Document ID: SEC-2010-1072-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2010-07-15T04:00Z

[Federal Register: July 15, 2010 (Volume 75, Number 135)]
[Notices]               
[Page 41252-41254]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jy10-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62471; File No. SR-NYSEArca-2010-64]

 
Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by NYSE Arca, Inc. Relating to Listing of the Wilshire Micro-Cap 
ETF

July 8, 2010.
    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 July 1, 2010, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade shares of the Wilshire 
Micro-Cap ETF under NYSE Arca Equities Rule 5.2(j)(3). The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://www.nyse.com.

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade the Shares of the Wilshire 
Micro-Cap ETF (the ``Fund'') under NYSE Arca Equities Rule 5.2(j)(3), 
the Exchange's listing standards for Investment Company Units 
(``Units'').\4\ The Fund is a series of the Claymore Exchange-Traded 
Fund Trust.
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    \4\ An Investment Company Unit is a security that represents an 
interest in a registered investment company that holds securities 
comprising, or otherwise based on or representing an interest in, an 
index or portfolio of securities (or holds securities in another 
registered investment company that holds securities comprising, or 
otherwise based on or representing an interest in, an index or 
portfolio of securities). See NYSE Arca Equities Rule 5.2(j)(3)(A).
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    The Fund seeks investment results that correspond generally to the 
performance, before the Fund's fees and expenses, of the Wilshire US 
Micro-Cap Index\SM\ (the ``Wilshire Micro-Cap'' or the ``Index'').\5\
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    \5\ See the Claymore Exchange-Traded Fund Trust's registration 
statement on Form N-1A, dated May 18, 2010 (File Nos. 333-134551; 
811-21906) (``Registration Statement''). Statements herein regarding 
the Fund, the Shares and the Wilshire US Micro-Cap Index are based 
on the Registration Statement.
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    The Exchange is submitting this proposed rule change because the 
Index for the Fund does not meet all of the ``generic'' listing 
requirements of Commentary .01(a)(A) to NYSE Arca Equities Rule 
5.2(j)(3) applicable to listing of ICUs based on US indexes. The Index 
meets all such requirements except for those set forth in Commentary 
.01(a)(A)(1) \6\ and

[[Page 41253]]

.01(a)(A)(5).\7\ Specifically, as of April 21, 2010, 76.93% of the 
weight of the Index components have a market capitalization greater 
than $75 million. In addition, as of April 21, 2010, the Index included 
201 non-NMS stocks out of a total of approximately 1,564 components in 
the Index. Thus, non-NMS stocks comprised approximately 12.8% of the 
number of stocks in the Index. Stocks comprising 97.3% of the weight of 
the Index were NMS stocks.\8\
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    \6\ Commentary .01(a)(A)(1) to NYSE Arca Equities Rule 5.2(j)(3) 
provides that component stocks (excluding Units and securities 
defined in Section 2 of Rule 8, collectively, ``Derivative 
Securities Products'') that in the aggregate account for at least 
90% of the weight of the index or portfolio (excluding such 
Derivative Securities Products) each shall have a minimum market 
value of at least $75 million.
    \7\ Commentary .01(a)(A)(5) to NYSE Arca Equities Rule 5.2(j)(3) 
provides that all securities in the index or portfolio shall be US 
Component Stocks listed on a national securities exchange and shall 
be NMS Stocks as defined in Rule 600 of Regulation NMS under the 
Securities Exchange Act of 1934 (17 U.S.C. 78a) (``Act''). NYSE Arca 
Equities Rule 5.2(j)(3) defines the term ``US Component Stock'' as 
an equity security that is registered under Sections 12(b) or 12(g) 
of the Act or an American Depositary Receipt, the underlying equity 
security of which is registered under Sections 12(b) or 12(g) of the 
Act.
    \8\ Non-NMS stocks are traded either on the OTC Bulletin Board 
or the Pink OTC Markets.
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    According to the Registration Statement, the Fund, using a low cost 
``passive'' or ``indexing'' investment approach, will seek to 
replicate, before the Fund's fees and expenses, the performance of the 
Wilshire Micro-Cap. The Wilshire Micro-Cap is a rules-based index 
comprised of approximately 1,564 securities of micro-capitalization 
companies as of March 31, 2010, as defined by Wilshire Associates 
Incorporated (``Wilshire'' or the ``Index Provider''). The Wilshire 
Micro-Cap is designed to represent micro-sized companies and is a 
subset of the Wilshire 5000 Total Market Index\SM\ (the ``Wilshire 
5000''). The Wilshire Micro-Cap represents a float-adjusted, market 
capitalization-weighted index of the issues ranked below 2500 by market 
capitalization of the Wilshire 5000.
    The Exchange represents that: (1) Except for Commentary 
.01(a)(A)(1) and .01(a)(A)(5) to NYSE Arca Equities Rule 5.2(j)(3), the 
Shares of the Fund currently satisfy all of the generic listing 
standards under NYSE Arca Equities Rule 5.2(j)(3); (2) the continued 
listing standards under NYSE Arca Equities Rules 5.2(j)(3) and 
5.5(g)(2) applicable to Units shall apply to the Shares; and (3) the 
Trust is required to comply with Rule 10A-3 \9\ under the Act for the 
initial and continued listing of the Shares. In addition, the Exchange 
represents that the Shares will comply with all other requirements 
applicable to Units including, but not limited to, requirements 
relating to the dissemination of key information such as the value of 
the Index and Intraday Indicative Value, rules governing the trading of 
equity securities, trading hours, trading halts, surveillance, and 
Information Bulletin to ETP Holders, as set forth in Exchange rules 
applicable to Units and prior Commission orders approving the generic 
listing rules applicable to the listing and trading of Units.\10\
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    \9\ 17 CFR 240.10A-3.
    \10\ See, e.g., Securities Exchange Act Release No. 44551 (July 
12, 2001), 66 FR 37716 (July 19, 2001) (SR-PCX-2001-14) (order 
approving generic listing standards for Units and Portfolio 
Depositary Receipts); Securities Exchange Act Release No. 41983 
(October 6, 1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) 
(order approving rules for listing and trading of Units).
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    The Exchange believes that, notwithstanding the fact that the Index 
does not meet certain generic listing criteria in NYSE Arca Equities 
Rule 5.2(j)(3), Commentary .01, the Index is sufficiently broad-based, 
and the Index stocks are sufficiently liquid to deter potential 
manipulation. As of June 9, 2010, the average market capitalization of 
Index stocks was $82.52 million, 62.82% of the Index weight was 
comprised of stocks with a global monthly trading volume of greater 
than one million shares, and 77.82% of the Index weight was comprised 
of stocks with a global monthly trading volume of greater than 500,000 
shares. The average global monthly trading volume for Index stocks for 
the period December 2009 through May 2010 ranged from 3.7 million to 
9.7 million shares. In addition, as of April 21, 2010, stocks 
comprising only 2.7% of the Index weight were non-NMS stocks.
    Detailed descriptions of the Fund, the Index, procedures for 
creating and redeeming Shares, transaction fees and expenses, 
dividends, distributions, taxes, risks, and reports to be distributed 
to beneficial owners of the Shares can be found in the Registration 
Statement or on the Web site for the Fund (http://www.claymore.com), as 
applicable.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \11\ of 
the Act, in general, and furthers the objectives of Section 
6(b)(5),\12\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanisms of a free and open 
market and a national market system. The Exchange believes that the 
proposed rule change will facilitate the listing and trading of an 
additional type of exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2010-64 on the subject line.

Paper Comments

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

[[Page 41254]]

All submissions should refer to File Number SR-NYSEArca-2010-64. 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 Web site 
viewing and printing 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 Number SR-
NYSEArca-2010-64 and should be submitted on or before August 5, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17192 Filed 7-14-10; 8:45 am]
BILLING CODE 8010-01-P