Document ID: SEC-2008-0258-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-02-15T05:00Z

[Federal Register: February 15, 2008 (Volume 73, Number 32)]
[Notices]               
[Page 8917-8921]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15fe08-118]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57294; File No. SR-NYSEArca-2007-78]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change to 
Trade Units of the United States Heating Oil Fund, LP and the United 
States Gasoline Fund, LP Pursuant to Unlisted Trading Privileges

February 8, 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 July 30, 2007, NYSE Arca, Inc. (``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. This order provides 
notice of the proposed rule change and approves the proposal on an 
accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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, proposes to trade pursuant to unlisted trading privileges 
(``UTP'') units (``Units'') of the United States Heating Oil Fund, LP 
(``USHO'') and the United States Gasoline Fund, LP (``USG'') (each, a 
``Partnership,'' and collectively ``Partnerships'') pursuant to NYSE 
Arca Equities Rule 8.300. The text of the proposed rule change is 
available on the Exchange's Web site at http://www.nyse.com, at the 

Exchange's principal office, and at the Commission's Public Reference 
Room.

[[Page 8918]]

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 III 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
    Under NYSE Arca Equities Rule 8.300, the Exchange may propose to 
list and/or trade pursuant to UTP ``Partnership Units.'' The Exchange 
proposes to trade the Units pursuant to UTP under NYSE Arca Equities 
Rule 8.300.
    Each Unit represents ownership of a fractional undivided beneficial 
interest in the net assets of each of USHO or USG. Each Partnership is 
a commodity pool that will issue Units that may be purchased and sold 
on the Exchange. The net assets of each of USHO and USG will consist of 
investments in futures contracts based on heating oil, gasoline, crude 
oil, and other petroleum-based fuels and natural gas that are traded on 
the New York Mercantile Exchange (``NYMEX''), Intercontinental Exchange 
(``ICE Futures'') or other U.S. and foreign exchanges (collectively, 
``Futures Contracts''). The Commission has approved the listing and 
trading of the Units on the American Stock Exchange LLC (``Amex'').\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 57188 (January 23, 
2008) (SR-Amex-2007-70) (approving Amex's proposal to list and trade 
the Units). See also Securities Exchange Act Release No. 57042 
(December 26, 2007), 73 FR 514 (January 3, 2008) (SR-Amex-2007-70) 
(providing notice of Amex's proposal to list and trade the Units) 
(``Amex Proposal'').
---------------------------------------------------------------------------

    Detailed information regarding the Partnerships; the investment 
strategies, objectives, and policies of the Partnerships; the 
petroleum-based fuels market; the structure, management, and regulation 
of the Partnerships; accountability levels and position limits; the 
Indicative Partnership Value (as defined herein); the manner in which 
the Units will be offered and sold; calculation methodologies; and 
arbitrage can be found in the Amex Proposal and in the respective 
Registration Statements regarding the offering of the Units filed with 
the Commission under the Securities Act of 1933.\4\
---------------------------------------------------------------------------

    \4\ See USHO's Registration Statement on Form S-1 filed on April 
19, 2007 (File No. 333-142211); USG's Registration Statement on Form 
S-1 filed on April 18, 2007 (File No. 333-142206).
---------------------------------------------------------------------------

Dissemination and Availability of Information About the Underlying 
Futures Contracts and the Units
    As set forth in the Amex Proposal, the daily settlement prices for 
the NYMEX-traded Futures Contracts are publicly available at http://www.nymex.com.
 Quote and last-sale information for the Futures 

Contracts are widely disseminated through a variety of market data 
vendors worldwide, including Bloomberg and Reuters. In addition, real-
time futures data is available by subscription from Reuters and 
Bloomberg. NYMEX also provides delayed futures information on current 
and past trading sessions and market news free of charge on its Web 
site. The specific contract specifications for the Futures Contracts 
are also available on the NYMEX Web site and the ICE Futures Web site 
at http://www.icefutures.com.

    Amex will disseminate through the facilities of the Consolidated 
Tape Association (``CTA'') an updated Indicative Partnership Value 
(``Indicative Partnership Value''), which will be disseminated on a 
per-Unit basis at least every 15 seconds during regular Amex trading 
hours of 9:30 a.m. to 4:15 p.m. Eastern Time (``ET''). In addition, 
shortly after 4 p.m. ET on each business day, the Administrator, Amex, 
and the General Partner will disseminate the Basket Amount \5\ for 
orders placed during that day, together with the net asset value 
(``NAV'') for the Units.\6\ The Indicative Partnership Value will be 
calculated based on the Treasuries and cash required for creations and 
redemptions (i.e., NAV per limit x 100,000) adjusted to reflect the 
price changes of the relevant Benchmark Futures Contract.
---------------------------------------------------------------------------

    \5\ See infra note 14.
    \6\ E-mail from Tim Malinowski, Director, NYSE Euronext, to 
Geoffrey Pemble, Special Counsel, Division of Trading and Markets, 
Commission, dated February 1, 2008 (``NYSE Arca Confirmation''). 
According to the Amex Proposal, Amex will obtain a representation 
from each Partnership that its NAV per Unit will be calculated daily 
and made available to all market participants at the same time. See 
Amex Proposal, supra note 3.
---------------------------------------------------------------------------

    The Indicative Partnership Value is based on open-outcry trading of 
the relevant Benchmark Futures Contract on the NYMEX. Open-outcry 
trading on the NYMEX closes at 2:30 p.m. ET while NYMEX's energy 
futures contracts are traded on the Chicago Mercantile Exchanges CME 
Globex[supreg] electronic trading platform on a 24-hour basis.\7\ After 
the close of trading on the NYNEX at 2:30 p.m. ET, the Indicative 
Partnership Value will reflect changes to the relevant Benchmark 
Futures Contract as provided for through CME Globex. The value of the 
relevant Benchmark Futures Contract will be available on a 15-second 
delayed basis during the time the Units trade on the Exchange.\8\
---------------------------------------------------------------------------

    \7\ CME Globex operates on a 24-hour basis each trading day.
    \8\ See NYSE Arca Confirmation, supra note 6.
---------------------------------------------------------------------------

    While the NYMEX is open for trading, the Indicative Partnership 
Value can be expected to closely approximate the value per Unit of the 
Basket Amount. However, during NYSE Arca Marketplace trading hours when 
the Futures Contracts have ceased trading, spreads and resulting 
premiums or discounts may widen and therefore increase the difference 
between the price of the Units and the NAV of the Units. The Indicative 
Partnership Value on a per-Unit basis disseminated from 9:30 a.m. to 
4:15 p.m. ET should not be viewed as a real-time update of the NAV, 
which is calculated only once a day.
    Quotations and last-sale information regarding the Units will be 
disseminated through the facilities of the CTA and the Consolidated 
Quote High Speed Lines.\9\ Amex intends to disseminate for each 
Partnership on a daily basis information with respect to the Indicative 
Partnership Value, recent NAV, Units outstanding, and the Basket 
Amount. Amex will also make available on its Web site the following 
information: (1) The prior business day's NAV and the reported closing 
price; (2) the mid-point of the bid-ask price in relation to the NAV as 
of the time the NAV is calculated (``Bid-Ask price''); \10\ (3) 
calculation of the premium or discount of such price against such NAV; 
(4) data in chart form displaying the frequency distribution of 
discounts and premiums of the Bid-Ask Price against the NAV, within 
appropriate ranges for each of the four previous calendar quarters; (5) 
the prospectus and the most recent periodic reports filed with the SEC 
or required by the CFTC for each of the Partnerships; (6) the daily 
trading volume and closing price of the Units;

[[Page 8919]]

and (7) other applicable quantitative information.
---------------------------------------------------------------------------

    \9\ See id.
    \10\ The Bid-Ask Price of Units is determined using the highest 
bid and lowest offer as of the time of calculation of the NAV.
---------------------------------------------------------------------------

    USHO's and USG's total portfolio composition will be disclosed, 
each business day that Amex is open for trading, on their respective 
Web sites at http://www.unitedstatesheatingoilfund.com and http://www.unitedstatesgasolinefund.com.
 USHO's Web site disclosure of 
 disclosure of 
applicable, the name and value of each Heating Oil Interest,\11\ the 
specific types and characteristics of such Heating Oil Interests, 
Treasuries,\12\ and the amount of cash and cash equivalents held in the 
portfolio of USHO. USG's Web site disclosure of portfolio holdings will 
be made available daily and will include, as applicable, the name and 
value of each Gasoline Interest,\13\ the specific types and 
characteristics of such Gasoline Interests, Treasuries, and the amount 
of cash and cash equivalents held in the portfolio of USG. The public 
Web site disclosure of the portfolio composition of each of USHO and 
USG will coincide with the disclosure by Brown Brothers Harriman & Co. 
(the ``Administrator'') of the NAV for the Units and the Basket Amount 
\14\ (for orders placed during the day) for each Partnership on each 
business day.
---------------------------------------------------------------------------

    \11\ Heating Oil Interests are defined as investments in Futures 
Contracts and other heating-oil-related investments, such as cash-
settled options on Futures Contracts, forward contracts for heating 
oil, and over-the-counter (``OTC'') contracts that are based on the 
price of heating oil, oil, and other petroleum-based fuels, Futures 
Contracts, and indices based on the foregoing. See Amex Proposal, 
supra note 3, 73 FR at 514.
    \12\ Treasuries are defined as short-term obligations of the 
United States of two years or less. See id.
    \13\ Gasoline Interests are defined as investments in Futures 
Contracts and other gasoline-related investments, such as cash-
settled options on Futures Contracts, forward contracts for 
gasoline, and OTC transactions that are based on the price of 
gasoline, oil, and other petroleum-based fuels, Futures Contracts, 
and indices based on the foregoing. See id.
    \14\ See id., 73 FR at 519 (defining Basket Amount as the amount 
of Treasuries and/or cash equal to the NAV per Unit times 100,000 
Units required for the purchase of a basket of Units).
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Units to be equity securities, thus 
rendering trading in the Units subject to its existing rules governing 
the trading of equity securities. The Exchange represents that the 
Units will trade on the NYSE Arca Marketplace from 4 a.m. to 8 p.m. ET. 
The Exchange represents that it has appropriate rules to facilitate 
transactions in the Units during all trading sessions.
    To facilitate surveillance, NYSE Arca Equities Rule 8.300(e) sets 
forth certain restrictions on ETP Holders acting as registered Market 
Makers in Units. NYSE Arca Equities Rule 8.300(e)(2)-(3) requires that 
an ETP Holder acting as a registered Market Maker in the Units provide 
the Exchange with necessary information relating to its trading in 
underlying assets or commodities, related futures or options on 
futures, or any other related derivatives. NYSE Arca Equities Rule 
8.300(e)(4) prohibits the ETP Holder acting as a registered Market 
Maker in the Units 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 the 
underlying asset or commodity, related futures or options on futures, 
or any other related derivative (including the Units). In addition, 
NYSE Arca Equities Rule 8.300(e)(1) prohibits the ETP Holder acting as 
a registered Market Maker in the Units from being affiliated with a 
market maker in the underlying asset or commodity, related futures or 
options on futures, or any other related derivative unless adequate 
information barriers are in place, as provided in NYSE Arca Equities 
Rule 7.26.
Trading Halts
    The Exchange may consider all relevant factors in exercising its 
discretion to halt or suspend trading in the Units. Trading may be 
halted because of market conditions or for reasons that, in the view of 
the Exchange, make trading in the Units inadvisable. These may include: 
(1) The extent to which trading is not occurring in the underlying 
Futures Contracts, or (2) whether other unusual conditions or 
circumstances detrimental to the maintenance of a fair and orderly 
market are present. In addition, trading in Units could be halted 
pursuant to the Exchange's ``circuit breaker'' rule \15\ or by the halt 
or suspension of trading of the underlying securities.
---------------------------------------------------------------------------

    \15\ See NYSE Arca Equities Rule 7.12.
---------------------------------------------------------------------------

    In addition, the Exchange represents that it will cease trading the 
Units of a Partnership if: (a) The listing market stops trading the 
Units because of a regulatory halt similar to a halt based on NYSE Arca 
Equities Rule 7.12; or (b) the listing market delists the Units. 
Additionally, the Exchange may cease trading the Units if such other 
event shall occur or condition exists which in the opinion of the 
Exchange makes further dealings on the Exchange inadvisable. UTP 
trading in the Units is also governed by the trading halts provisions 
of NYSE Arca Equities Rule 7.34 relating to temporary interruptions in 
the calculation or wide dissemination of an Indicative Partnership 
Value or the value of an underlying Benchmark Futures Contract.\16\
---------------------------------------------------------------------------

    \16\ NYSE Arca Equities Rule 7.34(a) literally addresses 
temporary interruptions in the calculation or wide dissemination of 
the Indicative Intra-Day Value and the value of an underlying index. 
The Units of each Partnership, however, do not have an underlying 
index, but have an underlying Benchmark Futures Contract. Therefore, 
the Exchange hereby represents that the provisions in NYSE Arca 
Equities Rule 7.34(a) that address interruptions in the calculation 
or wide dissemination of the value of an underlying index shall also 
apply to interruptions in the calculation or wide dissemination of 
the value of an underlying Benchmark Futures Contract.
---------------------------------------------------------------------------

Surveillance
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products to monitor trading in the 
Units. The Exchange represents that these procedures are adequate to 
properly monitor Exchange trading of the Units in all trading sessions 
and to deter and detect violations of Exchange rules.
    The Exchange's current trading surveillance focuses on detecting 
securities trading outside their normal patterns. When such situations 
are detected, surveillance analysis follows and investigations are 
opened, where appropriate, to review the behavior of all relevant 
parties for all relevant trading violations.
    The Exchange may obtain information via the Intermarket 
Surveillance Group (``ISG'') from other exchanges that are members or 
affiliates of the ISG.\17\ In addition, the Exchange has an Information 
Sharing Agreement in place with NYMEX and ICE Futures for the purpose 
of providing information in connection with trading in or related to 
futures contracts traded on NYMEX and ICE Futures, respectively. To the 
extent that a Partnership invests in Heating Oil Interests or Gasoline 
Interests traded on other exchanges, the Exchange will seek to enter 
into information sharing agreements with those particular exchanges.
---------------------------------------------------------------------------

    \17\ For a list of the current members and affiliate members of 
ISG, see http://www.isgportal.com.

---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin (``Bulletin'') of the special 
characteristics and risks associated with trading the Units. 
Specifically, the

[[Page 8920]]

Bulletin will discuss the following: (1) The risks involved in trading 
the Units during the Opening and Late Trading Sessions when an updated 
Indicative Partnership Value will not be calculated or publicly 
disseminated; (2) the procedures for purchases and redemptions of Units 
in Baskets (and that Units are not individually redeemable); (3) NYSE 
Arca Equities Rule 9.2(a); \18\ (4) how information regarding the 
Indicative Partnership Value is disseminated; (5) the requirement that 
ETP Holders deliver a prospectus to investors purchasing newly issued 
Units prior to or concurrently with the confirmation of a transaction; 
and (6) trading information.
---------------------------------------------------------------------------

    \18\ NYSE Arca Equities Rule 9.2(a) provides that an ETP Holder, 
before recommending a transaction, must have reasonable grounds to 
believe that the recommendation is suitable for the customer based 
on any facts disclosed by the customer as to his other security 
holdings and as to his financial situation and needs. Further, the 
rule provides, with a limited exception, that prior to the execution 
of a transaction recommended to a non-institutional customer the ETP 
Holder shall make reasonable efforts to obtain information 
concerning the customer's financial status, tax status, investment 
objectives, and any other information that it believes would be 
useful to make a recommendation. See Securities Exchange Act Release 
No. 54045 (June 26, 2006), 71 FR 37971 (July 3, 2006) (SR-PCX-2005-
115).
---------------------------------------------------------------------------

    In addition, the Bulletin will reference that each Partnership is 
subject to various fees and expenses; there is no regulated source of 
last-sale information regarding physical commodities; the Commission 
has no jurisdiction over the trading of heating oil, gasoline, crude 
oil, natural gas, or other petroleum-based fuels; and the CFTC has 
regulatory jurisdiction over the trading of heating oil-based and 
gasoline-based futures contracts and related options. The Bulletin will 
also discuss any exemptive, no-action, or interpretive relief granted 
by the Commission from any rules under the Act, and will disclose the 
trading hours of the Units of each Partnership and that the NAV for the 
Units will be calculated after 4 p.m. ET each trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\19\ in general, and furthers the 
objectives of section 6(b)(5),\20\ 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.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Exchange believes that the proposed rule change is 
consistent with Rule 12f-5 under the Act \21\ because it deems the 
Units to be equity securities, thus rendering the Units subject to the 
Exchange's rules governing the trading of equity securities.
---------------------------------------------------------------------------

    \21\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. 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-2007-78 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-2007-78. 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 NYSE Arca. 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-2007-78 and should 
be submitted on or before March 7, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful review, 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.\22\ In particular, the Commission finds that the proposed 
rule change is consistent with section 6(b)(5) of the Act,\23\ which 
requires that an exchange have rules designed, among other things, to 
promote just and equitable principles of trade, 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. The Commission believes that this proposal should benefit 
investors by increasing competition among markets that trade the Units.
---------------------------------------------------------------------------

    \22\ In approving this 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).
    \23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Commission finds that the proposal is consistent 
with section 12(f) of the Act,\24\ which permits an exchange to trade, 
pursuant to UTP, a security that is listed and registered on another 
exchange.\25\ The Commission

[[Page 8921]]

notes that it approved the original listing and trading of the Units on 
Amex.\26\ The Commission also finds that the proposal is consistent 
with Rule 12f-5 under the Act,\27\ which provides that an exchange 
shall not extend UTP to a security unless the exchange has in effect a 
rule or rules providing for transactions in the class or type of 
security to which the exchange extends UTP. The Exchange has 
represented that it meets this requirement because it deems the Units 
to be equity securities, thus rendering trading in the Units subject to 
the Exchange's existing rules governing the trading of equity 
securities.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78l(f).
    \25\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally 
prohibits a broker-dealer from trading a security on a national 
securities exchange unless the security is registered on that 
exchange pursuant to Section 12 of the Act. Section 12(f) of the Act 
excludes from this restriction trading in any security to which an 
exchange ``extends UTP.'' When an exchange extends UTP to a 
security, it allows its members to trade the security as if it were 
listed and registered on the exchange even though it is not so 
listed and registered.
    \26\ See supra note 3.
    \27\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

    The Commission further believes that the proposal is consistent 
with section 11A(a)(1)(C)(iii) of the Act,\28\ 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. Quotations and last-sale information regarding the Units 
will be disseminated through the facilities of the CTA and Consolidated 
Quote High Speed Lines. The daily settlement prices for the Futures 
Contracts are publicly available on various Web sites, and market data 
vendors and news publications publish futures prices and related data, 
including quotation and last-sale information for the Futures 
Contracts. Amex will disseminate through the facilities of the CTA an 
updated Indicative Partnership Value on a per-Unit basis at least every 
15 seconds during regular Amex trading hours. Amex intends to 
disseminate for each Partnership on a daily basis information with 
respect to the Indicative Partnership Value, the NAV, the number of 
Units outstanding, the Basket Amount, and daily trading volumes and 
closing prices of the Units. Finally, USHO's and USG's total portfolio 
composition will be disclosed, each business day that the Amex is open 
for trading, on their respective Web sites.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission also believes that the Exchange's trading halt rules 
are reasonably designed to prevent trading in the Units when 
transparency is impaired. If the listing market halts trading when the 
Indicative Fund Value is not being calculated or disseminated, the 
Exchange would halt trading in the Units. The Exchange has represented 
that it would follow the procedures with respect to trading halts set 
forth in NYSE Arca Equities Rule 7.34.
    The Commission notes that, if the Units should be delisted by the 
listing exchange, the Exchange would no longer have authority to trade 
the Units pursuant to this order.
    In support of this proposal, the Exchange has made the following 
representations:
    1. The Exchange's surveillance procedures are adequate to properly 
monitor Exchange trading of the Units in all trading sessions and to 
deter and detect violations of Exchange rules.
    2. Prior to the commencement of trading, the Exchange would inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Units, including 
risks inherent with trading the Units during the Opening and Late 
Trading Sessions when the updated Indicative Partnership Value is not 
calculated and disseminated, and of suitability recommendation 
requirements.
    3. The Information Bulletin also would discuss the requirement that 
ETP Holders deliver a prospectus to investors purchasing newly issued 
Units prior to or concurrently with the confirmation of a transaction.
    4. Trading in the Units will be subject to NYSE Arca Equities Rule 
8.300(e), which sets forth certain restrictions on ETP Holders acting 
as registered Market Makers in Units to facilitate surveillance.
    This approval order is based on these representations.
    The Commission finds good cause for approving this proposal before 
the thirtieth day after the publication of notice thereof in the 
Federal Register. As noted previously, the Commission previously found 
that the listing and trading of the Units on Amex is consistent with 
the Act.\29\ The Commission presently is not aware of any regulatory 
issue that should cause it to revisit that finding or would preclude 
the trading of the Units on the Exchange pursuant to UTP. Therefore, 
accelerating approval of this proposal should benefit investors by 
creating, without undue delay, additional competition in the market for 
the Units.
---------------------------------------------------------------------------

    \29\ See supra note 3.
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\30\ that the proposed rule change (SR-NYSEArca-2007-78) thereto, 
be and it hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2822 Filed 2-14-08; 8:45 am]

BILLING CODE 8011-01-P