Document ID: SEC-2009-1841-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change Proposing To Amend Section 703.22 of the Listed Company Manual
Posted Date: 2009-12-30T05:00Z

[Federal Register: December 30, 2009 (Volume 74, Number 249)]
[Notices]               
[Page 69163-69168]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de09-128]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61230; File No. SR-NYSE-2009-124]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change Proposing To Amend Section 703.22 of the Listed Company 
Manual

December 23, 2009.
    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 December 14, 2009, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by NYSE. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons and is approving the proposed rule change on an 
accelerated basis.
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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 Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE proposes to amend Section 703.22 of the Exchange's Listed 
Company Manual (the ``Manual''), the listing standard for Equity Index-
Linked Securities, Commodity-Linked Securities and Currency-Linked 
Securities. The text of the Proposed Rule Change is attached as Exhibit 
5. 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.

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Section 703.22 of the Manual, the 
Exchange's listing standard for Equity Index-Linked Securities, 
Commodity-Linked Securities and Currency-Linked Securities pursuant to 
Rule 19b-4 \3\ under the Securities and Exchange Act of 1934 (the 
``Act''). The Exchange is proposing to amend the current generic 
listing standards under Section 703.22 and with respect to products 
that are listed pursuant to the amended standards, the Exchange will 
within five (5) business days after the commencement of trading of an 
Equity Index-Linked Securities, Commodity-Linked Securities and 
Currency-Linked Securities (collectively ``Index-Linked Securities'') 
pursuant to Section 703.22 of the Manual, file a Form 19b-4(e).\4\ The 
Exchange's proposal will conform Section 703.22 to the current listing 
standards for Index-Linked Securities on NYSE Arca, Inc. (``NYSE 
Arca'').\5\ Specifically, the proposal will amend the relevant 
provisions of Section 703.22 so that such provisions mimic the relevant 
standards in NYSE Arca Equities Rule 5.2(j)(6).
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    \3\ 17 CFR 240.19b-4(e).
    \4\ 17 CFR 240.19b-4(e)(2)(ii); 17 CFR 249.820.
    \5\ See NYSE Arca Equities Rule 5.2(j)(6).
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    The Exchange proposes to renumber current subsections (C) through 
(F) of Section 703.22 as a result of the proposed changes. Unless 
otherwise indicated, references to rules being amended reflect such 
renumbering.
General Issuer Listing Standards
    Consistent with the last sentence of NYSE Arca Equities Rule 
5.2(j)(6)(A)(e), the Exchange proposes to amend the issuer listing 
standard to allow for Index-Linked Securities to be issued by 
supranational entities, and proposes that such issuers will be 
evaluated on a case-by-case basis.\6\ Specifically Section 703.22(A)(1) 
will be amended to read as follows:
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    \6\ See Securities and Exchange Release No. 56637 (October 10, 
2007), 72 FR 58704 (October 16, 2007) (SR-NYSEArca-2007-92).

    If the issuer is a New York Stock Exchange-listed company, the 
entity must be a

[[Page 69164]]

company in good standing (i.e., meets Continued Listing Criteria); 
if an affiliate of an NYSE-listed company, the NYSE-listed company 
must be a company in good standing; if not listed, the issuer must 
meet the size and earnings requirements of Sections 102.01-102.03 or 
Sections 103.01-103.05. (Sovereign issuers and supranational 
entities will be evaluated on a case-by-case basis.)
Limitation on Leverage
    Currently, Section 703.22(B)(6) provides that the payment at 
maturity may not be based on a multiple of the negative performance of 
an underlying index or indexes, Commodity Reference Asset or Currency 
Reference Asset, as the case may be, although the payment at maturity 
may or may not provide for a multiple of the positive performance of an 
underlying index or indexes, Commodity Reference Asset or Currency 
Reference Asset, as the case may be.
    Consistent with NYSE Arca Equities Rule 5.2(j)(6)(A)(d), the 
Exchange proposes to amend Section 703.22(B)(6) to allow the Exchange 
to consider for listing and trading Index-Linked Securities that 
provide that in no event will a loss or negative payment at maturity be 
accelerated by a multiple that exceeds three times the performance of 
an underlying Reference Asset.\7\ Specifically, Section 703.22(B)(6) 
will be amended to read as follows:
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    \7\ See Securities and Exchange Release No. 59332 (January 30, 
2009), 74 FR 6338 (February 6, 2009) (SR-NYSEArca-2008-136).

    The payment at maturity may or may not provide for a multiple of 
the direct or inverse performance of an underlying Reference Asset; 
however, in no event will a loss or negative payment at maturity be 
accelerated by a multiple that exceeds three times the performance 
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of an underlying Reference Asset.

    In connection with Index-Linked Securities that seek to provide a 
loss or payment at maturity that will be accelerated by an inverse 
multiple that exceeds three times the performance of an underlying 
Reference Asset, the Exchange's proposal would continue to require 
specific Commission approval pursuant to Section 19(b)(2) of the 
Act.\8\ In particular, Section 703.22 would expressly prohibit Index-
Linked Securities that seek to provide such results from being approved 
by the Exchange for listing and trading pursuant to Rule 19b-4(e) under 
the Act.\9\ Fees and expenses are excluded for the purposes of 
determining whether such results exceed three times the performance of 
an underlying Reference Asset.
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 240.19b-4(e).
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Equity Index-Linked Securities
    Equity Index-Linked Securities are linked to the performance of an 
underlying index or indexes of equity securities. The Exchange proposes 
to add the following paragraph to the beginning of Section 703.22:

    The payment at maturity with respect to Equity Index-Linked 
Securities, Commodity-Linked Securities and Currency-Linked 
Securities is based on the performance of:

    The Exchange proposes to clarify Section 703.22 by designating that 
an underlying index or indexes of equity securities will be referred to 
as an Equity Reference Asset. Section 703.22(i) will define an Equity 
Reference Asset as:

    In the case of Equity Index-Linked Securities, an underlying 
index or indexes of equity securities (an ``Equity Reference 
Asset''), or

    The Exchange proposed to amend the initial and continued listing 
standards for Equity Index-Linked Securities. Accordingly, the Exchange 
proposes to add new Section 703.22(C). The relevant subsections of 
current Section 703.22(B) will be renumbered and amended as Section 
703.22 (C) as discussed below.
1940 Act Securities
    Currently, component securities in the underlying equity index for 
Equity Index-Linked Securities must be either: (1) Securities that are 
(a) issued by a reporting company under the Act that is listed on a 
national securities exchange and (b) an ``NMS stock,'' as defined in 
Rule 600 of Regulation NMS; \10\ or (2) foreign country securities or 
American Depository Shares, subject to limitations.
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    \10\ See 17 CFR 242.600(b)(47).
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    Consistent with NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1), the 
Exchange proposes to amend Section 703.22(C)(I)(1) to permit the 
listing and trading of Equity Index-Linked Securities where the 
underlying index consists in whole or in part of closed-end fund 
securities or exchange-traded fund (ETF) securities, which, in each 
case, are registered under the 1940 Act and are listed on national 
securities exchanges.\11\ Accordingly, Section 703.22(C)(I)(1) for 
initial listing will be amended as follows:
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    \11\ See Securities and Exchange Release No. 56879 (December 3, 
2007), 72 FR 69271 (December 7, 2007) (SR-NYSEArca-2007-110).

    The Exchange will consider listing Equity Index-Linked 
Securities that meet the requirements of this subparagraph (C)(I), 
where the payment at maturity or earlier redemption is based on an 
index or indexes of equity securities, securities of closed-end 
management investment companies registered under the Investment 
Company Act of 1940 (the ``1940 Act'') and/or investment company 
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units. The issue must meet the following initial listing criteria:

    Further, Section 703.22(C)(I)(1)(b)(vii)(A) for continued listing 
will be renumbered to Section 703.22(C)(I)(1)(b)(v)(A) and, consistent 
with NYSE Arca Rule 5.2(j)(6)(B)(I)(1)(v)(A) will be amended as 
follows:

    Securities (other than foreign country securities and American 
Depository Receipts (``ADRs'') that are (i) issued by a 1934 Act 
reporting company or by an investment company registered under the 
1940 Act, which in each case is listed on a national securities 
exchange and (ii) an ``NMS stock'' (as defined in Rule 600 of SEC 
Regulation NMS); or
Index Weighing Criteria and Notional Volume
    Consistent with NYSE Arca Equities Rules 5.2(j)(6)(B)(I)(1)(b)(ii) 
and 5.2(j)(6)(B)(I)(2)(a)(ii), the Exchange proposes to conform the 
equity index weighting requirements and adopt criteria based upon the 
notional volume traded per month to both the listing standards and 
continued listing standards for Equity Index-Linked Securities.
    Currently for initial listing, Section 703.22(C)(I)(1)(b)(ii) 
provides that each component security of an equity index shall have 
trading volume in each of the last six months of not less than 
1,000,000 shares per month, except that for each of the lowest weighted 
component securities in the index that in the aggregate account for no 
more than 10% of the weight of the index, the trading volume will be at 
least 500,000 shares per month in each of the last six months.
    The Exchange is proposing to delete the current requirement and 
adopt criteria that looks to a minimum global notional volume (``Global 
Notional Volume'') \12\ traded per month averaged over the last six 
months.\13\ Proposed Section 703.22(C)(I)(1)(b)(ii) will be amended as 
follows:
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    \12\ Global Notional Volume is defined as the total shares 
traded globally times the price per share.
    \13\ See Securities and Exchange Release No. 58376 (August 18, 
2008), 73 FR 49726 (August 22, 2008) (SR-NYSEArca-2008-70).

    Component stocks that in the aggregate account for at least 90% 
of the weight of the index each shall have a minimum global monthly 
trading volume of 1,000,000 shares, or minimum Global Notional 
Volume traded per month of $25,000,000, averaged over the last six 
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months.

[[Page 69165]]

    With respect to the continued listing criteria, Section 
703.22(B)(I)(2)(a)(iii) currently sets forth that the trading volume of 
each component security in the index must be at least 500,000 shares 
for each of the last six months, except that for each of the lowest 
weighted components in the index that in the aggregate account for no 
more than 10% of the dollar weight of the index, trading volume must be 
at least 400,000 shares for each of the last six months.
    The Exchange is proposing to delete the current requirement and 
adopt criteria that looks to minimum Global Notional Volume traded per 
month averaged over the last six months. Proposed Section 
703.22(C)(I)(2)(a)(iii) will be renumbered to Section 
703.22(C)(I)(2)(a)(ii) and will be amended as follows:

    Component stocks that in the aggregate account for at least 90% 
of the weight of the index each shall have a minimum global monthly 
trading volume of 500,000 shares, or minimum Global Notional Volume 
traded per month of $12,500,000, averaged over the last six months.

    With respect to both the initial and continued listing standards, 
the Exchange believes that considering the weighting of the bottom 10% 
component securities is insignificant for determining the liquidity of 
the index. Rather, the Exchange proposes that focusing on 90% of the 
top weighed index component securities is a better indication as to 
whether the index or indexes has sufficient liquidity for listing and 
trading of the related Equity Index-Linked Security.
Index Rebalancing
    Consistent with NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(a)(i), 
the Exchange proposes to (i) conform equity index rebalancing criteria, 
and (ii) amend the quarterly index rebalancing requirement for equal-
dollar or modified equal-dollar weighed indexes and relocate the 
requirement for initial listing standards to the continued listing 
standards for Equity Index-Linked Securities.\14\
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    \14\ See Securities and Exchange Release No. 57634 (April 8, 
2008), 73 FR 20081 (April 14, 2008) (SR-NYSEArca-2008-35).
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    For Equity Index-Linked Securities, the Exchange proposes to 
remove, from the current Section 703.22(B)(I)(2)(a)(i), the requirement 
that only capitalization weighted, modified capitalization weighted and 
price weighted indexes be reviewed as of the first day of January and 
July in each year. Instead, the Exchange proposed that Section 
703.22(B)(I)(2)(a)(i) will require all Indexes to be subject to the 
standard at the time the index is rebalanced. Specifically, the newly 
renumbered Section 703.22(C)(I)(2)(a)(i) will be amended as follows:

    The criteria that no single component represent more than 25% of 
the dollar weight of the index and the five highest dollar weighted 
components in the index can not represent more than 50% (or 60% for 
indexes with less than 25 components) of the dollar weight of the 
index, need only be satisfied at the time the Index is rebalanced; 
and

    Consistent with NYSE Arca Equities Rule 5.6(j)(6)(B)(I)(2)(d), the 
Exchange proposes to relocate and amend Section 703.22(C)(I)(1)(b)(iii) 
from the initial listing standards to the continued listing standards 
to new paragraph Section 703.22(C)(I)(2)(d), which currently requires 
that equity indexes based upon the equal-dollar, or modified equal-
dollar weighting method be rebalanced at least semiannually. Instead, 
the Exchange proposes that an index be rebalanced at least annually. 
Specifically, new paragraph Section 703.22(C)(I)(1)(b)(iii) will be 
relocated and amended as follows:
    Index Rebalancing--Indexes will be rebalanced at least annually.
Capitalization Weighted Index Methodologies
    Consistent with NYSE Arca Equities Rule 5.2(j)(6)(B)(I), the 
Exchange proposes to (1) eliminate initial and continued listing 
capitalization weighted and modified capitalization weighted index 
requirements for Equity Index-Linked Securities.\15\ Specifically, the 
Exchange proposes to eliminate Section 703.22(C))(I)(1)(b)(iv)[sic], 
the current initial listing requirement, that in the case of a 
capitalization weighted index or modified capitalization weighted 
index, the lesser of the five highest dollar weighted component 
securities in the index or the highest dollar weighted component 
securities in the index that in the aggregate represent at least 30% of 
the total number of component securities in the index, must have an 
average monthly trading volume of at least 2,000,000 shares over the 
previous six months. The Exchange also proposes to eliminate Section 
703.22(C)(I)(2)(a)(iv), the current continued listing requirement, that 
in the case of a capitalization-weighted index or modified 
capitalization weighted index, the lesser of the five highest dollar 
weighted component securities in the index or the highest dollar 
weighted component securities in the index that in the aggregate 
represent at least 30% of the total number of stocks in the index have 
an average monthly trading volume of at least 1,000,000 shares over the 
previous six months.
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    \15\ See Footnote 13.
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    Consistent with the NYSE Arca Rule, the Exchange proposes that 
capitalization-weighted index or modified capitalization weighted 
indexes comply with the initial and continued listing requirements 
currently applicable to all other equity indexes under Section 
703.22(C)(I) regardless of the index methodology.
Index Standardized Option Criteria
    Consistent with NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(iv) 
as well as the criteria applied by options exchanges to securities 
underlying exchange-traded options,\16\ the Exchange also proposes to 
amend current Equity Index-Linked Securities Section 
703.22(C)(I)(1)(b)(vi) to incorporate a limited exception to the 
requirement that 90% of the index's numerical value and at least 80% of 
the total number of component securities underlying and Equity 
Reference Asset, as defined above, must meet the then current criteria 
for standardized options trading on a national securities exchange. The 
Exchange proposes that an underlying index would not be subject to such 
requirement if (1) no underlying component security represents more 
than 10% of the dollar weight of such index and (ii) such index has a 
minimum of 20 component securities.\17\ Specifically, Section 
703.22(C)(I)(1)(b)(vi) for initial listing will be renumbered to 
Section 703.22(C)(I)(1)(b)(iv) and will be amended as follows:

    \16\ See, e.g., Rule 5.3 of NYSE Arca, Inc.; Rule 1009 of the 
Philadelphia Stock Exchange, Inc.; Rule 5.3 of the Chicago Board 
Options Exchange, Incorporated: and Rule 502 of the International 
Securities Exchange, LLC.
    \17\ See Footnote 11.
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    90% of the index's numerical value and at least 80% of the total 
number of component securities will meet the then current criteria 
for standardized options trading on a national securities exchange; 
an index will not be subject to this requirement if (a) no 
underlying component security represents more than 10% of the dollar 
weight of the index and (b) the index has a minimum of 20 
components; and
Comprehensive Surveillance Sharing Agreements
    Currently, the Exchange's listing standards for Equity Index-Linked 
Securities limit the permissible aggregate weight of underlying foreign 
country securities to 20% of the overall index where the primary 
trading markets of the foreign country securities or American 
Depository Receipts (``ADRs'') are not members of the

[[Page 69166]]

Intermarket Surveillance Group (``ISG'') or are not otherwise parties 
to comprehensive surveillance sharing agreements (``CSSA'') with the 
Exchange. Consistent with NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(b)(1)(v)(B) as well as NYSE Arca Options Rule 
5.3(g)(2)(A), the Exchange proposes to amend Section 
703.22(C)(I)(1)(b)(vii)(B) to increase the permissible aggregate weight 
of underlying foreign country securities up to 50% of the overall 
index. According to the proposal, the Exchange will permit the listing 
and trading of Equity Index-Linked Securities where the underlying 
foreign country securities or ADRs, which trade on foreign markets that 
are not ISG members or are not otherwise subject to a CSSA agreement 
with the Exchange, account for up to 50% of the aggregate dollar weight 
of the index, so long as: (i) the securities of any one primary foreign 
market which is not an ISG member or does not have a CSSA with the 
Exchange do not represent more than 20% of the dollar weight of the 
index, and (ii) the securities of any two primary foreign markets which 
are not ISG members or do not have a CSSA with the Exchange do not 
represent more than 33% of the dollar weight of the index. 
Specifically, Section 703.22(C)(I)(1)(b)(vii)(B) will be renumbered to 
Section 703.22(C)(I)(1)(b)(v)(B) and will be amended as follows:

    Foreign country securities or ADRs, provided that foreign 
country securities or foreign country securities underlying ADRs 
having their primary trading market outside the United States on 
foreign trading markets that are not members of the Intermarket 
Surveillance Group (``ISG'') or parties to comprehensive 
surveillance sharing agreements with the Exchange will not in the 
aggregate represent more than 50% of the dollar weight of the index, 
provided further that:
    (i) the securities of any one such market do not represent more 
than 20% of the dollar weight of the index, and
    (ii) the securities of any two such markets do not represent 
more than 33% of the dollar weight of the index.
Clarify the Applicability of the Continued Listing Criteria
    Consistent with NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(a), (b) 
and (c), the Exchange proposes to clarify (1) that the applicable 
continued listing criteria apply unless the Commission has approved 
continued trading of the Equity Index-Linked Securities,\18\ and (2) 
which initial listing criteria will continuously be maintained. 
Specifically, Sections 703.22(C)(I)(2)(a), (b) and (c) will be amended 
as follows:
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    \18\ See Securities and Exchange Release No. 52204 (August 3, 
2005), 70 FR 46559 (August 10, 2005) (SR-PCX-2006-63) [sic].

    (a) The Exchange will commence delisting or removal proceedings 
(unless the Commission has approved the continued trading of the 
subject Index-Linked Security), if any of the initial listing 
criteria described in paragraphs (1)(a) and (1)(b)(2) above are not 
continuously maintained, except that:
    (b) In connection with an Equity Index-Linked Security that is 
listed pursuant to Section 703.22, the Exchange will commence 
delisting or removal proceedings (unless the Commission has approved 
the continued trading of the subject Index-Linked Security) if an 
underlying index or indexes fails to satisfy the maintenance 
standards or conditions for such index or indexes as set forth by 
the Commission in its order under Section 19(b)(2) of the 1934 Act 
approving the index or indexes for the trading of options or other 
derivatives.
    (c) The Exchange will also commence delisting or removal 
proceedings (unless the Commission has approved the continued 
trading of the subject Index-Linked Security), under any of the 
following circumstances:
Index Rebalancing After 33\1/3\ Change to Underlying Components and 
Greater Than Ten Components Requirement
    Consistent with NYSE Arca Equities Rules, the Exchange proposes to 
delete Section 703.22(B)(I)(2)(a)(ii), the continued listing 
requirement for Equity Index-Linked Securities that prohibit an index 
from increasing or decreasing by 33\1/3\% the number of index 
components initially listed and also prohibit an index from having less 
than 10 components.\19\
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    \19\ See Securities and Exchange Release No. 57132 (January 11, 
2008), 73 FR 3300 (January 17, 2008) (SR-NYSEArca-2007-125).
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Index Dissemination Requirements for Foreign Country Securities
    Section 703.22(C)(I)(2)(c)(ii) provides that the Exchange will 
commence delisting proceedings of an issue of Equity Index-Linked 
Securities (unless the Commission has approved continued trading) if 
the value of the index or composite value of the indexes underlying 
such issue is no longer calculated or widely disseminated on at least a 
15-second basis. Consistent with NYSE Arca Equities Rules 
5.2(j)(6)(B)(I)(2)(c)(ii) and 5.2(j)(3), Commentary .01(b)(2) \20\, the 
Exchange proposes to amend Section 703.22(C)(I)(2)(c)(ii) to 
distinguish between indexes consisting solely of U.S. equity securities 
and those consisting of foreign securities or a combination of U.S. and 
foreign equity securities. The proposed amendment provides that the 
Exchange will commence delisting proceedings if the underlying index 
value or values are no longer calculated or widely disseminated on at 
least a 15-second basis with respect to an index or indexes containing 
only securities listed on a national securities exchange, or at least a 
60-second basis with respect to an index or indexes containing foreign 
country securities. Specifically, Section 703.22(C)(I)(2)(c)(ii) will 
be amended as follows:
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    \20\ The requirements for Investment Company Units were approved 
by the Commission in Securities Exchange Act Release No. 34-55621 
(April 12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-
86).

    If the value of the index or composite value of the indexes, if 
applicable, is no longer calculated or widely disseminated on at 
least a 15-second basis with respect to indexes containing only 
securities listed on a national securities exchange, or on at least 
a 60-second basis with respect to indexes containing foreign country 
securities, provided, however, that, if the official index value 
does not change during some or all of the period when trading is 
occurring on the Exchange (for example, for indexes of foreign 
country securities, because of time zone differences or holidays in 
the countries where such indexes' component stocks trade) then the 
last calculated official index value must remain available 
throughout the Exchange's trading hours; or
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \21\ of the Securities Exchange Act of 1934 (the 
``Act''),\22\ in general, and furthers the objectives of Section 
6(b)(5) \23\ of the Act in particular in that it is 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. The NYSE's listing 
requirements for Index-Linked Securities as amended by the proposed 
rule change remain at least as stringent as those of any other national 
securities exchange and, consequently, the proposed amendment is 
consistent with the protection of investors and the public interest.
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    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78a.
    \23\ 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.

[[Page 69167]]

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. 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-NYSE-2009-124 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2009-124. 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 such filing also will be available for 
inspection and copying at the principal office of NYSE. 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 publicly available. All 
submissions should refer to File Number SR-NYSE-2009-124 and should be 
submitted on or before January 20, 2010.

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

    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.\24\ The Commission believes that the proposal is consistent 
with Section 6(b)(5) \25\ of the Act in particular in that it is 
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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    \24\ 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).
    \25\ 15 U.S.C. 78f(b)(5).
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    The Exchange is proposing to amend provisions of Section 703.22 of 
the Listed Company Manual to conform certain provisions with 
corresponding provisions in NYSE Arca Equities Rule 5.2(j)(6). As such, 
provisions relating to (i) general issuer listing standards; (ii) 
limitation on leverage; (iii) 1940 Act securities and underlying equity 
indexes; (iv) index weighing criteria and notional volume; (v) index 
rebalancing; (vi) capitalization weighted index methologies; (vii) 
index standardized option criteria; (viii) aggregate weight of 
underlying foreign country securities where these are no comprehensive 
surveillance sharing agreements; (ix) the applicability of continued 
listing criteria; (x) index rebalancing after 33\1/3\ change to 
underlying components, and (xi) index dissemination requirements for 
foreign country securities will be amended in a manner consistent with 
the corresponding provision in NYSE Arca Equities Rule 5.2(j)(6). The 
Commission notes that it has previously approved these changes as made 
to NYSE Arca Equities Rule 5.2(j)(6).\26\ The Commission believes that 
the NYSE's proposal to amend Section 703.22 of the Listed Company 
Manual is consistent with the Act for the reasons contained in the 
previous approval orders.\27\ In addition, the Commission also believes 
that the technical changes to Section 703.22 of the Listed Company 
Manual clarify the format and application of the proposed amendments. 
In addition, the Commission believes that the Exchange's amendment to 
Section 703.22 of the Listed Company Manual relating to the listing and 
trading of Equity Index-Linked Securities should fulfill the intended 
objective of Rule 19b-4(e) under the Act \28\ by allowing such 
derivative securities products to be listed and traded without separate 
Commission approval. The Commission believes that the proposed rule 
change should facilitate the listing and trading of additional types of 
Equity Index-Linked Securities and reduce the timeframe to bringing 
these securities to market.
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    \26\ See Securities Exchange Act Release Nos. 56637 (October 10, 
2007), 72 FR 58704 (October 16, 2007) (SR-NYSEArca-2007-92) (general 
issuer listing standards); 59332 (January 30, 2009), 74 FR 6338 
(February 6, 2009) (SR-NYSEArca-2008-136) (limitation on leverage); 
56879 (December 3, 2007), 72 FR 69271 (December 7, 2007) (SR-
NYSEArca-2007-110) (1940 Act securities and underlying equity 
indexes; index standardized option criteria); 58376 (August 18, 
2008), 73 FR 49726 (August 22, 2008) (SR-NYSEArca-2008-70) (index 
weighing criteria and notional volume; capitalization weighted index 
methodologies); 57634 (April 8, 2008), 73 FR 20081 (April 14, 2008) 
(SR-NYSEArca-2008-35) (index rebalancing); 59180 (December 30, 
2008), 74 FR 754 (January 7, 2009) (SR-NYSEArca-2008-121) (aggregate 
weight of underlying foreign country securities where there are no 
comprehensive surveillance sharing agreements); 52204 (August 3, 
2005), 70 FR 46559 (August 10, 2005) (SR-PCX-2005-63) (applicability 
of continued listing criteria); 57132 (January 11, 2008), 73 FR 3300 
(January 17, 2008) (SR-NYSEArca-2007-125) (index rebalancing after 
33\1/3\ change to underlying components and ten-component minimum); 
and 57389 (February 27, 2008) 73 FR 11973 (March 5, 2008) (SR-
NYSEArca-2008-06) (index dissemination requirements for foreign 
country securities).
    \27\ Id.
    \28\ 17 CFR 240.19b-4(e).
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    The Commission also finds good cause, pursuant to Section 19(b)(2) 
of the Act,\29\ for approving the proposed rule change prior to the 
30th day after the date of publication of notice in the Federal 
Register. With this proposal, the Exchange is adopting changes that 
have previously been approved by the Commission,\30\ and that will 
conform provisions of Section 703.22 of the Listed Company Manual to 
corresponding provisions of NYSE Arca Equities Rule 5.2(j)(6). The 
Commission does not believe that this proposal raises any novel 
regulatory issues. Therefore, the Commission finds good cause, 
consistent with Section 19(b)(2) of the Act,\31\ to approve the 
proposed rule change on an accelerated basis.
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    \29\ 15 U.S.C. 78s(b)(2).
    \30\ See supra note 26.
    \31\ 15 U.S.C. 78s(b)(2).

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[[Page 69168]]

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\32\ that the proposed rule change (SR-NYSE-2009-124) be, and it 
hereby is, approved on an accelerated basis.
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    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
Florence E. Harmon,
Deputy Secretary.
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    \33\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-30948 Filed 12-29-09; 8:45 am]

BILLING CODE 8011-01-P