Document ID: SEC-2010-0476-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2010-03-31T04:00Z

[Federal Register: March 31, 2010 (Volume 75, Number 61)]
[Notices]               
[Page 16217-16219]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr10-147]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61775; File No. SR-NYSEArca-2010-17]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Regarding the 
Listing of the ProShares Ultra MSCI Mexico Investable Market Fund

March 24, 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 March 18, 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 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.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a et seq.
    \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, through its wholly-owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities''), proposes to list and trade 
shares (``Shares'') of the following fund of the ProShares Trust 
(``Trust''): ProShares Ultra MSCI Mexico Investable Market. 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 following 
fund under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing 
standards for Investment Company Units (``ICUs''): \4\ ProShares Ultra 
MSCI Mexico Investable Market (the ``Fund'').
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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 is an ``index fund'' that seeks to provide daily 
investment results that, before fees and expenses, correspond to twice 
(200%) of the daily performance of the MSCI Mexico Investable Market 
Index (``Index''). The Fund does not seek to achieve its stated 
objective over a period of time greater than one day.
    According to the Trust's Registration Statement,\5\ the Index 
measures the performance of the Mexican equity market. The Index is a 
capitalization-weighted index that aims to capture 99% of the publicly 
available total market capitalization. Component companies are adjusted 
for available float and must meet objective criteria for inclusion in 
the Index, taking into consideration unavailable strategic 
shareholdings and limitations to foreign ownership. As of February 26, 
2010, the Index was concentrated in the telecommunications services 
industry group, which comprised 35.84% of the market capitalization of 
the Index, and included companies with capitalizations between $124.10 
million and 44.68 billion. The average capitalization of the companies 
comprising the Index was approximately $5.84 billion.
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    \5\ See the Trust's Registration Statement on Form N-1A, dated 
February 26, 2010 (File Nos. 333-89822 and 811-21114) 
(``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)(B) to NYSE Arca Equities Rule 
5.2(j)(3) applicable to listing of ICUs based on international or

[[Page 16218]]

global indexes. The Index meets all such requirements except for those 
set forth in Commentary .01(a)(B)(3).\6\ The Exchange represents that 
(1) except for the requirement under Commentary .01(a)(B)(3) to NYSE 
Arca Equities Rule 5.2(j)(3) that the most heavily weighted component 
stock shall not exceed 25% of the weight of the Index, 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 
ICUs shall apply to the Shares; and (3) the Trust is required to comply 
with Rule 10A-3 \7\ under the Securities Exchange Act of 1934 (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 ICUs including, but not limited to, 
requirements relating to the dissemination of key information such as 
the Index value and Intraday Indicative Value, rules governing the 
trading of equity securities, trading hours, trading halts, 
surveillance,\8\ and Information Bulletin to ETP Holders, as set forth 
in Exchange rules for ICUs and in prior Commission orders approving the 
generic listing rules applicable to the listing and trading of ICUs.\9\
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    \6\ Specifically, the Index fails to meet the requirement that 
the most heavily weighted component stock shall not exceed 25% of 
the weight of the Index. As of February 26, 2010, the most heavily 
weighted component stock (America Movil S.A.B. de C.V.) represented 
27.50% of the Index weight.
    \7\ 17 CFR 240.10A-3.
    \8\ The Exchange may obtain information for surveillance 
purposes via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members of ISG. For a list of current members of 
ISG, see http://www.isgportal.org. However, the Exchange does not 
have in place a comprehensive surveillance agreement with the Bolsa 
Mexicana de Valores and such exchange is not an ISG member.
    \9\ 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); 41983 (October 6, 
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order 
approving rules for listing and trading of ICUs).
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    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 Trust's 
Registration Statement or on the Web site for the Fund (http://
www.proshares.com), as applicable.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \10\ of 
the Act, in general, and furthers the objectives of Section 
6(b)(5),\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 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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    \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

    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 filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, 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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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 satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. 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. In addition, the Exchange believes 
that it has developed adequate trading rules, procedures, surveillance 
programs, and listing standards for the continued listing and trading 
of the Shares.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
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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. 
The Commission notes that the Index fails to meet only one of the 
requirements set forth in Commentary .01(a)(B)(3) to NYSE Arca Equities 
Rule 5.2(j)(3) by only a small amount and that the Exchange has 
represented that the Shares of the Fund currently satisfy all of the 
other generic listing standards under NYSE Arca Equities Rule 5.2(j)(3) 
and all other requirements applicable to ICUs, as set forth in Exchange 
rules and prior Commission orders approving the generic listing rules 
applicable to the listing and trading of ICUs. Therefore, the 
Commission believes that the listing and trading of the Shares do not 
present any novel or significant issues or impose any significant 
burden on competition, and that waiving the 30-day operative delay will 
benefit the market and investors by providing market participants with 
additional investing choices. For these reasons, the Commission 
designates the proposed rule change as operative under upon filing.\18\
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    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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

[[Page 16219]]

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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2010-17 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.

All submissions should refer to File Number SR-NYSEArca-2010-17. 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-2010-17 and 
should be submitted on or before April 21, 2010.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7110 Filed 3-30-10; 8:45 am]
BILLING CODE 8011-01-P