Document ID: SEC-2008-0773-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC et al.
Posted Date: 2008-06-04T04:00Z

[Federal Register: June 4, 2008 (Volume 73, Number 108)]
[Notices]               
[Page 31903-31905]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04jn08-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57881; File Nos. SR-Amex-2008-40; SR-NASDAQ-2008-046; 
SR-NYSE-2008-39; SR-NYSEArca-2008-50]

 
Self-Regulatory Organizations; American Stock Exchange LLC, The 
NASDAQ Stock Market LLC, New York Stock Exchange LLC, and NYSE Arca, 
Inc.; Notice of Filing of Proposed Rule Changes To Adopt a Trading Halt 
Rule in Connection With the Dissemination of Net Asset Value and 
Disclosed Portfolio for Certain Derivative Securities Products

May 29, 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 May 14, 2008, the American Stock Exchange LLC (``Amex''), The NASDAQ 
Stock Market LLC (``Nasdaq''), the New York Stock Exchange LLC 
(``NYSE''), and NYSE Arca, Inc. (``NYSE Arca'' and together with Amex, 
Nasdaq, and NYSE, collectively, the ``Exchanges''), through its wholly 
owned subsidiary, NYSE Arca Equities, Inc. (``NYSE Arca Equities''), 
each filed with the Securities and Exchange Commission (``Commission'') 
the proposed rule changes as described in Items I, II, and III below, 
which Items have been substantially prepared by the Exchanges. The 
Commission is publishing this notice to solicit comments on the 
proposed rule changes from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organizations' Statement of the Terms of Substance 
of the Proposed Rule Changes

    Each Exchange proposes to amend its respective rules to require a 
trading halt (``New Trading Halt Rule'') in certain derivative 
securities products when the respective Exchange becomes aware that the 
net asset value (``NAV'') and/or disclosed portfolio (``Disclosed 
Portfolio''),\3\ as applicable, for such derivative securities product 
is not being disseminated to all market participants at the same time. 
The texts of the proposed rule changes are available at the Exchanges, 
the Commission's Public Reference Room, and the Exchanges' respective 
Internet Web sites.\4\
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    \3\ ``Disclosed Portfolio'' is applicable only with respect to a 
series of Managed Fund Shares and is defined as the identities and 
quantities of the securities and other assets that: (1) Are held by 
a registered investment company organized as an open-end management 
investment company or similar entity that invests in a portfolio of 
securities selected by such investment company's investment adviser 
consistent such investment company's investment objectives and 
policies; and (2) form the basis for such investment company's 
calculation of NAV. See Amex Rule 1002B (setting forth the continued 
listing standards for Managed Fund Shares and requiring, among other 
things, that the Disclosed Portfolio be disseminated at least once 
daily and made available to all market participants at the same 
time) and NYSE Arca Equities Rule 8.600 (setting forth the listing 
standards for Managed Fund Shares and requiring, among other things, 
that the Disclosed Portfolio be disseminated at least once daily and 
made available to all market participants at the same time). As of 
the date hereof, only Amex and NYSE Arca Equities have listing rules 
for Managed Fund Shares. See infra note 5.
    \4\ See http://www.amex.com, http://www.nasdaq.com, and http://
www.nyse.com (for both NYSE and NYSE Arca).
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II. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In its filing with the Commission, each Exchange included 
statements concerning the purpose of, and basis for, its proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of the statements may be examined at the places 
specified in Item IV below. The Exchanges have prepared summaries, set 
forth in sections A, B, and C, below, of the most significant aspects 
of such statements.

[[Page 31904]]

A. Self-Regulatory Organizations' Statement for the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

1. Purpose
    Each Exchange proposes to amend its respective rules \5\ to require 
a trading halt in certain derivative securities products \6\ that are 
listed and trading on such Exchange, if such Exchange becomes aware 
that the NAV and/or Disclosed Portfolio, as applicable, for such 
derivative product is not being disseminated to all market participants 
at the same time. In addition, each Exchange would resume trading in 
such halted derivative securities product only when the NAV and/or 
Disclosed Portfolio, as applicable, is disseminated to all market 
participants.\7\ Each Exchange represents that, in the event the NAV 
and/or Disclosed Portfolio, as applicable, for a series of derivative 
securities product ceases to be disseminated altogether, such Exchange 
would halt trading in such derivative securities product.
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    \5\ For purposes of the proposed rule changes, Amex seeks to 
adopt new Amex Rule 117A and Commentary .01 thereto (Net Asset 
Value/Disclosed Portfolio Dissemination and Trading Halts); Nasdaq 
seeks to amend Nasdaq Rule 4120 (Trading Halts); NYSE seeks to amend 
NYSE Rule 123D (Openings and Halts in Trading); and NYSE Arca seeks 
to amend NYSE Arca Equities Rule 7.34 (Trading Sessions).
    \6\ Each Exchange seeks to apply its respective New Trading Halt 
Rule to certain derivative securities products for which: (1) Such 
Exchange has listing and trading standards; and (2) an NAV and, in 
the case of Managed Fund Shares, a Disclosed Portfolio, is 
disseminated. See proposed Amex Rule 117A (applying Amex's New 
Trading Halt Rule to Portfolio Depositary Receipts (Amex Rule 1000-
AEMI), Index Fund Shares (Amex Rule 1000A-AEMI), Trust Issued 
Receipts (Commentary .07 to Amex Rule 1202), Managed Fund Shares 
(Amex Rule 1000B), Commodity-Based Trust Shares (Amex Rule 1200A), 
Currency Trust Shares (Amex Rule 1200B), Paired Trust Shares (Amex 
Rule 1400), Partnership Units (Amex Rule 1500), and Trust Units 
(Amex Rule 1600)); proposed Nasdaq Rule 4120(a)(10) (applying 
Nasdaq's New Trading Halt Rule to Portfolio Depository Receipts 
(Nasdaq Rule 4420(i)), Index Fund Shares (Nasdaq Rule 4420(j)), 
Trust Issued Receipts (Nasdaq Rule 4420(l)), Commodity-Related 
Securities (as defined in Nasdaq Rule 4630), and securities 
representing interests in unit investment trusts or investment 
companies); proposed NYSE Rule 123D(5) (applying NYSE's New Trading 
Halt Rule to Investment Company Units (NYSE Rule 1100), Trust Issued 
Receipts (NYSE Rule 1200), Currency Trust Shares (NYSE Rule 1300A), 
and Commodity Trust Shares (NYSE Rule 1300B)); and proposed NYSE 
Arca Equities Rule 7.34(a)(5) (applying NYSE Arca's New Trading Halt 
Rule to Investment Company Units (NYSE Arca Equities Rule 
5.2(j)(3)), Portfolio Depositary Receipts (NYSE Arca Equities Rule 
8.100), Trust Issued Receipts (NYSE Arca Equities Rule 8.200), 
Commodity-Based Trust Shares (NYSE Arca Equities Rule 8.201), 
Currency Trust Shares (NYSE Arca Equities Rule 8.202), Commodity 
Index Trust Shares (NYSE Arca Equities Rule 8.203), Commodity 
Futures Trust Shares (NYSE Arca Equities Rule 8.204), Partnership 
Units (NYSE Arca Equities Rule 8.300), Paired Trust Shares (NYSE 
Arca Equities Rule 8.400), Trust Units (NYSE Arca Equities Rule 
8.500), and Managed Fund Shares (NYSE Arca Equities Rule 8.600)).
    Nasdaq seeks to apply its New Trading Halt Rule to proposed 
Managed Fund Shares through a separate proposed rule change. See 
Securities Exchange Release No. 57800 (May 8, 2008), 73 FR 27874 
(May 14, 2008) (SR-NASDAQ-2008-039) (proposing, among other things, 
to include Managed Fund Shares (new Nasdaq Rule 4420(o)) under the 
definition of ``Derivative Securities Product,'' for purposes of 
Nasdaq Rule 4120(b)(4)(A)) (``Nasdaq Proposal''). Nasdaq represents 
that it will file an amendment to its proposed rule change (File No. 
SR-Nasdaq-2008-046) upon the Commission's approval of the Nasdaq 
Proposal to modify its New Trading Halt Rule to account for the 
Disclosed Portfolio with respect to a series of Managed Fund Shares 
listed and traded on Nasdaq. E-mail from Sean Bennett, Assistant 
General Counsel, Nasdaq, to Edward Cho, Special Counsel, Division of 
Trading and Markets, Commission, dated May 19, 2008.
    \7\ Nasdaq's New Trading Halt Rule also provides that, in the 
case of a halted Derivative Securities Products (as defined in 
Nasdaq Rule 4120(b)(4)(A)) trading on Nasdaq pursuant to unlisted 
trading privileges, Nasdaq would resume trading in such Derivative 
Securities Product only until such time trading resumes in the 
listing market for such Derivative Securities Product. The Nasdaq 
Proposal also seeks to make technical, non-substantive changes to 
Nasdaq Rules 4120(a) and (c) to incorporate new Nasdaq Rule 
4120(a)(10).
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2. Statutory Basis
    The Exchanges believe that their respective proposed rule changes 
are consistent with the Act and the rules and regulations under the Act 
applicable to national securities exchanges and, in particular, the 
requirements of section 6(b) of the Act.\8\ Specifically, the Exchanges 
believe their respective proposed rule changes are consistent with the 
requirements of section 6(b)(5) of the Act,\9\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to prevent fraudulent and manipulative acts, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organizations' Statement on Burden on Competition

    The Exchanges believe that their respective proposed rule changes 
would impose no burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

 C. Self-Regulatory Organizations' Statement on Comments on the 
Proposed Rule Changes Received From Members, Participants, or Others

    The Exchanges have neither solicited nor received comments on their 
respective proposals.

III. Date of Effectiveness of the Proposed Rule Changes 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 Exchanges consent, the Commission will:
    A. By order approve such proposed rule changes, or
    B. Institute proceedings to determine whether the proposed rule 
changes 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 
changes are 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 Numbers SR-Amex-2008-40; SR-NASDAQ-2008-046; SR-NYSE-2008-39; and 
SR-NYSEArca-2008-50 in the subject line.

Paper comments

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

All submissions should refer to File Numbers SR-Amex-2008-40; SR-
NASDAQ-2008-046; SR-NYSE-2008-39; and SR-NYSEArca-2008-50. These file 
numbers 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 changes that are 
filed with the Commission, and all written

[[Page 31905]]

communications relating to the proposed rule changes 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 Section, 100 F Street, NE., Washington, DC 20549-1090 on 
business days between the hours of 10 a.m. and 3 p.m. Copies of such 
filings also will be available for inspection and copying at the 
respective principal offices of the Exchanges. 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 Numbers SR-Amex-2008-40; SR-NASDAQ-2008-046; SR-
NYSE-2008-39; and SR-NYSEArca-2008-50 and should be submitted on or 
before June 25, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-12395 Filed 6-3-08; 8:45 am]

BILLING CODE 8010-01-P