Shares, to monitor trading in the securities. The Exchange represents 
that these procedures are adequate to properly monitor Exchange trading 
of the securities in all trading sessions and to deter and detect 
violations of Exchange rules or applicable Federal securities laws.
    The Exchange's current trading surveillance focuses on detecting 
when securities trade outside their normal patterns. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The components underlying Currency Trust Shares are based on spot 
prices of the relevant currency, and such underlying currencies are 
traded in over-the-counter markets rather than on exchanges.
    The Exchange may obtain information via the Intermarket 
Surveillance Group (``ISG'') from other exchanges who are members of 
the ISG.\19\
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    \19\ For a list of current members of the ISG, see http://www.isgportal.org.
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    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading an issue of Currency Trust Shares, 
including risks inherent with trading such securities during the 
Opening and Late Trading Sessions and suitability recommendation 
requirements.
    Specifically, the Information Bulletin will discuss the following: 
(1) The procedures for purchases and redemptions of Currency Trust 
Shares; (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due 
diligence on ETP Holders to learn the essential facts relating to every 
customer prior to trading an issue of Currency Trust Shares; (3) how 
information regarding the Indicative Trust Value is disseminated; (4) 
the risks involved in trading an issue of Currency Trust Shares during 
the Opening and Late Trading Sessions when an updated Indicative Trust 
Value will not be calculated or publicly disseminated; (5) the 
requirement that ETP Holders deliver a prospectus to investors 
purchasing newly issued Currency Trust Shares prior to or concurrently 
with the confirmation of a transaction; and (6) trading information. 
For example, the Information Bulletin will advise ETP Holders, prior to 
the commencement of trading, of the prospectus delivery requirements 
applicable to the relevant issue of Currency Trust Shares. The Exchange 
notes that investors purchasing Currency Trust Shares directly from the 
applicable trust will receive a prospectus. ETP Holders purchasing 
Currency Trust Shares from the trust for resale to investors will 
deliver a prospectus to such investors.
    In addition, the Information Bulletin will reference that an issue 
of Currency Trust Shares is subject to various fees and expenses 
described in the applicable prospectus. The Information Bulletin will 
also reference the fact that there is no regulated source of last sale 
information regarding non-U.S. currencies, and that the Commission has 
no jurisdiction over the trading of currencies or futures contracts on 
which the value of an issue of Currency Trust Shares may be based.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \20\ of 
the Act in general and furthers the objectives of Section 6(b)(5) \21\ 
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 regulating, clearing, settling, processing 
information with respect to, and facilitating transaction in 
securities, and, in general, to protect investors and the public 
interest. The Exchange believes that the proposed rules applicable to 
trading pursuant to generic listing and trading criteria, together with 
the Exchange's surveillance procedures applicable to trading in the 
securities covered by the proposed rules serve to foster investor 
protection. The proposed rules will also enhance market competition by 
assisting in bringing Currency Trust Shares to market more quickly, 
consistent with the Commission's adoption of Rule 19b-4(e) \22\ under 
the Act.
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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(5).
    \22\ 17 CFR 240.19b-4(e).
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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.

[[Page 28313]]

III. 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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#f381869f96de909c9e9e969d8780b3809690dd949c85"><span class="__cf_email__" data-cfemail="ccbeb9a0a9e1afa3a1a1a9a2b8bf8cbfa9afe2aba3ba">[email protected]</span></a>. Please include 
File Number SR-NYSEArca-2009-47 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2009-47. 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 the filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2009-47 and should 
be submitted on or before July 6, 2009.

IV. Commissions Findings and Order Granting Accelerated Approval of the 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\23\ In particular, the Commission finds that the proposed 
rule change is consistent with the requirements of Section 6(b)(5) of 
the Act,\24\ which requires, among other things, that the Exchange's 
rules be designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and national market 
system, and, in general, to protect investors and the public interest.
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    \23\ In approving the proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \24\ 15 U.S.C. 78f(b)(5).
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A. Generic Listing Standards for Currency Trust Shares

    To list and trade Currency Trust Shares, the Exchange currently 
must file a proposed rule change with the Commission pursuant to 
Section 19(b)(1) of the Act \25\ and Rule 19b-4 thereunder.\26\ Rule 
19b-4(e) provides that the listing and trading of a new derivative 
securities product by an SRO will not be deemed a proposed rule change 
pursuant to Rule 19b-4(c)(1) if the Commission has approved, pursuant 
to Section 19(b) of the Act, the SRO's trading rules, procedures, and 
listing standards for the product class that would include the new 
derivative securities product, and the SRO has a surveillance program 
for the product class. The Exchange proposes to adopt certain 
provisions that would permit it to list and trade Currency Trust Shares 
pursuant to Rule 19b-4(e).
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    \25\ 15 U.S.C. 78s(b)(1).
    \26\ 17 CFR 240.19b-4. See Commentary .04 to NYSE Arca Equities 
Rule 8.202 (providing that NYSE Arca Equities must file separate 
proposals under Section 19(b) of the Act before trading, either by 
listing or pursuant to unlisted trading privileges, Currency Trust 
Shares).
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    The Commission notes that it has previously approved the adoption 
of generic listing standards for various classes of new derivative 
securities products, including currency-related derivative securities 
products, to be listed and traded pursuant to Rule 19b-4(e).\27\ In 
addition, the Commission notes that it has approved multiple series of 
Currency Trust Shares for listing and trading on the Exchange.\28\ In 
approving these securities for Exchange trading, the Commission 
considered the applicable Exchange rules that govern their trading. The 
Commission believes that proposed generic listing standards for 
Currency Trust Shares should fulfill the intended objective of Rule 
19b-4(e) and allow securities that satisfy the proposed generic listing 
standards to commence trading without the need for public comment and 
Commission approval.\29\ The Exchange's ability to rely on Rule 19b-
4(e) to list and trade Currency Trust Shares that meet the applicable 
requirements and minimum standards should reduce the time frame for 
bringing these securities to market and thereby reduce the burdens on 
issuers and other market participants, while also promoting competition 
and making such securities available to investors more quickly.
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    \27\ See, e.g., Securities Exchange Act Release No. 56637 
(October 10, 2007), 72 FR 58704 (October 16, 2007) (SR-NYSEArca-
2007-92) (approving, among other things, generic listing and trading 
rules for Currency-Linked Securities). See also, e.g., Securities 
Exchange Act Release Nos. 44551 (July 12, 2001), 66 FR 37716 (July 
19, 2001) (SR-PCX-2001-14) (approving, among other things, generic 
listing standards for Units); 55621 (April 12, 2007), 72 FR 19571 
(April 18, 2007) (SR-NYSEArca-2006-86) (approving, among other 
things, generic listing standards for Units based on foreign equity 
securities); 55783 (May 17, 2007), 72 FR 29194 (May 24, 2007) (SR-
NYSEArca-2007-36) (approving generic listing standards for Units 
based on fixed income indexes); 52204 (August 3, 2005), 70 FR 46559 
(August 10, 2005) (SR-PCX-2005-63) (approving generic listing 
standards for Index-Linked Securities); and 57701 (April 23, 2008), 
73 FR 23281 (April 29, 2008) (SR-NYSEArca-2008-20) (approving 
generic listing rules for Fixed Income Index-Linked Securities, 
Futures-Linked Securities, and Multifactor Index-Linked Securities).
    \28\ See supra note 15 (indicating prior Commission orders 
approving the listing and trading of Currency Trust Shares).
    \29\ The Commission notes that the failure of a particular 
product or index to comply with the proposed generic listing 
standards under Rule 19b-4(e), however, would not preclude the 
Exchange from submitting a separate filing pursuant to Section 
19(b)(1) of the Act, requesting Commission approval to list and 
trade a particular series of Currency Trust Shares. See proposed 
NYSE Arca Equities Rule 8.202(j) (providing that NYSE Arca Equities 
may submit a proposed rule change pursuant to Section 19(b) of the 
Act to permit the listing and trading of Currency Trust Shares that 
do not otherwise meet the generic listing standards set forth in the 
relevant rules).
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B. Listing and Trading Currency Trust Shares

    Taken together, the Commission finds that the proposal contains 
adequate rules and procedures to govern the listing and trading of 
Currency Trust Shares pursuant to Rule 19b-4(e) on the Exchange. 
Products listed and traded under the proposed generic standards will be 
subject to the full panoply of NYSE Arca Equities rules and procedures, 
including the equity rules relating to margin, that currently govern 
the trading of equity securities on the Exchange.

[[Page 28314]]

    Each of the proposed modifications to the listing requirements 
under NYSE Arca Equities Rule 8.202 provide the following:
    <bullet> For the Exchange to approve each applicable issue for 
listing, each such issue must satisfy all of the criteria set forth in 
the relevant rule,\30\ and, for those issues approved for trading 
pursuant to UTP, each such issue must satisfy the requirements relating 
to the dissemination of the underlying asset and/or index values and 
the Indicative Trust Values and the implementation of written 
surveillance procedures applicable to Currency Trust Shares;
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    \30\ The Commission notes that each issue of Currency Trust 
Shares to be traded on the Exchange, whether by listing or pursuant 
to UTP, must satisfy not only those requirements proposed to be 
adopted herein, but also all of the other existing applicable 
requirements in the respective rules for Currency Trust Shares.
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    <bullet> The Exchange may submit a proposed rule change to permit 
the listing and trading of Currency Trust Shares that do not otherwise 
meet the proposed generic listing standards set forth in Commentary .04 
to NYSE Arca Rule 8.202; \31\
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    \31\ See supra note 29.
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    <bullet> A minimum of 100,000 Currency Trust Shares is required to 
be outstanding at the commencement of trading;
    <bullet> The values of the underlying non-U.S. currency, 
currencies, or currency index, as the case may be, must be disseminated 
by one or more major market data vendors on at least a 15-second 
delayed basis;
    <bullet> The Indicative Trust Value must be calculated and widely 
disseminated by NYSE Arca Equities or one or more major market data 
vendors on at least a 15-second basis during the Core Trading Session;
    <bullet> The Exchange must implement written surveillance 
procedures applicable to Currency Trust Shares; and
    <bullet> Currency Trust Shares will be subject to the Exchange's 
equity trading rules; and
    <bullet> If the Indicative Trust Value or the values of the 
underlying non-U.S. currency, currencies, or currency index, as the 
case may be, is not being disseminated as required, the Exchange may 
halt trading during the day on which such interruption first occurs. If 
such interruption persists past the trading day in which it occurred, 
the Exchange will halt trading no later than the beginning of the 
trading day following the interruption. In addition, if the Exchange 
becomes aware that the net asset value applicable to a series of 
Currency Trust Shares is not being disseminated to all market 
participants at the same time, it will halt trading in such series 
until such time as the net asset value is available to all market 
participants.

In addition, the Commission notes that the proposed ``firewall'' 
provisions in Commentary .05 to NYSE Arca Equities Rules 8.202 are 
virtually identical to the ``firewall'' restrictions applicable to all 
types of Index-Linked Securities, including Currency-Linked 
Securities.\32\
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    \32\ See NYSE Arca Equities Rule 5.2(j)(6)(C) (setting forth 
similar firewall restrictions with respect to all types of Index-
Linked Securities); see also Commentary .01(b)(1) to NYSE Arca 
Equities Rule 5.2(j)(3) (setting forth similar firewall restrictions 
with respect to Units).
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    To clarify the definition of Currency Trust Shares under NYSE Arca 
Equities Rule 8.202(c), with respect to the procedures for surrendering 
or redeeming Currency Trust Shares, the proposal provides that such 
Currency Trust Shares may be surrendered or redeemed, when aggregated 
in some specified minimum number, to the trust only by, or at the 
request of, an Authorized Participant, as such term is defined in the 
relevant trust prospectus. The proposal also seeks to modify the 
definition of Currency Trust Shares and other provisions under NYSE 
Arca Equities Rule 8.202 such that the underlying asset thereof may be 
represented by more than one non-U.S. currency deposited with the 
trust.
    The Commission believes that the proposal is designed to maintain 
fair and orderly markets for the listing and trading of Currency Trust 
Shares. The proposed generic listing standards seek to ensure a minimum 
level of transparency with respect key values of the underlying 
currency assets, establish events that would trigger a trading halt in 
Currency Trust Shares when the availability of such key information 
related to Currency Trust Shares becomes impaired, and prevent 
conflicts of interest and the use and dissemination of material, non-
public information with respect to the personnel responsible for the 
maintenance of an underlying index maintained by a broker-dealer. The 
Commission notes that all of the existing continued listing standards 
applicable to Currency Trust Shares, requirements relating to 
information barriers and accounts with respect to ETP Holders acting as 
registered Market Makers or Market Maker Authorized Traders in Currency 
Trust Shares, and prospectus delivery requirements continue to apply to 
Currency Trust Shares. The Commission further notes that the Exchange 
has a general policy prohibiting the distribution of material, non-
public information by its employees.

C. Surveillance

    Proposed Commentary .04(d) to NYSE Arca Equities Rule 8.202 
provides that NYSE Arca Equities will implement written surveillance 
procedures applicable to Currency Trust Shares. The Commission notes 
that Currency Trust Shares would be subject to the Exchange's existing 
surveillance procedures applicable to derivative products, including 
Currency Trust Shares. The Exchange has represented that its 
surveillance procedures are adequate to properly monitor the trading of 
Currency Trust Shares in all trading sessions and to deter and detect 
violations of Exchange rules or applicable federal securities laws.
    The Exchange states that, with respect to Currency Trust Shares 
based on spot prices of a currency or currencies, such underlying 
currencies are traded in OTC markets rather than on exchanges. The 
Commission notes that information relating the trading of such assets 
in the OTC markets may not be readily available.

D. Information Bulletin

    The Exchange has represented that, prior to the commencement of 
trading in Currency Shares, it will inform its ETP Holders in an 
Information Bulletin describing the special characteristics and risks 
associated with trading an issue of Currency Trust Shares. 
Specifically, the Information Bulletin will discuss the following: (1) 
The procedures for purchases and redemptions of Currency Trust Shares; 
(2) suitability requirements; (3) how information regarding the 
Indicative Trust Value is disseminated; (4) the risks involved in 
trading an issue of Currency Trust Shares during the Opening and Late 
Trading Sessions when an updated Indicative Trust Value will not be 
calculated or publicly disseminated; (5) the requirement that ETP 
Holders deliver a prospectus to investors purchasing newly issued 
Currency Trust Shares prior to or concurrently with the confirmation of 
a transaction; and (6) trading information.
    The Information Bulletin will also advise ETP Holders, prior to the 
commencement of trading, of the prospectus delivery requirements 
applicable to the relevant issue of Currency Trust Shares. The Exchange 
notes that investors purchasing Currency Trust Shares directly from the 
applicable trust will receive a prospectus; ETP Holders purchasing 
Currency Trust Shares from the trust for resale to investors will 
deliver a

[[Page 28315]]

prospectus to such investors. Finally, the Information Bulletin will 
reference that: An issue of Currency Trust Shares is subject to various 
fees and expenses described in the applicable prospectus; that there is 
no regulated source of last-sale information regarding non-U.S. 
currencies; and the Commission has no jurisdiction over the trading of 
physical currencies on which the value of an issue of Currency Trust 
Shares may be based.

E. Firewall Procedures

    Currency Trust Shares, which are securities issued by a trust that 
may hold multiple currencies, will be subject to the firewall 
requirements under proposed Commentary .05 to NYSE Arca Equities Rule 
8.202. The firewall requirements provide that, if the value of a 
Currency Trust Share is based in whole or in part on an index that is 
maintained by a broker-dealer, the broker-dealer shall erect a 
``firewall'' around the personnel responsible for the maintenance of 
the underlying index or who have access to information concerning 
changes and adjustments to the index, and the index shall be calculated 
by a third party who is not a broker-dealer. Furthermore, any advisory 
committee, supervisory board, or similar entity that advises an index 
licensor or administrator or that makes decisions regarding the index 
or portfolio composition, methodology, and related matters must 
implement and maintain, or be subject to, procedures designed to 
prevent the use and dissemination of material, non-public information 
regarding the applicable index or portfolio.
    The Commission believes that the proposed ``firewall'' restrictions 
applicable to Currency Trust Shares are designed to prevent the use and 
dissemination of material, non-public information regarding an 
underlying index and prevent conflicts of interest with respect to 
personnel of a broker-dealer maintaining an index underlying such 
securities. The Commission notes that such proposed restrictions are 
substantially similar to restrictions adopted for the listing and 
trading of Index-Linked Securities and Units.\33\
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    \33\ See id. and accompanying text.
---------------------------------------------------------------------------

F. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\34\ for approving the proposed rule change prior to the 30th 
day after publication of notice in the Federal Register. The Commission 
notes that the Exchange previously filed a proposed rule change 
(NYSEArca-2008-51) seeking to adopt generic listing standards for 
Currency Trust Shares and other commodity-related derivative securities 
products.\35\ Notice of the proposed rule change was published in the 
Federal Register on August 15, 2008 for a 21-day comment period, and no 
comments were received by the Commission.\36\ The Commission further 
notes that the proposed changes to NYSE Arca Equities Rule 8.202 in 
NYSEArca-2008-51 are substantively identical to this proposed rule 
change. The Commission believes that the Exchange's proposed amendments 
to NYSE Arca Equities Rule 8.202 do not raise any new issues or 
significant regulatory concerns. The Commission believes that 
accelerating approval of this proposal should benefit investors by 
creating, without undue delay, enhanced competition in the market for 
Currency Trust Shares, consistent with Section 6(b) of the Act and Rule 
19b-4(e) thereunder.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78s(b)(2).
    \35\ See supra note 7.
    \36\ See id. (noting that the Exchange subsequently withdrew the 
proposed rule change on May 18, 2009).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\37\ that the proposed rule change (SR-NYSEArca-2009-47) be, and it 
hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\38\
---------------------------------------------------------------------------

    \38\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13970 Filed 6-12-09; 8:45 am]
BILLING CODE 8010-01-P


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