Document ID: SEC-2007-1042-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-08-01T04:00Z

[Federal Register: August 1, 2007 (Volume 72, Number 147)]
[Notices]               
[Page 42212-42216]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01au07-136]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56131; File No. SR-NYSEArca-2007-57]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change To List 
and Trade Currency Trust Shares

July 25, 2007.
    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 June 21, 2007, NYSE Arca, Inc. (the ``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 (``Exchange Notice'') 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 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

    The Exchange proposes to list and trade shares (``Shares'') of the 
following trusts: (1) CurrencySharesSM Australian Dollar 
Trust; (2) CurrencySharesSM British Pound Sterling Trust; 
(3) CurrencySharesSM Canadian Dollar Trust; (4) 
CurrencySharesSM Euro Trust (formerly, Euro Currency Trust); 
(5) CurrencySharesSM Japanese Yen Trust; (6) 
CurrencySharesSM Mexican Peso Trust; (7) 
CurrencySharesSM Swedish Krona Trust; and (8) 
CurrencySharesSM Swiss Franc Trust (individually, a 
``Trust,'' and collectively, the ``Trusts''),\3\ pursuant to NYSE Arca 
Equities Rule 8.202. 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\ The Exchange represents that the Trusts are formed under the 
laws of the State of New York and are not registered under the 
Investment Company Act of 1940.
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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 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
    The Exchange proposes to list and trade the Shares pursuant to NYSE 
Arca Equities Rule 8.202, which permits the trading of Currency Trust 
Shares \4\ either by listing or pursuant to unlisted trading privileges 
(``UTP''). The Shares are currently listed on the New York Stock 
Exchange LLC (``NYSE''),\5\ and the Exchange currently trades the 
Shares pursuant to UTP.\6\ The Shares of the Trusts will transfer their 
listing from NYSE to the Exchange.\7\
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    \4\ As defined in NYSE Arca Equities Rule 8.202(c), ``Currency 
Trust Shares'' are securities that: (1) Are issued by a trust that 
holds a specified non-U.S. currency deposited with the trust; (2) 
when aggregated in some specified minimum number, may be surrendered 
to such trust by the beneficial owner to receive the specified non-
U.S. currency; and (3) pay to the beneficial owners interest and 
other distributions on the deposited non-U.S. currency, if any, 
declared and paid by the Trust. See Securities Exchange Act Release 
No. 53253 (February 8, 2006), 71 FR 8029 (February 15, 2006) (SR-
PCX-2005-123) (approving the adoption of generic listing and trading 
standards for Currency Trust Shares and the trading of shares of the 
CurrencySharesSM Euro Trust pursuant to UTP).
    \5\ See Securities Exchange Act Release Nos. 55268 (February 9, 
2007), 72 FR 7793 (February 20, 2007) (SR-NYSE-2007-03) (approving 
the listing and trading of shares of the CurrencySharesSM 
Japanese Yen Trust); 54020 (June 20, 2006), 71 FR 36579 (June 27, 
2006) (SR-NYSE-2006-35) (approving the listing and trading of shares 
of the CurrencySharesSM Australian Dollar Trust, 
CurrencySharesSM British Pound Sterling Trust, 
CurrencySharesSM Canadian Dollar Trust, 
CurrencySharesSM Mexican Peso Trust, 
CurrencySharesSM Swedish Krona Trust, and 
CurrencySharesSM Swiss Franc Trust); and 52843 (November 
28, 2005), 70 FR 72486 (December 5, 2005) (SR-NYSE 2005-65) 
(approving the listing and trading of shares of the 
CurrencySharesSM Euro Trust) (collectively, the ``NYSE 
Approval Orders'').
    \6\ See supra note 4; Securities Exchange Act Release Nos. 55320 
(February 21, 2007), 72 FR 8828 (February 27, 2007) (SR-NYSEArca-
2007-15) (approving the trading of shares of the 
CurrencySharesSM Japanese Yen Trust pursuant to UTP); and 
54043 (June 26, 2006), 71 FR 37967, (July 3, 2006) (SR-NYSEArca-
2006-26) (approving the trading of shares of the 
CurrencySharesSM Australian Dollar Trust, 
CurrencySharesSM British Pound Sterling Trust, 
CurrencySharesSM Canadian Dollar Trust, 
CurrencySharesSM Mexican Peso Trust, 
CurrencySharesSM Swedish Krona Trust, and 
CurrencySharesSM Swiss Franc Trust pursuant to UTP).
    \7\ E-mail from Timothy J. Malinowski, Director, NYSE Group, 
Inc., to Edward Cho, Special Counsel, Division of Market Regulation, 
Commission, dated July 11, 2007 (confirming the listing status of 
the Shares).
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    Each Trust holds the applicable foreign currency \8\ and is 
expected from time to time to issue Baskets \9\ in exchange for 
deposits of the foreign currency and to distribute the foreign currency 
in connection with redemptions of Baskets. The Shares, which are issued 
by their corresponding Trust, represent units of fractional undivided 
beneficial interest in, and ownership of, such Trust. The investment 
objective of the Trusts is for the Shares to reflect the price (U.S. 
dollars) of the applicable foreign currency owned by the specific 
Trust, plus accrued interest, less the expenses and liabilities of such 
Trust. The Shares are intended to provide institutional and retail 
investors with a simple, cost-effective means of hedging their exposure 
to a particular foreign currency and otherwise implement investment 
strategies that involve foreign currencies (e.g., diversify generally 
against the risk that the U.S. dollar would depreciate).
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    \8\ The Trusts do not hold any derivative products.
    \9\ A ``Basket'' is defined as an aggregation of 50,000 Shares.
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    Rydex Specialized Products LLC is the sponsor of the Trusts 
(``Sponsor''); The Bank of New York is the trustee of the Trusts 
(``Trustee''); JPMorgan Chase Bank, N.A., London Branch, is the 
depository for the Trusts (``Depository''); and Rydex Distributors, 
Inc. is the distributor for the Trusts (``Distributor'').\10\ A 
detailed discussion

[[Page 42213]]

of the foreign exchange industry and markets, foreign currency 
liquidity and regulation, role and responsibilities of the Sponsor, 
Trustee, Distributor, and Depository, fees and expenses of the Trusts, 
distributions, voting and approvals, risk factors, clearance and 
settlement, and the procedures for creations and redemptions, and other 
details pertaining to the Shares, can be found in the Exchange Notice, 
the NYSE Approval Orders, and the Trust Prospectus (as defined 
below).\11\
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    \10\ The Exchange represents that the Sponsor, Trustee, 
Distributor, and Depository are not affiliated with the Exchange or 
one another, with the exception that the Sponsor and Distributor are 
affiliated. The Exchange further represents that no compensation is 
paid by the Sponsor to the Distributor in connection with services 
performed by the Distributor for the Trusts.
    \11\ See supra note 5; see also Prospectus Supplement No. 4, 
dated March 19, 2007, and Prospectus Supplement No. 2, dated January 
29, 2007, for each of the CurrencySharesSM Australian 
Dollar Trust, CurrencySharesSM British Pound Sterling 
Trust, CurrencySharesSM Canadian Dollar Trust, 
CurrencySharesSM Mexican Peso Trust, 
CurrencySharesSM Swedish Krona Trust, and 
CurrencySharesSM Swiss Franc Trust (Registration Nos. 
333-132362, 333-132361, 333-132363, 333-132367, 333-132366, and 333-
132364, respectively); Prospectus Supplement No. 11, dated March 19, 
2007, and Prospectus Supplement No. 7, dated January 29, 2007, for 
the CurrencySharesSM Euro Trust (Registration No. 333-
125581); and Prospectus Supplement No. 3, dated April 3, 2007, for 
the CurrencySharesSM Japanese Yen Trust (Registration 
Nos. 333-138881 and 333-141821) (collectively, the ``Trust 
Prospectus''). E-mail from Timothy J. Malinowski, Director, NYSE 
Group, Inc., to Edward Cho, Special Counsel, Division of Market 
Regulation, Commission, dated July 18, 2007 (confirming that 
additional information on the foreign currency markets, the Trust, 
and the Shares can be found in the Exchange Notice, NYSE Approval 
Orders, and the Trust Prospectus, as supplemented).
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    Quotations and last sale price information for the Shares are 
disseminated over the Consolidated Tape,\12\ as is the case for all 
equity securities traded on the Exchange (including shares of exchange-
traded funds). In addition, there is a considerable amount of foreign 
currency price and market information available on public Web sites and 
through professional and subscription services. As is the case with 
equity securities and exchange-traded funds, in most instances, real-
time information is only available for a fee, and information available 
free-of-charge is subject to delay (typically, 15 to 20 minutes).
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    \12\ E-mail from Timothy J. Malinowski, Director, NYSE Group, 
Inc., to Edward Cho, Special Counsel, Division of Market Regulation, 
Commission, dated July 18, 2007 (confirming the information being 
disseminated over the Consolidated Tape).
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    Currently, the Consolidated Tape does not provide for dissemination 
of the spot price of a foreign currency over the Consolidated Tape. 
However, investors may obtain on a 24-hour basis foreign currency 
pricing information based on the foreign currency spot price of each 
applicable foreign currency from various financial information service 
providers. Current spot prices are also generally available with bid/
ask spreads from foreign exchange dealers. In addition, the Trusts' Web 
site (http://www.currencyshares.com) provides ongoing pricing 

information for the applicable foreign currency spot prices and the 
Shares.\13\ The Exchange states that complete, real-time data for 
foreign currency futures and options prices traded on the Chicago 
Mercantile Exchange (``CME'') and the Philadelphia Stock Exchange, Inc. 
(``Phlx'') are also available by subscription from information service 
providers, and that CME and Phlx also provide delayed futures and 
options information on current and past trading sessions and market 
news free of charge on their respective Web sites.
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    \13\ The Sponsor has represented that the spot price will be 
available on the Trust's Web site without interruption 24 hours per 
day, seven days per week.
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    There are a variety of other public Web sites available at no 
charge that provide information on the foreign currencies underlying 
the Shares. Such service providers provide spot price or currency 
conversion information about the foreign currencies. Many of these 
sites offer price quotations drawn from other published sources, but 
because the information is supplied free-of-charge, it is generally 
subject to time delays. In addition, major market data vendors 
regularly report current currency exchange pricing for a fee for the 
Japanese yen and other currencies.\14\
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    \14\ The Exchange notes that there may be incremental 
differences in the foreign currency spot price among the various 
information service sources. While the Exchange believes the 
differences in the foreign currency spot price may be relevant to 
those entities engaging in arbitrage or in the active daily trading 
of the applicable foreign currency or derivatives thereon, the 
Exchange believes such differences are likely of less concern to 
individual investors intending to hold the Shares as part of a long-
term investment strategy.
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    The Trustee calculates, and the Sponsor publishes, each Trust's net 
asset value, or ``NAV,'' and NAV per Share each business day. The 
Sponsor publishes the NAV and NAV per Share for each Trust on each day 
that the Exchange is open for regular trading on the Trusts' Web 
site.\15\ In addition, the Trusts' Web site provides the following 
information: (1) The spot price for each applicable foreign 
currency,\16\ including the bid and offer and the midpoint between the 
bid and offer for the foreign currency spot price, updated every 5 to 
10 seconds; \17\ (2) an intraday indicative value (``IIV'') per Share, 
calculated by multiplying the indicative spot price of the applicable 
foreign currency by the quantity of foreign currency backing each 
Share, updated at least every 15 seconds; \18\ (3) a delayed indicative 
value (subject to a 20 minute delay), which is used for calculating 
premium/discount information; (4) premium/discount information, 
calculated on a 20 minute delayed basis; (5) accrued interest per 
Share; (6) the daily Federal Reserve Bank of New York Noon Buying Rate; 
\19\ (7) the Basket Amount \20\ for each applicable foreign currency; 
and (8) the last sale price of the Shares as traded in the U.S. 
markets, subject to a 20-minute delay.\21\ On the Trusts' Web site, the 
foreign currency spot price is available and disseminated at least 
every 15 seconds, and the IIV per Share will be calculated and 
disseminated at least every 15 seconds during NYSE Arca Marketplace's 
Opening, Core Trading, and Late Trading Sessions.\22\ The Exchange 
states that it will provide on its own Web site (http://www.nyse.com) a 

link to the Trusts' Web site.
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    \15\ The Sponsor for the Trusts has represented to the Exchange 
that the NAV and the Basket Amount (as defined herein) for the Trust 
will be available to all market participants at the same time.
    \16\ The Trusts' Web site's foreign currency spot prices will be 
provided by FactSet Research Systems (http://www.factset.com). 

FactSet Research Systems is not affiliated with the Trusts, Trustee, 
Sponsor, Depository, Distributor, or the Exchange.
    \17\ The Sponsor calculates the midpoint price. The midpoint is 
used for the purpose of calculating the premium or discount of the 
Shares.
    \18\ The IIV of the Shares is analogous to the intraday 
optimized portfolio value (sometimes referred to as ``IOPV'') and 
indicative portfolio value associated with the trading of exchange-
traded funds. The Exchange further represents that the IIV is 
equivalent to the Indicative Trust Value, as referenced in NYSE Arca 
Equities Rule 8.202(e)(2)(v), with respect to Currency Trust Shares. 
E-mail from Timothy J. Malinowski, Director, NYSE Group, Inc., to 
Edward Cho, Special Counsel, Division of Market Regulation, 
Commission, dated July 25, 2007 (confirming that the IIV is 
equivalent to the Indicative Trust Value).
    \19\ The Federal Reserve Bank of New York Noon Buying Rate is 
used for the purpose of determining the NAV of each Trust.
    \20\ A ``Basket Amount'' is the total deposit amount of the 
applicable foreign currency required to purchase a Basket of Shares.
    \21\ The last sale price of the Shares in the secondary market 
is available on a real-time basis for a fee from regular data 
vendors.
    \22\ Pursuant to NYSE Arca Equities Rule 7.34(a), the NYSE Arca 
Marketplace trading hours for exchange-traded funds are as follows: 
(1) Opening Session, 4 a.m. to 9:30 a.m. Eastern Time (``ET''); (2) 
Core Trading Session, 9:30 a.m. to 4:15 p.m. ET; and (3) Late 
Trading Session, 4:15 p.m. to 8 p.m. ET. E-mail from Timothy J. 
Malinowski, Director, NYSE Group, Inc., to Edward Cho, Special 
Counsel, Division of Market Regulation, Commission, dated July 11, 
2007 (confirming that the IIV per Share will be calculated and 
disseminated at least every 15 seconds during the Exchange's three 
trading sessions).
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    The Exchange states that the Shares are subject to the criteria for 
initial and continued listing of Currency Trust Shares under NYSE Arca 
Equities Rule 8.202. A minimum of 100,000 Shares would be required to 
be outstanding when the Shares begin to trade. This minimum number of 
Shares required to be outstanding is comparable to requirements that 
have been applied to

[[Page 42214]]

previously listed series of exchange-traded funds. The Exchange 
believes that the proposed minimum number of Shares outstanding at the 
start of trading is sufficient to provide market liquidity.\23\
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    \23\ See NYSE Arca Equities Rule 8.202(e) (setting forth the 
initial and continued listing standards applicable to the Shares). 
See also Exchange Notice (providing further discussion regarding the 
initial and continued listing standards applicable to the Shares).
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    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. The trading hours for 
the Shares on the Exchange are the same as those set forth in NYSE Arca 
Equities Rule 7.34 (Opening, Core Trading, and Late Trading Sessions, 4 
a.m. ET to 8 p.m. ET).\24\
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    \24\ See supra note 22. See also Exchange Notice (providing 
further discussion regarding the trading rules applicable to the 
Shares).
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    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading may be halted because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in the Shares inadvisable. These reasons may include (1) The 
extent to which trading is not occurring in the applicable underlying 
foreign currency, or (2) whether other unusual conditions or 
circumstances detrimental to the maintenance of a fair and orderly 
market are present. In addition, trading in the Shares could be halted 
pursuant to the Exchange's ``circuit breaker'' rule.\25\ The Exchange 
further notes that, if the IIV or the value of an underlying foreign 
currency is not being calculated or widely disseminated as required, 
the Exchange may halt trading during the day in which the interruption 
to the calculation or wide dissemination of the IIV or the value of the 
underlying foreign currency occurs. If the interruption to the 
calculation or wide dissemination of the IIV or the value of the 
underlying foreign currency persists past the trading day in which it 
occurred, the Exchange would halt trading no later than the beginning 
of the trading day following the interruption.
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    \25\ See NYSE Arca Equities Rule 7.12 (Trading Halts Due to 
Extraordinary Market Volatility).
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    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products to monitor trading in the 
Shares. The Exchange represents that these procedures are adequate to 
properly monitor Exchange trading of the Shares in all trading sessions 
and to deter and detect violations of Exchange rules. The Exchange's 
current trading surveillance focuses on detecting when securities trade 
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 also obtain information 
via the Intermarket Surveillance Group (``ISG'') from other exchanges 
that are members or affiliate members of ISG. Specifically, the 
Exchange can obtain key trading information from Phlx in connection 
with foreign currency options trading and from CME in connection with 
foreign currency futures trading.\26\ Furthermore, the Exchange states 
that the Shares are subject to NYSE Arca Equities Rule 8.202(g)-(i), 
which set forth certain restrictions on ETP Holders\27\ acting as 
registered market makers in the Shares to facilitate surveillance. The 
Exchange also has a general policy prohibiting the distribution of 
material, non-public information by its employees.
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    \26\ The Exchange states that Phlx is a member of ISG and CME is 
an affiliate member of ISG.
    \27\ An ETP Holder is a registered broker or dealer that has 
been issued an Equity Trading Permit (ETP) by NYSE Arca Equities.
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    Prior to listing and trading the Shares, the Exchange will inform 
its ETP Holders in an Information Bulletin (``Bulletin'') of the 
special characteristics and risks associated with trading the Shares. 
Specifically, the Bulletin will discuss the following: (a) The 
procedures for purchases and redemptions of Shares in Baskets (and that 
Shares are not individually redeemable); (b) NYSE Arca Equities Rule 
9.2(a), which imposes a duty of due diligence on its ETP Holders to 
learn the essential facts relating to every customer prior to trading 
the Shares; (c) how information regarding the IIV and applicable 
foreign currency values is disseminated; (d) the requirement that ETP 
Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction; 
and (e) other trading information.
    In addition, the Bulletin will reference that the Trust is subject 
to various fees and expenses, the number of units of the applicable 
foreign currency required to create a Basket or to be delivered upon 
redemption of a Basket may gradually decrease over time in the event 
that a Trust is required to withdraw or sell units of foreign currency 
to pay the Trust's expenses, and that if done at a time when the price 
of the applicable foreign currency is relatively low, it could 
adversely affect the value of the Shares, and that there is no 
regulated source of last-sale information regarding foreign currency. 
The Bulletin will also discuss any exemptive, no-action, and/or 
interpretive relief granted by the Commission from the requirements of 
the Act and any rules thereunder.\28\
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    \28\ See letter from Racquel L. Russell, Branch Chief, Office of 
Trading Practices and Processing, Division of Market Regulation, 
Commission, to George T. Simon, Esq., Foley & Lardner LLP, dated 
June 21, 2006 (``June 21, 2006 Letter'') (granting relief from 
certain rules under the Act for certain of the Trusts) and letter 
from James A Brigagliano, Assistant Director, Division of Market 
Regulation, Commission, to Michael Schmidtberger, Esq., Sidley 
Austin Brown & Wood LLP, dated January 19, 2006 (``January 19, 2006 
Letter'') (granting relief from certain rules under the Act for the 
DB Commodity Index Tracking Fund). The Sponsor is relying on: (a) 
The June 21, 2006 Letter regarding Rule 10a-1 under the Act (17 CFR 
240.10a-1), Rule 200(g) of Regulation SHO (17 CFR 242.200(g)), and 
Rules 101 and 102 of Regulation M under the Act (17 CFR 242.101 and 
102); and (b) the January 19, 2006 Letter regarding Section 11(d)(1) 
of the Act (15 U.S.C. 78k(d)(1)) and Rule 11d1-2 thereunder (17 CFR 
240.11d1-2). In addition, the Exchange represents that the Trusts 
will not be subject to the Exchange's corporate governance 
requirements and the Sponsor has received guidance from the 
Commission regarding the application of the certification rules for 
periodic reporting under the Act. See Securities Exchange Act 
Release No. 48745 (November 4, 2003), 68 FR 64154 (November 12, 
2003) (SR-NYSE-2002-33, et al.) (noting that the corporate 
governance standards will not apply to, among others, passive 
business organizations in the form of trusts). See also Securities 
Exchange Act Release No. 47654 (April 29, 2003), 68 FR 18788 (April 
16, 2003) (File No. S7-02-03) (noting that SROs may exclude from 
Rule 10A-3's requirements issuers that are organized as trusts or 
other unincorporated associations that do not have a board of 
directors or persons acting in a similar capacity and whose 
activities are limited to passively owning or holding securities, 
rights, collateral, or other assets on behalf of or for the benefit 
of the holders of the listed securities).
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2. Statutory Basis
    The proposal is consistent with section 6(b) of the Act,\29\ in 
general, and section 6(b)(5) of the Act,\30\ 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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    \29\ 15 U.S.C. 78f(b).
    \30\ 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purpose of the Act.

[[Page 42215]]

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

    The Exchange has neither solicited nor received written comments on 
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-NYSEArca-2007-57 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-2007-57. 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 offices 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-2007-57 and should 
be submitted on or before August 22, 2007.

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.\31\ In particular, the Commission finds that the proposed 
rule change is consistent with section 6(b)(5) of the Act,\32\ 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 notes that it previously approved the original 
listing and trading of the Shares on NYSE, and the instant proposal is 
substantively identical to the previous NYSE proposals.\33\
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    \31\ 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).
    \32\ 15 U.S.C. 78f(b)(5).
    \33\ See supra note 5.
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    The Commission further believes that the proposal is consistent 
with section 11A(a)(1)(C)(iii) of the Act,\34\ 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 price information for the Shares 
are disseminated over the Consolidated Tape.\35\ The Trust disseminates 
the foreign currency spot prices for each of the Trusts and the IIV per 
Share at least every 15 seconds on its Web site during the Opening, 
Core Trading, and Late Trading Sessions of the Exchange. In addition, 
the Sponsor publishes the NAV and NAV per Share for each Trust on each 
day that the Exchange is open for regular trading on the Trusts' Web 
site. Investors may obtain on a 24-hour basis foreign currency pricing 
information based on the foreign currency spot price of each applicable 
foreign currency from various financial information service providers. 
Current spot prices are also generally available with bid/ask spreads 
from foreign exchange dealers. In addition, the Trusts' Web site 
provides ongoing pricing information for the applicable foreign 
currency spot prices and the Shares. The Exchange represents that 
complete, real-time data for foreign currency futures and options 
prices traded on CME and Phlx are also available by subscription from 
information service providers. CME and Phlx also provide delayed 
futures and options information on current and past trading sessions 
and market news free of charge on their respective Web sites. There are 
a variety of other public Web sites available at no charge that provide 
information on the foreign currencies underlying the Shares, including 
spot price or currency conversion information about the foreign 
currencies. In addition, the Trusts' Web site provides the following 
information: (1) The spot price for each applicable foreign currency, 
including the bid and offer and the midpoint between the bid and offer 
for the foreign currency spot price, updated every 5 to 10 seconds; (2) 
a delayed IIV (subject to a 20 minute delay), which is used for 
calculating premium/discount information; (3) premium/discount 
information, calculated on a 20 minute delayed basis; (4) accrued 
interest per Share; (5) the daily Federal Reserve Bank of New York Noon 
Buying Rate; (6) the Basket Amount for each applicable foreign 
currency; and (7) the last sale price of the Shares as traded in the 
U.S. markets, subject to a 20-minute delay. The Exchange states that it 
will provide on its own Web site a link to the Trusts' Web site.
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    \34\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \35\ See supra note 12 and accompanying text.
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    Furthermore, the Commission believes that the proposal to list and 
trade the Shares is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Shares appropriately. 
The Commission notes that the Sponsor has represented that, prior to 
listing, the NAV for each Trust would be calculated daily and made 
available to all market participants at the same time.\36\ NYSE Arca 
Equities Rule 8.202(i) provides that, in connection with trading in the 
applicable foreign currency, options, futures or options on futures on 
such currency, or any other derivatives based on such currency, 
including Currency Trust Shares, an ETP Holder acting as a Market Maker 
(as defined in NYSE Arca Equities Rule 1.1(u)) in the Shares is 
restricted from using any material non-public information received from 
any person associated with such ETP Holder who is trading such foreign 
currency, options, futures or options on futures on such currency, or 
any other derivatives

[[Page 42216]]

based on such currency. In addition, NYSE Arca Equities Rule 8.202(g) 
prohibits an ETP Holder acting as a registered Market Maker in the 
Shares from being affiliated with a market maker in the applicable 
foreign currency, options, futures or options on futures on such 
currency, or any other derivatives based on such currency, unless 
adequate information barriers are in place, as provided in NYSE Arca 
Equities Rule 7.26.
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    \36\ See supra note 15.
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    The Commission also believes that the Exchange's trading halt rules 
are reasonably designed to prevent trading in the Shares when 
transparency is impaired. NYSE Arca Equities Rule 8.202(e)(2) provides 
that, when the Exchange is the listing market, if the value of the 
underlying foreign currency or IIV is no longer calculated or available 
on at least a 15-second delayed basis, the Exchange would consider 
suspending trading in the Shares.\37\ NYSE Arca Equities Rule 
8.202(e)(2) also provides that the Exchange may seek to delist the 
Shares in the event the value of the applicable foreign currency or IIV 
is no longer calculated or available as required.
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    \37\ See supra note 22.
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    The Commission further believes that the trading rules and 
procedures to which the Shares will be subject pursuant to this 
proposal are consistent with the Act. The Exchange has represented that 
any securities listed pursuant to this proposal will be deemed equity 
securities, and subject to existing Exchange rules governing the 
trading of equity securities.
    In support of this proposal, the Exchange has made the following 
representations:
    (1) The Exchange represents that it intends to utilize its existing 
surveillance procedures applicable to derivative products to monitor 
trading in the Shares and that such procedures are adequate to properly 
monitor Exchange trading of the Shares in all trading sessions and to 
deter and detect violations of Exchange rules. The Exchange may obtain 
information via ISG from other exchanges who are members or affiliates 
of ISG. Specifically, the Exchange can obtain such information from 
Phlx in connection with foreign currency options trading on Phlx and 
from CME in connection with foreign currency futures trading on CME.
    (2) The Exchange represents that if the interruption to the 
calculation or wide dissemination of the value of the underlying 
foreign currency or IIV persists past the trading day in which it 
occurred, the Exchange would halt trading no later than the beginning 
of the trading day following the interruption.
    (3) Prior to listing and trading the Shares, the Exchange 
represents that it will inform its ETP Holders in the Bulletin of the 
special characteristics and risks associated with trading the Shares.
    This approval order is based on the Exchange's 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 above, the Commission previously approved 
the original listing and trading of the Shares on NYSE and the trading 
of the Shares pursuant to UTP on the Exchange.\38\ The Commission 
presently is not aware of any regulatory issue that should cause it to 
revisit those findings or would preclude the listing and trading of the 
Shares on the Exchange. Accelerating approval of this proposed rule 
change would allow the Shares to be listed on the Exchange without 
undue delay and continuously traded without interruption, to the 
benefit of investors.
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    \38\ See supra notes 5 and 6.
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\39\ that the proposed rule change (SR-NYSEArca-2007-57) be, and it 
hereby is, approved on an accelerated basis.
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    \39\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\40\
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    \40\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-14836 Filed 7-31-07; 8:45 am]

BILLING CODE 8010-01-P