Document ID: SEC-2009-1823-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change Relating to Listingand Trading Shares of the ETFS Platinum Trust
Posted Date: 2009-12-29T05:00Z

[Federal Register: December 29, 2009 (Volume 74, Number 248)]
[Notices]               
[Page 68886-68888]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de09-136]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61219; File No. SR-NYSEArca-2009-95]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of Proposed Rule Change Relating to Listing and Trading Shares 
of the ETFS Platinum Trust

December 22, 2009.

I. Introduction

    On October 20, 2009, NYSE Arca, Inc. (``NYSE Arca'' 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 list and trade shares (``Shares'') of the ETFS 
Platinum Trust (the ``Trust''). The proposed rule change was published 
for comment in the Federal Register on November 17, 2009.\3\ The 
Commission received no comments on the proposal. This order approves 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60970 (November 9, 
2009), 74 FR 59319 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to list and trade the Shares pursuant to NYSE 
Arca Equities Rule 8.201, which governs the listing and trading of 
Commodity-Based Trust Shares. The Exchange represents that the Shares 
satisfy the requirements of NYSE Arca Equities Rule 8.201 and thereby 
qualify for listing on the Exchange.
    The Shares represent units of fractional undivided beneficial 
interest in and ownership of the Trust. The investment objective of the 
Trust is for the Shares to reflect the performance of the price of 
platinum, less the expenses of the Trust's operations.\4\
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    \4\ Amendment No. 2 to the Registration Statement for the ETFS 
Platinum Trust on Form S-1, filed with the Commission on October 20, 
2009 (No. 333-15831) (``Registration Statement'').
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    The Exchange deems the Shares to be equity securities, which 
subjects trading in the Shares to the Exchange's existing rules 
governing the trading of equity securities, and has represented that 
trading in the Shares on the Exchange will occur in accordance with 
NYSE Arca Equities Rule 7.34(a). The Exchange has also represented that 
it has appropriate rules to facilitate transactions in the Shares 
during all trading sessions.
    Additional details regarding the Shares and Trust including, among

[[Page 68887]]

other things, creations and redemptions of the Shares, the organization 
and structure of the Trust, custody of the Trust's holdings, Trust 
expenses, Trust termination events, the international market for 
platinum, the platinum futures market, the dissemination and 
availability of information about the underlying assets, trading halts, 
applicable trading rules, surveillance, and the Information Bulletin 
can be found in the Notice and/or the Registration Statement.\5\
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    \5\ See supra notes 3 and 4.
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III. Discussion and Commission's Findings

    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.\6\ In particular, the Commission finds that the proposed rule 
change is consistent with the requirements of Section 6(b)(5) of the 
Act,\7\ 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 a national market 
system, and, in general, to protect investors and the public interest.
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    \6\ In approving this 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).
    \7\ 15 U.S.C. 78f(b)(5).
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    In addition, the Commission finds that the proposal to list and 
trade the Shares on the Exchange is consistent with Section 
11A(a)(1)(C)(iii) of the Act,\8\ which sets forth Congress' finding 
that it is in the public interest and appropriate for the protection of 
investors and the maintenance of fair and orderly markets to assure the 
availability to brokers, dealers and investors of information with 
respect to quotations for and transactions in securities. Quotation and 
last-sale information for the Shares will be available via the 
Consolidated Tape Association CQ High-Speed Lines. The Trust's Web site 
will provide the following information: (1) An intraday indicative 
value (``IIV'') per share for the Shares, updated at least every 15 
seconds, as calculated by the Exchange or a third party financial data 
provider, during the Exchange's Core Trading Session (9:30 AM to 4:00 
PM, Eastern Standard Time); (2) the net asset value (``NAV'') of the 
Trust as calculated each business day by the Sponsor; (3) the NAV, on a 
per Share basis, as of the close of the prior business day; (4) the 
mid-point of the bid-ask price \9\ at the close of trading in relation 
to such NAV (``Bid/Ask Price''); (5) a calculation of the premium or 
discount of such price against such NAV; (6) data in chart format 
displaying the frequency distribution of discounts and premiums of the 
Bid/Ask Price against the per Share NAV, within appropriate ranges, for 
each of the four previous calendar quarters; (7) the Creation Basket 
Deposit; (8) the Trust's prospectus; (9) the two most recent reports to 
stockholders; and (10) the last sale price of the Shares as traded in 
the US market.\10\ In addition, the Exchange will make available over 
the Consolidated Tape quotation information, trading volume, closing 
prices and NAV for the Shares from the previous day.
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    \8\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \9\ The bid-ask price of the Trust is determined using the 
highest bid and lowest offer on the Consolidated Tape as of the time 
of calculation of the closing day NAV.
    \10\ The Exchange will provide on its Web site (http://
www.nyx.com) a link to the Trust's Web site.
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    The Commission further believes that the proposal to list and trade 
the Shares is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Shares appropriately and 
to prevent trading when a reasonable degree of transparency cannot be 
assured.
    Under NYSE Arca Equities Rule 7.34(a)(5), if the Exchange becomes 
aware that the NAV is not being disseminated to all market participants 
at the same time, it must halt trading in on NYSE Arca Marketplace 
until such time as the NAV is available to all market participants. The 
Commission notes that the Exchange will obtain a representation from 
the Trust that the NAV per Share will be calculated daily and that the 
NAV will be made available to all market participants at the same 
time.\11\ Additionally, if the IIV \12\ is not being disseminated as 
required, the Exchange may halt trading during the day in which the 
disruption occurs; if the interruption persists past the day in which 
it occurred, the Exchange will halt trading no later than the beginning 
of the trading day following the interruption.\13\ Further, the 
Exchange will consider the suspension of trading in or removal from 
listing of the Shares pursuant to NYSE Arca Rule 8.201(e)(2) if: (1) 
the value of platinum is no longer calculated or available on at least 
a 15-second delayed basis from a source unaffiliated with the sponsor, 
Trust, custodian or the Exchange or the Exchange stops providing a 
hyperlink on its Web site to any such unaffiliated commodity value; or 
(2) the IIV is no longer made available on at least a 15-second delayed 
basis. With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading on the Exchange in the Shares may be 
halted because of market conditions or for reasons that, in the view of 
the Exchange, make trading in the Shares inadvisable. These may 
include: (1) the extent to which conditions in the underlying platinum 
market have caused disruptions and/or lack of trading, or (2) whether 
other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule.
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    \11\ See e-mail from Michael Cavalier, Chief Counsel, NYSE 
Euronext, to Christopher W. Chow, Special Counsel, and Andrew Madar, 
Special Counsel, Commission, dated December 10, 2009.
    \12\ For the Shares, the Exchange uses IIV and ITV 
interchangeably. See e-mail from Michael Cavalier, Chief Counsel, 
NYSE Euronext, to Christopher W. Chow, Special Counsel, Commission, 
dated December 22, 2009.
    \13\ See id.
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    In addition, NYSE Arca Equities Rule 8.201 sets forth certain 
requirements for ETP Holders acting as registered Market Makers in the 
Shares. Pursuant to NYSE Arca Equities Rule 8.201(h), an ETP Holder 
acting as a registered Market Maker in the Shares is required to 
provide the Exchange with information relating to its trading in 
platinum, related futures or options on futures, or any other related 
derivatives, which the Market Maker may have or over which it may 
exercise investment discretion. NYSE Arca Equities Rule 8.201(i) also 
prohibits an ETP Holder acting as a registered Market Maker in the 
Shares from using any material nonpublic information received from any 
person associated with an ETP Holder or employee of such person 
regarding trading by such person or employee in platinum, related 
futures or options on futures or any other related commodity 
derivatives.
    In support of this proposal, the Exchange has made representations, 
including:
    (1) The Shares will be subject to the initial and continued listing 
criteria under NYSE Arca Equities Rule 8.201.
    (2) The Exchange's surveillance procedures are adequate to properly 
monitor Exchange trading of the Shares

[[Page 68888]]

in all trading sessions and to deter and detect violations of Exchange 
rules and applicable federal securities laws. Pursuant to NYSE Arca 
Equities Rule 8.201(h), the Exchange is able to obtain information 
regarding trading in the Shares and the underlying platinum, platinum 
futures contracts, options on platinum futures, or any other platinum 
derivative, through ETP Holders acting as registered Market Makers, in 
connection with such ETP Holders' proprietary or customer trades which 
they effect on any relevant market. In addition, the Exchange may 
obtain trading information via the Intermarket Surveillance Group 
(``ISG'') from other exchanges who are members of the ISG.
    (3) 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 the Shares. 
Specifically, the Information Bulletin will discuss the following: (a) 
The procedures for purchases and redemptions of Shares in Baskets 
(including noting that Shares are not individually redeemable); (b) 
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence 
on its ETP Holders to learn the essential facts relating to every 
customer prior to trading the Shares; (c) how information regarding the 
IIV is disseminated; (d) the requirement that ETP Holders deliver a 
prospectus to investors purchasing newly issued Shares prior to or 
concurrently with the confirmation of a transaction; (e) the 
possibility that trading spreads and the resulting premium or discount 
on the Shares may widen as a result of reduced liquidity of platinum 
trading during the Core and Late Trading Sessions after the close of 
the major world platinum markets; and (f) trading information.
    This approval order is based on the Exchange's representations.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \14\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.
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    \14\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\15\ that the proposed rule change (SR-NYSEArca-2009-95), be, and 
it hereby is, approved.
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    \15\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30789 Filed 12-28-09; 8:45 am]

BILLING CODE 8011-01-P