Document ID: SEC-2008-0624-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-04-29T04:00Z

[Federal Register: April 29, 2008 (Volume 73, Number 83)]
[Notices]               
[Page 23291-23292]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ap08-117]                         

[[Page 23291]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57700; File No. SR-NYSEArca-2008-42]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change, as Modified by 
Amendment No. 1 Thereto, To List and Trade Shares of Three Exchange-
Traded Funds of the NETS Trust

April 23, 2008.
    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 April 15, 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'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the Exchange. 
On April 22, 2008, NYSE Arca submitted Amendment No. 1 to the proposed 
rule change. NYSE Arca filed the proposal pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which 
renders the proposal effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Arca proposes to list and trade shares (``Shares'') of the 
following funds of the NETS Trust (``Trust''): NETS BEL 20 Index Fund 
(Belgium), NETS AEX-index Fund (The Netherlands) and NETS PSI 20 Index 
Fund (Portugal). 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 Exchange 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 these 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 aspects 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 proposes to list and trade the Shares of the following 
funds under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing 
standards for Investment Company Units (``ICUs''):\5\ NETS BEL 20 Index 
Fund (Belgium), NETS AEX-index Fund (The Netherlands) and NETS PSI 20 
Index Fund (Portugal) (each a ``Fund,'' and collectively, the 
``Funds'').
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    \5\ 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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    Each Fund is an ``index fund'' that seeks investment results that 
correspond generally to the price and yield performance, before fees 
and expenses, of a particular index (its ``Underlying Index'' or 
``Index''). The NETS \TM\ BEL 20[reg] Index Fund (Belgium) seeks to 
provide investment results that correspond generally to the price and 
yield performance, before fees and expenses, of publicly traded 
securities listed on Euronext Brussels, as represented by the BEL 20. 
The NETS \TM\ AEX-index[reg] Fund (The Netherlands) seeks to provide 
investment results that correspond generally to the price and yield 
performance, before fees and expenses, of publicly-traded securities in 
the aggregate in the Dutch market, as represented by the AEX-index. The 
NETS \TM\ PSI 20[reg] Index Fund (Portugal) seeks to provide investment 
results that correspond generally to the price and yield performance, 
before fees and expenses, of publicly-traded securities in the 
aggregate in the Portuguese market, as represented by the PSI 20[reg].
    The Exchange submits this proposed rule change because the 
Underlying Index for each Fund does not meet all of the ``generic'' 
listing requirements of Commentary .01(a)(B) to NYSE Arca Equities Rule 
5.2(j)(3) applicable to listing of ICUs based on international or 
global indexes or portfolios. The Underlying Indexes meet all such 
requirements except for those set forth in Commentary .01(a)(B)(3).\6\ 
The Exchange represents that: (1) Except for Commentary .01(a)(B)(3) to 
NYSE Arca Equities Rule 5.2(j)(3), the Shares of the Funds 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 ICUs shall apply 
to the Shares; and (3) the Trust is required to comply with Rule 10A-3 
under the Act \7\ 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 ICUs including, but not limited 
to, requirements relating to the dissemination of key information such 
as the Index value and Intraday Indicative Value, the rules governing 
the trading of equity securities, trading hours, trading halts, 
surveillance, and the Information Bulletin to ETP Holders, as set forth 
in prior Commission orders approving the generic listing rules 
applicable to the listing and trading of ICUs.\8\
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    \6\ Specifically, each of the Underlying Indexes fails to meet 
the requirement that the five most heavily weighted component stocks 
shall not exceed 60% of the weight of the Index. As of March 7, 
2008, the five most heavily weighted component stocks represented 
62.1%, 60.4% and 62.9% of the Index weight for each of the BEL 20, 
AEX-index, and PSI 20, respectively.
    \7\ 17 CFR 240.10A-3.
    \8\ See, e.g., Securities Exchange Act Release Nos. 55621 (April 
12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86) (order 
approving generic listing standards for ICUs based on international 
or global indexes); 44551 (July 12, 2001), 66 FR 37716 (July 19, 
2001) (SR-PCX-2001-14) (order approving generic listing standards 
for ICUs and Portfolio Depositary Receipts); and 41983 (October 6, 
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order 
approving rules for listing and trading of ICUs). E-mail from 
Michael Cavalier, Associate General Counsel, NYSE Euronext, to 
Edward Cho, Special Counsel, Division of Trading and Markets, 
Commission, dated April 23, 2008.
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    Detailed descriptions of the Funds, the Underlying Indexes, 
procedures for creating and redeeming Shares, transaction fees and 
expenses, dividends, distributions, taxes, and reports to be 
distributed to beneficial owners of the Shares can be found in the 
Trust's Registration Statement \9\ or on the Web site for the Funds 
(http://www.netsetfs.com), as applicable.
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    \9\ See the Trust's Registration Statement on Form N-1A, dated 
February 13, 2008 (File Nos. 333-147077 and 811-22140).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Section 6(b)(5)

[[Page 23292]]

of the Act,\11\ 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 mechanism 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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    \10\ 15 U.S.C. 78f(b).
    \11\ 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

    The Exchange states that written comments on the proposed rule 
change were neither solicited nor received.

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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) 
thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of 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. The Exchange has fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange requests that the Commission waive 
the 30-day operative delay so that the Exchange can list and trade the 
Shares immediately. The Exchange states that the proposed rule change 
does not significantly affect the protection of investors or the public 
interest and does not impose any significant burden on competition. The 
Exchange also believes that the proposal is non-controversial because, 
although each of the Underlying Indexes fails to meet the requirements 
set forth in Commentary .01(a)(B)(3) to NYSE Arca Equities Rule 
5.2(j)(3) by small amounts (2.1%, 0.4%, and 2.9%), the Shares currently 
satisfy all of the other applicable generic listing standards under 
NYSE Arca Equities Rule 5.2(j)(3), and will be subject to all of the 
continued listing standards under NYSE Arca Equities Rules 5.2(j)(3) 
and 5.5(g)(2) applicable to ICUs. Additionally, the Exchange represents 
that the Shares will comply with all other requirements applicable to 
ICUs.\14\
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    \14\ See supra note 8 and accompanying text.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\15\ Given that the Shares comply with all of the NYSE Arca 
Equities generic listing standards for ICUs (except for narrowly 
missing the requirement relating to the five highest weighted 
components of the respective Index), the listing and trading of the 
Shares by NYSE Arca does not appear to present any novel or significant 
regulatory issues or impose any significant burden on competition. For 
these reasons, the Commission designates the proposed rule change as 
operative upon filing.
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    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such 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.\16\
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    \16\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on April 22, 2008, the date on which the Exchange filed 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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-2008-42 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-42. 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-2008-42 and should 
be submitted on or before May 20, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-9321 Filed 4-28-08; 8:45 am]

BILLING CODE 8010-01-P