Document ID: SEC-2008-0040-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations: American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Retire the EEM Options Pilot Program
Posted Date: 2008-01-08T05:00Z

[Federal Register: January 8, 2008 (Volume 73, Number 5)]
[Notices]               
[Page 1377-1378]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ja08-90]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57070; File No. SR-Amex-2007-139]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to Retire the EEM Options Pilot Program

December 31, 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 December 20, 2007, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') 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 Exchange has filed the proposal pursuant to section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which 
renders the proposal effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to retire an existing pilot program (the 
``Pilot''),\5\ that permits the Exchange to list and trade options 
(``Fund Options'') on the iShares MSCI Emerging Markets Index Fund 
(``Fund'').\6\ The text of the proposed rule change is available on the 
Amex's Web site (http://www.amex.com), at the Exchange's Office of the 

Secretary and at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 53824 (May 17, 
2006), 71 FR 30003 (May 24, 2007) (SR-Amex-2006-43).
    \6\ The Fund is an open-end investment company designed to hold 
a portfolio of securities that track the MSCI Emerging Markets Index 
(the ``Index''). The Index is a capitalization-weighted index 
created and maintained by Morgan Stanley Capital International, Inc. 
For a complete description of the Fund and the Index, see id.
---------------------------------------------------------------------------

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 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
    The purpose of this rule change is to retire the Pilot that permits 
the Exchange to list the Fund Options because the Fund now meets all of 
the Exchange's generic initial and maintenance standards.
    On May 17, 2006, the Commission approved the Amex proposal to list 
and trade the Fund Options for a 60-day pilot period that expired on 
July 2, 2006.\7\ On June 30, 2006, the Commission approved a 90-day 
extension to the Pilot that expired on October 1, 2006.\8\ On September 
29, 2006, the Commission approved a second 90-day extension to the 
Pilot that expired on January 2, 2007.\9\ On January 3, 2007, the 
Commission approved a third extension to the Pilot for an additional 
180-day period to expire on June 30, 2007.\10\ On June 25, 2007, the 
Commission approved a fourth extension to the Pilot for an additional 
six (6) months, set to expire on December 31, 2007.\11\
---------------------------------------------------------------------------

    \7\ See supra note 5.
    \8\ See Securities Exchange Act Release No. 34-54081 (June 30, 
2006), 71 FR 38911 (July 10, 2006) (File No. SR-Amex-2006-60).
    \9\ See Securities Exchange Act Release No. 34-54553 (Sept. 29, 
2006), 71 FR 59561 (Oct. 10, 2006) (File No. SR-Amex-2006-91).
    \10\ See Securities Exchange Act Release No. 34-55040 (Jan. 3, 
2007), 72 FR 1348 (Jan. 11, 2007) (File No. SR-Amex-2007-01).
    \11\ See Securities Exchange Act Release No. 34-55955 (June 25, 
2007), 72 FR 36079 (July 2, 2007) (File No. SR-Amex-2007-57).
---------------------------------------------------------------------------

    The Fund now meets the Exchange's listing and maintenance standards 
in Commentary .06 to Amex Rule 915 and Commentary .07 to Amex Rule 916, 
respectively (the ``Listing Standards'' \12\). The Listing Standards 
permit the Exchange to list funds structured as open-end investment 
companies, such as the Fund, without having to file for approval with 
the Commission to list for trading options on such funds.
---------------------------------------------------------------------------

    \12\ Commentary .06 to Amex Rule 915 sets forth the initial 
listing and maintenance standards for shares or other securities 
(``Exchange-Traded Fund Shares'') that are principally traded on a 
national securities exchange or through the facilities of a national 
securities exchange and reported as a national market security, and 
that represent an interest in a registered investment company 
organized as an open-end management investment company, a unit 
investment trust or other similar entity.
---------------------------------------------------------------------------

    When the Exchange first sought to list options on the Fund, the 
Exchange had determined that the Fund met substantially all of the 
Exchange's Listing Standards requirements, but did not meet the Listing 
Standards requirement that no more than 50% of the weight of the 
securities in the Fund be comprised of securities that are not subject 
to a comprehensive surveillance sharing agreement (``CSSA'').\13\ The 
Exchange had in place CSSAs with foreign exchanges that covered 46.72% 
of the securities in the fund. In order to meet the 50% threshold, the 
Exchange requested the Commission's approval to rely upon a memorandum 
of understanding that the Commission had entered into with the CNBV 
\14\ (the ``MOU'') because the securities traded on Bolsa represented 
7.42% of the weight of the Fund.\15\
---------------------------------------------------------------------------

    \13\ See Commentary .06(b)(i) to Amex Rule 915.
    \14\ The National Commission for Banking and Securities, or 
``CNBV,'' is Mexico's regulatory body for financial markets and 
banking. The CNBV regulates the Bolsa Mexicana de Valores 
(``Bolsa'').
    \15\ See supra note 5. The Commission permitted the Exchange to 
rely on the MOU, and the Exchange agreed to use its best efforts to 
obtain a CSSA with the Bolsa during the respective pilot periods, 
which to date has not been obtained.
---------------------------------------------------------------------------

    The Fund has now become compliant with Commentary .06(b)(i) to Amex 
Rule 915 because the Korean Exchange (``KRX'') \16\ recently became a 
member of the Intermarket Surveillance Group and, therefore, securities 
and other products trading on its markets are now subject to a CSSA. As 
a result, the percentage of the weights of the Fund represented by 
South Korean securities now renders the Fund compliant with the 
Exchange's Listing Standards requirements because

[[Page 1378]]

more than 50% of the weight of the securities in the Fund are now 
subject to a CSSA.
---------------------------------------------------------------------------

    \16\ The KRX was created on January 27, 2005 through the 
consolidation of three domestic Korean Exchanges: Korea Stock 
Exchange (KSE), KOSDAQ Market and Korea Futures Market (KOFEX). See 
http://neg.krx.co.kr/index.html.

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

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations under the Act applicable to a national securities exchange 
and, in particular, the requirements of section 6(b) of the Act.\17\ 
Specifically, the Exchange believes the proposed rule change is 
consistent with the section 6(b)(5) Act \18\ requirements that the 
rules of an exchange be designed to promote just and equitable 
principles of trade, to prevent fraudulent and manipulative acts and, 
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to section 
19(b)(3)(A) of the Act \19\ and Rule 19b-4(f)(6) thereunder. \20\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing. \21\ 
However, Rule 19b-4(f)(6)(iii) \22\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay, to permit the Exchange to 
list options on the Fund immediately. The Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest. The proposal is substantially 
similar to a proposal recently submitted by CBOE and approved by the 
Commission, \23\ and it raises no new regulatory issues. The Commission 
notes that the Pilot, which would otherwise expire December 31, 2007, 
is no longer needed now that the Fund complies with Commentary 
.06(b)(i) to Amex Rule 915. For these reasons, the Commission 
designates the proposed rule change to be operative upon filing with 
the Commission. \24\
---------------------------------------------------------------------------

    \21\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing 
of the proposed rule change, or such shorter time as designated by 
the Commission. The Exchange has requested and the Commission has 
determined to waive this five-day pre-filing notice requirement.
    \22\ Id.
    \23\ See Securities Exchange Act Release No. 56448 (September 
17, 2007), 72 FR 54304 (September 24, 2007) (SR-CBOE-2007-111).
    \24\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors or otherwise in 
furtherance of the purposes of the Act.

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-Amex-2007-139 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-Amex-2007-139. 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 Amex.
    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-Amex-2007-139 
and should be submitted on or before January 29, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority. \25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-86 Filed 1-7-08; 8:45 am]

BILLING CODE 8011-01-P