Document ID: SEC-2008-0227-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-02-11T05:00Z

[Federal Register: February 11, 2008 (Volume 73, Number 28)]
[Notices]               
[Page 7774-7776]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11fe08-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57273; File No. SR-NYSEArca-2008-06]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating to the Dissemination of the Index 
Value for Equity Index-Linked Securities

February 5, 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 January 11, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''), 
through its wholly owned subsidiary, NYSE Arca Equities, Inc. (``NYSE 
Arca Equities''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by the 
Exchange. 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\ 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 proposes to amend NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(2)(c)(ii) to provide that the Exchange will commence 
delisting or removal proceedings if the value of an index or composite 
value of the indexes underlying an issuance of Equity Index-Linked 
Securities\3\ is 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 on at 
least a 60-second basis with respect to an index or indexes containing 
foreign country securities. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.nyse.com.

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    \3\ Equity Index-Linked Securities are securities that provide 
for the payment at maturity of a cash amount based on the 
performance of an underlying index or indexes of equity securities. 
See NYSE Arca Equities Rule 5.2(j)(6).
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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

[[Page 7775]]

proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in Sections A, B, and C below, of the most 
significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(c)(ii) currently 
provides that the Exchange will commence delisting or removal 
proceedings of an issue of Equity Index-Linked Securities (unless the 
Commission has approved continued trading of such Securities) if, among 
other circumstances, 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. The Exchange proposes to 
amend NYSE Arca Equities Rule 5.2(j)(6)(B)(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 or removal proceedings if the underlying index 
value or composite index value is no longer calculated or widely 
disseminated: (1) On at least a 15-second basis with respect to an 
index or indexes containing only securities listed on a national 
securities exchange;\4\ or (2) on at least a 60-second basis with 
respect to an index or indexes containing foreign country securities. 
If the official index value does not change during some or all of the 
period when trading is occurring on the NYSE Arca Marketplace\5\ (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 NYSE Arca Marketplace trading hours.
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    \4\ The Exchange states that American Depositary Shares and 
common shares of foreign issuers listed on U.S. national securities 
exchanges included in an index or indexes would be subject to the 
15-second dissemination requirement. E-mail from Timothy J. 
Malinowski, Director, NYSE Euronext, to Edward Cho, Special Counsel, 
Division of Trading and Markets, Commission, dated January 30, 2008.
    \5\ See NYSE Arca Equities Rule 1.1(e) (defining NYSE Arca 
Marketplace).
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    The Exchange seeks to conform the index dissemination requirements 
for Equity Index-Linked Securities to those for Investment Company 
Units, which include exchange-traded funds or ``ETFs,'' under NYSE Arca 
Equities Rule 5.2(j)(3). Specifically, Commentary .01(b)(2) to NYSE 
Arca Equities Rule 5.2(j)(3) requires that the value of an 
international or global index underlying an ETF must be widely 
disseminated by one or more major market data vendors at least every 60 
seconds during the Core Trading Session (9:30 a.m. to 4 p.m. Eastern 
Time).\6\ This 60-second standard reflects limitations, in some 
instances, on the frequency of intra-day trading information with 
respect to foreign country securities and that in many cases, trading 
hours for overseas markets overlap only in part, or not at all, with 
NYSE Arca Marketplace trading hours. In addition, Commentary .01(b)(2) 
to NYSE Arca Equities Rule 5.2(j)(3) provides that, if the index value 
does not change during some or all of the period when trading is 
occurring on the NYSE Arca Marketplace, the last official calculated 
index value must remain available throughout NYSE Arca Marketplace 
trading hours.
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    \6\ See NYSE Arca Equities Rule 7.34 (describing the hours of 
the three trading sessions on the Exchange).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

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

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

    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 Exchange consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.
    The Exchange has requested accelerated approval of this proposed 
rule change prior to the 30th day after the date of publication of the 
notice of the filing thereof. The Commission has determined that a 15-
day comment period is appropriate in this case.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-NYSEArca-2008-06 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-06. 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

[[Page 7776]]

public in accordance with the provisions of 5 U.S.C. 552, will be 
available for inspection and copying in the Commission's Public 
Reference Room, 100 F Street, NE., Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEArca-2008-06 and should be submitted on or before 
February 26, 2008.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-2442 Filed 2-8-08; 8:45 am]

BILLING CODE 8011-01-P