Document ID: SEC-2008-1485-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-10-30T04:00Z

[Federal Register: October 30, 2008 (Volume 73, Number 211)]
[Notices]               
[Page 64649-64651]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30oc08-83]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58856; File No. SR-NYSEArca-2008-112]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to the 
Listing of the NETS S&P/MIB Index Fund (Italy)

October 24, 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 October 21, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change described in Items I and II below, which Items 
have been 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 C.F.R. 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 fund of the NETS Trust (``Trust''): NETS S&P/MIB Index Fund 
(Italy). The text of

[[Page 64650]]

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 
Public Reference Room of the Commission.

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 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 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 list and trade the Shares of the following 
fund under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing 
standards for Investment Company Units (``ICUs''): \3\ NETS S&P/MIB 
Index Fund (Italy) (the ``Fund'').
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    \3\ An Investment Company Unit is a security that represents an 
interest in a registered investment company that holds securities 
comprising, or otherwise based on or representing an interest in, an 
index or portfolio of securities (or holds securities in another 
registered investment company that holds securities comprising, or 
otherwise based on or representing an interest in, an index or 
portfolio of securities). See NYSE Arca Equities Rule 5.2(j)(3)(A).
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    The Fund is currently listed on NYSE Alternext US LLC (``NYSE 
Alternext US'') (formerly, American Stock Exchange LLC) and is traded 
on the Exchange pursuant to unlisted trading privileges (``UTP''). 
Prior to listing on the Exchange, the Fund would be required to satisfy 
the applicable delisting procedures of NYSE Alternext US and applicable 
statutory and regulatory requirements, including, without limitation, 
Section 12 of the Act,\4\ relating to listing the Fund on the 
Exchange.\5\
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    \4\ 15 U.S.C. 78(l).
    \5\ The Exchange will seek the voluntary consent of the issuer 
of the Fund to be delisted from NYSE Alternext US and listed on the 
Exchange. The Exchange notes that its approval of the Fund's listing 
application would be required prior to listing.
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    The Fund is an ``index fund'' that seeks to provide investment 
results that correspond generally to the price and yield performance, 
before fees and expenses, of publicly-traded securities in the 
aggregate in the Italian equity markets, as represented by the S&P/MIB 
Index (``Index''). The primary market for securities in the Index is 
principally the Borsa Italiana.
    The Exchange is submitting this proposed rule change because the 
Index for the Fund does not meet all of the ``generic'' listing 
requirements of Commentary .01(a)(B) to NYSE Arca Equities Rule 
5.2(j)(3) applicable to listing of ICUs based on international or 
global indexes. The Index meets all such requirements except for those 
set forth in Commentary .01(a)(B)(3).\6\ The Exchange represents that: 
(1) Except for the requirement under Commentary .01(a)(B)(3) to NYSE 
Arca Equities Rule 5.2(j)(3) that the five most heavily weighted 
component stocks shall not exceed 60% of the weight of the Index, the 
Shares of the Fund currently satisfy all of the generic listing 
standards under NYSE Arca Equities Rule 5.2(j)(3); (2) the continued 
listing standards under NYSE Arca Equities Rules 5.2(j)(3) and 
5.5(g)(2) applicable to ICUs shall apply to the Shares; and (3) the 
Trust is required to comply with Rule 10A-3 \7\ under the Act for the 
initial and continued listing of the Shares. In addition, the Exchange 
represents that the Shares will comply with all other requirements 
applicable to ICUs including, but not limited to, requirements relating 
to the dissemination of key information such as the Index value and 
Intraday Indicative Value, rules governing the trading of equity 
securities, trading hours, trading halts, surveillance,\8\ and 
Information Bulletin to ETP Holders, as set forth in Exchange rules 
applicable to ICUs and in prior Commission orders approving the generic 
listing rules applicable to the listing and trading of ICUs.\9\
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    \6\ The Exchange states that the Index satisfies the first 
requirement under Commentary .01(a)(B)(3) to NYSE Arca Equities Rule 
5.2(j)(3) that the most heavily weighted component stock shall not 
exceed 25% of the weight of the index or portfolio. However, the 
Index fails to meet the second requirement of Commentary 
.01(a)(B)(3) to NYSE Arca Equities Rule 5.2(j)(3) that the five most 
heavily weighted component stocks shall not exceed 60% of the weight 
of the Index. The Exchange states that, as of September 22, 2008, 
the five most heavily weighted component stocks represented 60.616% 
of the Index weight.
    \7\ 17 CFR 240.10A-3.
    \8\ The Exchange may obtain information for surveillance 
purposes via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members of ISG. For a list of the current members 
of ISG, see http://www.isgportal.org. The Exchange does not have in 
place a comprehensive surveillance sharing agreement with the Borsa 
Italiana and such exchange is not an ISG member.
    \9\ See, e.g., Securities Exchange Act Release No. 55621 (April 
12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86) (order 
approving generic listing standards for ICUs based on international 
or global indexes); Securities Exchange Act Release No. 44551 (July 
12, 2001), 66 FR 37716 (July 19, 2001) (SR-PCX-2001-14) (order 
approving generic listing standards for ICUs and Portfolio 
Depositary Receipts); Securities Exchange Act Release No. 41983 
(October 6, 1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) 
(order approving rules for listing and trading of ICUs).
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    Detailed descriptions of the Fund, the Index, procedures for 
creating and redeeming Shares, transaction fees and expenses, 
dividends, distributions, taxes, and reports to be distributed to 
beneficial owners of the Shares can be found in the Trust's 
Registration Statement \10\ or on the Web site for the Fund (http://
www.netsetfs.com), as applicable.
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    \10\ See the Trust's Registration Statement on Form N-1A, dated 
March 17, 2008, and supplement thereto dated September 3, 2008 (File 
Nos. 333-147077 and 811-22140).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
and furthers the objectives of Section 6(b)(5) of the Act,\11\ in that 
it is designed to prevent fraudulent and manipulative practices, to 
promote just and equitable principles of trade, to remove impediments 
to, and perfect the mechanisms of, a free and open market and a 
national market system, and, in general, to protect investors and the 
public interest. The proposed rule change will allow the listing and 
trading of the Fund on the Exchange, which the Exchange believes will 
be to the benefit of investors and the marketplace.
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    \11\ 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 purpose 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

    The Exchange has designated the proposed rule change as one that: 
(i) Does not significantly affect the protection of investors or the 
public interest; (ii) does not impose any significant burden on 
competition; and (iii) by its terms, does not become operative for 30 
days from the date on

[[Page 64651]]

which it was filed, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest. Therefore, the foregoing proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative until 30 days after the date of filing.\14\ 
However, Rule 19b-4(f)(6)(iii) \15\ 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 so that it can list and 
trade the Shares immediately. The Exchange states that the proposed 
rule change does not significantly affect the protection of investors 
or the public interest and does not impose any significant burden on 
competition. The Exchange also believes that the proposal is non-
controversial because, although the Underlying Index fails to meet the 
requirement set forth in Commentary .01(a)(B)(3) to NYSE Arca Equities 
Rule 5.2(j)(3) that the five most heavily weighted component stocks not 
exceed 60% of the weight of the Index by a small amount (0.616%), the 
Shares currently satisfy all of the other applicable generic listing 
standards under NYSE Arca Equities Rule 5.2(j)(3) and all other 
requirements applicable to ICUs as set forth in Exchange Rules and 
prior Commission orders approving the generic listing rules applicable 
to the listing and trading of ICUs.
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    \14\ Id. In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its 
intent to file 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 
satisfied this requirement.
    \15\ 15 17 CFR 240.19b-4(f)(6).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\16\ Given that the Shares comply with all of the NYSE Arca 
Equities generic listing standards for ICUs (except for narrowly 
missing the requirement that the five most heavily weighted component 
stocks not exceed 60% of the weight of the Index), the listing and 
trading of the Shares by NYSE Arca does not appear to present any novel 
or significant regulatory issues or impose any significant burden on 
competition. For these reasons, the Commission designates the proposed 
rule change as operative upon filing.
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    \16\ 16 For 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).
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    At any time within 60 days of the filing of the 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-NYSEArca-2008-112 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-112. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-2008-112 and should be submitted on or before November 20, 
2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-25924 Filed 10-29-08; 8:45 am]

BILLING CODE 8011-01-P