Document ID: SEC-2007-0252-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-02-20T05:00Z

[Federal Register: February 20, 2007 (Volume 72, Number 33)]
[Notices]               
[Page 7793-7804]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20fe07-35]                         

[[Page 7793]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55268; File No. SR-NYSE-2007-03]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change and Amendment Nos. 1 and 2 Thereto Regarding CurrencyShares 
SM Japanese Yen Trust

February 9, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 9, 2007, the New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II, below, which Items have been prepared by the Exchange. 
On January 26, 2007, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ On February 1, 2007, the Exchange filed Amendment No. 2 
to the proposed rule change. The Commission is publishing this notice 
to solicit comments on the proposed rule change, as amended, from 
interested persons, and is granting accelerated approval to the 
proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced the original filing in its 
entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE proposes to list and trade the following under Rules 1300A 
et seq. (``Currency Trust Shares'' or ``Shares''): CurrencyShares 
SM Japanese Yen Trust (``Trust''). The Trust issues Shares 
that represent units of fractional undivided beneficial interest in and 
ownership of the Trust.

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. 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 Trust issues Japanese Yen Shares, referred to herein as 
``Shares''. Rydex Specialized Products LLC is the sponsor of the Trust 
(``Sponsor''), The Bank of New York is the trustee of the Trust 
(``Trustee''), JPMorgan Chase Bank, N.A., London Branch, is the 
depository for the Trust (``Depository''), and Rydex Distributors, Inc. 
is the distributor for the Trust (``Distributor''). The Sponsor, 
Trustee, Depository and Distributor are not affiliated with the 
Exchange or one another, with the exception that the Sponsor and 
Distributor are affiliated. The Exchange currently lists and trades 
Shares of the Euro Currency Trust; CurrencyShares SM 
Australian Dollar Trust; CurrencyShares SM British Pound 
Sterling Trust; CurrencyShares SM Canadian Dollar Trust; 
CurrencyShares SM Mexican Peso Trust; CurrencyShares 
SM Swedish Krona Trust; and CurrencyShares SM 
Swiss Franc Trust (``CurrencyShares Trusts''), all of which have the 
same Sponsor, Trustee, Depository and Distributor as the Trust.\4\
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    \4\ See Securities Exchange Act Release Nos. 52843 (November 28, 
2005), 70 FR 72486 (December 5, 2005) (SR-NYSE-2005-65); and 54020 
(June 20, 2006), 71 FR 36579, (June 27, 2006) (SR-NYSE-2006-35).
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    According to the Trust's Registration Statement,\5\ the investment 
objective of the Trust is for the Shares issued by the Trust to reflect 
the price of the Japanese Yen. The Shares are intended to provide 
institutional and retail investors with a simple, cost-effective means 
of hedging their exposure to Japanese Yen and otherwise implement 
investment strategies that involve foreign currency (e.g., diversify 
more generally against the risk that the U.S. Dollar (``USD'') will 
depreciate).
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    \5\ The Sponsor, on behalf of the Trust, filed a Form S-1 for 
the Trust on November 21, 2006 (the ``Registration Statement''). See 
Registration No. 333-138881.
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Overview of the Foreign Exchange Industry \6\
    According to the Registration Statement, the foreign exchange 
market is the largest and most liquid financial market in the world. 
The Exchange states that, as of April 2004, the foreign exchange market 
experienced average daily turnover of approximately $1.88 trillion, 
which was a 57% increase (at current exchange rates) from 2001 daily 
averages. The foreign exchange market is predominantly an over-the-
counter market, with no fixed location and it operates 24 hours a day, 
seven days a week. London, New York and Tokyo are the principal 
geographic centers of the worldwide foreign exchange market, with 
approximately 58% of all foreign exchange business executed in the 
U.K., U.S., and Japan. Other smaller markets include Singapore, Zurich 
and Frankfurt.\7\
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    \6\ Except as otherwise specifically noted, the information 
provided in this Form 19b-4 filing relating to the Shares, foreign 
currency markets, movements in foreign currency pricing, and related 
information is based entirely on information included in the 
Registration Statement.
    \7\ For April 2004, the daily average foreign exchange turnover 
of the U.S. dollar against the Japanese Yen was approximately $296 
billion. See Bank for International Settlements, Triennial Central 
Bank Survey, March 2005, Statistical Annex Tables, Table E-2. In 
April 2004, the daily average foreign exchange turnover in USD of 
the Japanese Yen against all other currencies was approximately $359 
billion. See Statistical Annex Tables, Table E-1.
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    The Exchange states that there are three major kinds of 
transactions in the traditional foreign exchange markets: spot 
transactions, outright forwards and foreign exchange swaps. ``Spot'' 
trades are foreign exchange transactions that settle typically within 
two business days with the counterparty to the trade. Spot transactions 
account for approximately 35% of reported daily volume in the 
traditional foreign exchange markets. ``Forward'' trades, which are 
transactions that settle on a date beyond spot, account for 12% of the 
reported daily volume, ``Swap'' transactions, in which two parties 
exchange two currencies on one or more specified dates over an agreed 
period and exchange them again when the period ends, account for the 
remaining 53% of volume. There also are transactions in currency 
options, which trade both over-the-counter and, in the U.S., on the 
Philadelphia Stock Exchange (``Phlx''). Currency futures are 
transactions in which an institution buys or sells a standardized 
amount of foreign currency on an organized exchange for delivery on one 
of several specified dates. Currency futures are traded on a number of 
regulated markets, including the International Monetary Market division 
of the Chicago Mercantile Exchange (``CME''), the Singapore Exchange 
Derivatives Trading Limited (``SGX,'' formerly the Singapore 
International Monetary Exchange or SIMEX), and the London International 
Financial Futures Exchange (``LIFFE''). Over 85% of currency derivative 
products (swaps, options and futures) are traded over-the-counter.\8\
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    \8\ See Bank for International Settlements, Triennial Central 
Bank Survey of Foreign Exchange and Derivatives Market Activity in 
April 2004, September 2004 (Tables 2 and 6).

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[[Page 7794]]

    Futures on Japanese Yen are traded on the CME (both exchange pit 
trading and GLOBEX trading). Standardized options on the Japanese Yen 
trade on Phlx. Phlx also offers more customized options on certain 
currency pairs.\9\
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    \9\ For the period January through October, 2006, Japanese Yen 
and E-mini Japanese Yen futures contract volume on the CME was 
15,687,056 and 7,629 contracts, respectively. For the same period, 
Japanese Yen options volume on the Phlx was 3,228 contracts.
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    According to the Exchange, participants in the foreign exchange 
market have various reasons for participating. Multinational 
corporations and importers need foreign currency to acquire materials 
or goods from abroad. Banks and multinational corporations sometimes 
require specific wholesale funding for their commercial loan or other 
foreign investment portfolios. Some participants hedge open currency 
exposure through off-balance-sheet products.
    The Exchange further represents that the primary market 
participants in foreign exchange are banks (including government-
controlled central banks), investment banks, money managers, 
multinational corporations and institutional investors. The most 
significant participants are the major international commercial banks 
that act both as brokers and as dealers. In their dealer role, these 
banks maintain long or short positions in a currency and seek to profit 
from changes in exchange rates. In their broker role, the banks handle 
buy and sell orders from commercial customers, such as multinational 
corporations. The banks earn commissions when acting as agent. They 
profit from the spread between the rates at which they buy and sell 
currency for customers when they act as principal.
    Typically, banks engage in transactions ranging from $5 million to 
$50 million in amount. Although banks will engage in smaller 
transactions, the fees that they charge have made the foreign currency 
markets relatively inaccessible to individual investors. Some banks 
allow individual investors to engage in spot trades without paying 
traditional commissions on the trades. Such trading is often not 
profitable for individual investors, however, because the banks charge 
the investor the spread between the bid and the ask price maintained by 
the bank on all purchases and sales. The overall effect of this fee 
structure depends on the spread maintained by the bank and the 
frequency with which the investor trades. Generally this fee structure 
is particularly disadvantageous to active traders.
    The Trust's assets will consist only of Japanese Yen on demand 
deposit in two Japanese Yen-denominated accounts at JPMorgan Chase 
Bank, N.A., London Branch; an interest-bearing primary deposit account 
and a non-interest bearing secondary account. The Trust will not hold 
any derivative products. Each Share represents a proportional interest, 
based on the total number of Shares outstanding, in the Japanese Yen 
owned by the Trust, plus accrued and unpaid interest less accrued but 
unpaid expenses (both asset-based and non-asset based) of the Trust. 
The Sponsor expects that the price of a Share will fluctuate in 
response to fluctuations in the price of the Japanese Yen and that the 
price of a Share will reflect accumulated interest as well as the 
estimated accrued but unpaid expenses of the Trust.
    Because the Shares will be traded on the NYSE, investors will be 
able to access the Japanese Yen foreign currency market through a 
traditional brokerage account which will provide investors with an 
efficient means of implementing investment tactics and strategies that 
involve Japanese Yen.

Foreign Currency Regulation

    Most trading in the global over-the-counter (OTC) foreign currency 
markets is conducted by regulated financial institutions such as banks 
and broker-dealers. In addition, in the United States, the Foreign 
Exchange Committee of the New York Federal Reserve Bank has issued 
Guidelines for Foreign Exchange Trading, and central-bank sponsored 
committees in Japan and Singapore have published similar best practice 
guidelines. In the United Kingdom, the Bank of England has published 
the Non-Investment Products Code, which covers foreign currency 
trading. The Financial Markets Association, whose members include major 
international banking organizations, has also established best 
practices guidelines called the Model Code.
    Participants in the U.S. OTC market for foreign currencies are 
generally regulated by their oversight regulators. For example, 
participating banks are regulated by the banking authorities. In 
addition, in the U.S., the SEC regulates trading of options on foreign 
currencies on the Phlx and the Commodity Futures Trading Commission 
(``CFTC'') regulates trading of futures, and options on futures on 
foreign currencies on regulated futures exchanges.\10\
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    \10\ The CFTC is an independent government agency with the 
mandate to regulate commodity futures and options markets in the 
United States under the Commodity Exchange Act. In addition to its 
oversight of regulated futures exchanges, the CFTC has jurisdiction 
over certain foreign currency futures, and options on futures 
transactions occurring other than on a regulated exchange and 
involving retail customers. Both the SEC and CFTC have established 
rules designed to prevent market manipulation, abusive trading 
practices and fraud, as do the exchanges on which the foreign 
currency products trade.
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    The Exchange states that the Phlx and CME have authority to perform 
surveillance on their members' trading activities, review positions 
held by members and large-scale customers, and monitor the price 
movements of options and/or futures markets by comparing them with cash 
and other derivative markets' prices.

Foreign Exchange Markets \11\

    The Exchange represents that the average daily turnover of the USD 
in the foreign exchange market is approximately $1.57 trillion, which 
makes it the most-traded currency in the world, accounting for 
approximately 89% of global foreign exchange transactions.
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    \11\ The primary source of the statistical information in this 
section is the Bank of International Settlements Survey, note 7, 
supra. Other information came from the websites of the central banks 
for the applicable countries and other sources the Sponsor believes 
to be reliable.
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    The Japanese Yen is the official currency of Japan and the currency 
of the Bank of Japan, the central bank of Japan. The average daily 
turnover in the foreign exchange markets is approximately $1.9 
trillion. Japanese Yen was on one side of 20% of all currency 
transactions. The USD/Japanese Yen pair has an average daily turnover 
of approximately $296 billion, which makes it the second most traded 
currency pair, accounting for approximately 17% of global foreign 
exchange transactions. From the beginning of 2002 to the end of 2005, 
the Noon Buying Rate for Japanese Yen as reported by the Federal 
Reserve Bank of New York ranged from 102.50 on January 14, 2005 to 
134.71 on February 8, 2002. As of November 20, 2006, the Noon Buying 
Rate for the Japanese Yen was 118.16.

The Sponsor

    The Sponsor of the Trust is Rydex Specialized Products LLC, a 
Delaware limited liability company that is wholly-owned by PADCO 
Advisors II, Inc., a Maryland corporation, a privately-held company 
owned by Rydex Holdings, Inc., a Maryland Corporation, which is

[[Page 7795]]

controlled by two irrevocable trusts. The Sponsor and its affiliates 
collectively do business as ``Rydex Investments.''
    The Sponsor is responsible for establishing the Trust and for the 
registration of the Shares. The Sponsor generally oversees the 
performance of the Trustee and the Trust's principal service providers, 
but does not exercise day-to-day oversight over the Trustee or such 
service providers. The Sponsor regularly communicates with the Trustee 
to monitor the overall performance of the Trust. The Sponsor, with 
assistance and support from Rydex affiliates who also do business as 
``Rydex Investments,'' the Trustee and outside professionals, are 
responsible for preparing and filing periodic reports on behalf of the 
Trust with the SEC.\12\ The Sponsor will designate the auditors of the 
Trust and may from time to time employ legal counsel for the Trust.
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    \12\ The Sponsor has obtained a no-action letter from the SEC 
Division of Corporation Finance with respect to the Euro Currency 
Trust pursuant to which the Sponsor's principal executive officer 
and principal financial officer will provide any certifications that 
are required from a ``registrant's'' principal executive officer and 
principal financial officer. See No-Action Letter from Charles Kwon, 
Special Counsel, Division of Corporation Finance, Commission, dated 
March 22, 2006. The Sponsor will be requesting the same type of no-
action ruling for the Trust.
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    The Distributor is assisting the Sponsor in developing a marketing 
plan for the Trust, preparing marketing materials on the Shares, 
executing the marketing plan for the Trust and providing strategic and 
tactical research on the global foreign exchange markets. The Sponsor 
will not enter into an agreement with the Distributor covering these 
services, because the Distributor is an affiliate and will not be paid 
any compensation by the Sponsor for performing these services.
    The Sponsor with the Distributor's assistance maintains a public 
Web site on behalf of the Trust, http://www.currencyshares.com, which contains 

information about the Trust and the Shares, and oversees certain 
Shareholder services, such as a call center and prospectus delivery.
    The Sponsor may direct the Trustee in the conduct of its affairs, 
but only as provided in the Depositary Trust Agreement. For example, 
the Sponsor may direct the Trustee to sell Japanese Yen to pay certain 
extraordinary expenses, to suspend a redemption order, postpone a 
redemption settlement date, or to terminate the Trust if certain 
criteria are met. The Sponsor anticipates that, if the market 
capitalization of the Trust is less than $300 million for five 
consecutive trading days beginning after the first anniversary of the 
Trust's inception, then the Sponsor will, in accordance with the 
Depositary Trust Agreement, direct the Trustee to terminate and 
liquidate the Trust.
    The Sponsor's fee accrues daily at an annual nominal rate of 0.40% 
of the Japanese Yen in the Trust (including all unpaid interest but 
excluding unpaid fees, each as accrued through the immediately 
preceding day) and is paid monthly.

The Trustee

    The Bank of New York, the Trustee, is generally responsible for the 
day-to-day administration of the Trust, including keeping the Trust's 
operational records. The Trustee's principal responsibilities include 
selling Japanese Yen held by the Trust if needed to pay the Trust's 
expenses, calculating the Net Asset Value (``NAV'') of the Trust and 
the NAV per Share, receiving and processing orders from Authorized 
Participants to create and redeem Baskets (as discussed below) and 
coordinating the processing of such orders with the Depository and DTC. 
The Trustee will earn a monthly fee that will be paid by the Sponsor.
    The Trustee intends to regularly communicate with the Sponsor to 
monitor the over-all performance of the Trust. The Trustee, along with 
the Sponsor, consults with the Trust's legal, accounting and other 
professional service providers as needed. The Trustee assists and 
supports the Sponsor with the preparation of all periodic reports 
required to be filed with the SEC on behalf of the Trust.
    Affiliates of the Trustee may from time to time act as Authorized 
Participants, purchase or sell foreign currency, or Shares for their 
own account.

The Depository

    JPMorgan Chase Bank, N.A., London Branch (the ``Bank'') is the 
Depository. The Depository accepts Japanese Yen deposited with it as a 
banker by Authorized Participants in connection with the creation of 
Baskets. The Depository facilitates the transfer of Japanese Yen into 
and out of the Trust through the primary and secondary deposit accounts 
maintained with it as a banker by the Trust.
    The Depository will pay interest on the primary deposit account. 
Interest on the primary deposit account accrues daily at an initial 
annual nominal rate of the Bank of Japan Overnight Call Rate minus 27 
basis points, and is paid monthly. Each month the Depository will 
deposit into the secondary deposit account accrued but unpaid interest.
    The Depository will not be paid a fee for its services to the 
Trust. The Depository may earn a ``spread'' or ``margin'' over the rate 
of interest it pays to the Trust on the Japanese Yen deposit balances.
    The Depository is not a trustee for the Trust or the Shareholders. 
The Depository and its affiliates may from time to time act as 
Authorized Participants or purchase or sell Japanese Yen or Shares for 
their own account, as agent for their customers and for accounts over 
which they exercise investment discretion.

The Distributor

    Rydex Distributors, Inc. is the Distributor. The Distributor is a 
registered broker-dealer with the SEC and is a member of NASD.
    The Distributor is assisting the Sponsor in developing a marketing 
plan for the Trust on an ongoing basis, preparing marketing materials 
regarding the Shares, including the content on the Trust's Web site, 
http://www.currencyshares.com, executing the marketing plan for the Trust, and 

providing strategic and tactical research on the global foreign 
exchange market. The Distributor and the Sponsor are affiliates of one 
another. There is no written agreement between them, and no 
compensation is paid by the Sponsor to the Distributor in connection 
with services performed by the Distributor for the Trust.

Description of the Trust

    According to the Registration Statement for the Trust, the Trust 
will be formed under the laws of the State of New York as of the date 
the Sponsor and the Trustee sign the Depositary Trust Agreement and the 
Initial Purchaser makes the initial deposit for the issuance of three 
Baskets. A Basket is a block of 50,000 Shares. The Trust holds Japanese 
Yen \13\ and is expected

[[Page 7796]]

from time to time to issue Baskets in exchange for deposits of Japanese 
Yen and to distribute Japanese Yen in connection with redemptions of 
Baskets. The investment objective of the Trust is for the Shares to 
reflect the price USD of Japanese Yen. The Shares represent units of 
fractional undivided beneficial interest in, and ownership of, the 
Trust. The Trust is not managed like a business corporation or an 
active investment vehicle. Japanese Yen held by the Trust will only be 
sold: (1) If needed to pay Trust expenses, (2) in the event the Trust 
terminates and liquidates its assets or (3) as otherwise required by 
law or regulation. The sale of Japanese Yen by the Trust is a taxable 
event to Shareholders.
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    \13\ The Exchange notes that, in addition to the CurrencyShares 
Trusts (See note 4, supra), the Commission has previously permitted 
the listing of securities products for which the underlying was a 
commodity or otherwise was not a security trading on a regulated 
market. See, e.g., Securities Exchange Act Release Nos. 54013 (June 
16, 2006), 71 FR 36372 (June 26, 2006) (approving listing of iShares 
[supreg] GSCI Commodity Indexed Trust); 50603 (October 28, 2004), 69 
FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (approving listing and 
trading on NYSE of StreetTRACKS [supreg] Gold Shares); 19133 
(October 14, 1982), 47 FR 46946 (October 21, 1982) (SR-Phlx-81-4) 
(approving the listing of standardized options on foreign 
currencies); 36505 (November 22, 1995), 60 FR 61277 (November 29, 
1995) (SR-Phlx-95-42) (approving the listing of dollar-denominated 
delivery foreign currency options on the Japanese Yen); and 36165 
(August 29, 1995), 60 FR 46653 (September 7, 1995) (SR-NYSE-94-41) 
(approving listing standards for, among other things, currency and 
currency index warrants).
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    According to the Registration Statement, the Trust is not 
registered as an investment company under the Investment Company Act 
and is not required to register under such Act.
    The Trust's assets will consist only of Japanese Yen on demand 
deposit in two Japanese Yen-denominated accounts at JPMorgan Chase 
Bank, N.A., London Branch; an interest-bearing primary deposit account 
and a non-interest bearing secondary account. The Trust will not hold 
any derivative products. Each Share represents a proportional interest, 
based on the total number of Shares outstanding, in Japanese Yen owned 
by the Trust, plus accrued but unpaid interest, less the estimated 
accrued but unpaid expenses (both asset-based and non-asset based) of 
the Trust. The Sponsor expects that the price of a Share will fluctuate 
in response to fluctuations in the price of Japanese Yen and that the 
price of a Share will reflect accumulated interest as well as the 
estimated accrued but unpaid expenses of the Trust.
    Investors may obtain, 24 hours a day, foreign exchange pricing 
information based on the spot price of Japanese Yen from various 
financial information service providers. Current spot prices are also 
generally available with bid/ask spreads from foreign exchange dealers. 
In addition, the Trust's Web site will provide ongoing pricing 
information for Japanese Yen spot prices and the Shares. Market prices 
for the Shares are available from a variety of sources, including 
brokerage firms, financial information Web sites and other information 
service providers. One such Web site is hosted by Bloomberg, http://www.bloomberg.com/markets/currencies/asiapac_currencies.html
, and it 

regularly reports current foreign exchange pricing information. The NAV 
of the Trust is published by the Sponsor on each day that the NYSE is 
open for regular trading and will be posted on the Trust's Web site.
    The Trust will terminate upon the occurrence of any of the 
termination events listed in the Depositary Trust Agreement and will 
otherwise terminate on February 1, 2047.
    The Sponsor, on behalf of the Trust, will rely on relief previously 
granted by the Division of Market Regulation \14\ from certain trading 
requirements of the Act.\15\ The Sponsor also intends to request 
guidance from the Commission on the application of the certification 
rules for quarterly and annual reports adopted pursuant to Section 302 
of the Sarbanes-Oxley Act of 2002. In addition, the Trust will not be 
subject to the Exchange's corporate governance requirements, including 
the Exchange's audit committee requirements.\16\
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    \14\ See letter from Racquel L. Russell, Branch Chief, SEC 
Division of Market Regulation, to George T. Simon, Foley & Lardner, 
dated June 21, 2006 (``June 21, 2006 letter'') (granting relief from 
certain rules under the Act for the CurrencyShares Trusts); letter 
from James A. Brigagliano, Assistant Director, SEC Division of 
Market Regulation to Michael Schmidtberger, Sidley, Austin, Brown & 
Wood, dated January 19, 2006 (``January 19, 2006 Letter'') (granting 
relief from certain rules under the Act for the DB Commodity Index 
Tracking Master Fund). The Sponsor is relying on the June 21, 2006 
Letter regarding Rule 10a-1, Rule 200(g) of Regulation SHO, and 
Rules 101 and 102 of Regulation M under the Act, and is relying on 
the January 19, 2006 Letter regarding Section 11(d)(1) of the Act 
and Rule 11d1-2 thereunder.
    \15\ See infra note 30.
    \16\ See Securities Exchange Act Release No. 48745 (November 4, 
2003), 68 FR 64154 (November 12, 2003) (SR-NYSE-2002-33, SR-NASD-
2002-77, et al.) (specifically 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 25, 2003), 68 FR 18787 (April 16, 2003) 
(noting in Section II(F)(3)(c) that ``SROs may exclude from Exchange 
Act 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 (as well as 
administering and distributing amounts in respect of) securities, 
rights, collateral or other assets on behalf of or for the benefit 
of the holders of the listed securities.'')
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Trust's Expenses

    The Trust's only ordinary recurring expense is expected to be the 
Sponsor's fee. The Sponsor is obligated under the Depositary Trust 
Agreement to pay the following administrative and marketing expenses 
for the Trust: the Trustee's monthly fee, the Distributor's fee, NYSE 
listing fees, SEC registration fees, printing and mailing costs, audit 
fees and expenses and up to $100,000 per annum in legal fees and 
expenses. The Sponsor is also obligated to pay the costs of the Trust's 
organization and the costs of the initial sale of the Shares, including 
the applicable SEC registration fees.
    The Sponsor's fee accrues daily at an annual nominal rate of 0.40% 
of the Japanese Yen in the Trust. Each month, the Trust will first 
withdraw Japanese Yen the Trust has earned as interest to pay the 
Sponsor's fee and any other Trust expenses that have been incurred. If 
that interest is not sufficient to fully pay the Sponsor's fee and 
Trust expenses, then the Trustee will withdraw Japanese Yen from the 
primary deposit account as needed. If the Trust incurs expenses in USD 
(which is not anticipated), Japanese Yen will be converted to USD at 
the prevailing market rate at the time of conversion to pay expenses.
    In certain exceptional cases the following expenses may be charged 
to the Trust in addition to the Sponsor's fee: (1) Expenses and costs 
of any extraordinary services performed by the Trustee or the Sponsor 
on behalf of the Trust or action taken by the Trustee or the Sponsor to 
protect the Trust or interests of Shareholders; (2) indemnification of 
the Sponsor; (3) taxes and other governmental charges; and (4) expenses 
of the Trust other than those the Sponsor is obligated to pay pursuant 
to the Depositary Trust Agreement, including legal fees and expenses 
over $100,000. If these additional expenses are incurred, the Trust 
will be required to pay these expenses by withdrawing deposited 
Japanese Yen and the amount of Japanese Yen represented by a Share will 
decline at such time. Accordingly, the Shareholders will effectively 
bear the cost of these other expenses, if incurred.
    In order to pay the Trust's expenses, the Trustee will first 
withdraw Japanese Yen the Trust has earned as interest. In the event 
the Sponsor's fee and any other Trust expenses exceed the interest 
earned, additional Japanese Yen will be withdrawn from the primary 
deposit account as required to cover the expenses. For expenses not 
payable in Japanese Yen, the Trustee will direct that Japanese Yen be 
converted to USD as necessary for the Trustee to pay the Trust's 
expenses. The Trustee will direct that the smallest amount of Japanese 
Yen required to purchase amounts of U.S. Dollars sufficient to pay 
Trust expenses and the costs of currency conversion be withdrawn from 
the Trust.

Liquidity

    The amount of the discount or premium in the trading price relative 
to the NAV per Share may be influenced

[[Page 7797]]

by non-concurrent trading hours between the major foreign currency 
markets and the NYSE. The period of greatest liquidity in the Japanese 
Yen market is typically that time of the day when trading in the 
European time zones or Japan overlaps with trading in the United 
States, which is when OTC market trading in London, New York, and other 
centers coincides with futures and options trading on those currencies. 
While the Shares will trade on the NYSE until 4:15 p.m. (New York 
time), liquidity in the OTC market for the Japanese Yen will be 
slightly reduced after the close of the London foreign currency markets 
and before the opening of the Tokyo foreign currency market. Because of 
the potential for arbitrage inherent in the structure of the Trust, the 
Sponsor believes that the Shares will not trade at a material discount 
or premium to the value of underlying currency held by the Trust. The 
arbitrage process, which in general provides investors the opportunity 
to profit from differences in prices of assets, increases the 
efficiency of the markets, serves to prevent potentially manipulative 
efforts and can be expected to operate efficiently in the case of the 
Shares and Japanese Yen. If the price of the Shares deviates enough 
from the price of Japanese Yen to create a material discount or 
premium, an arbitrage opportunity is created. If the Shares are 
inexpensive compared to Japanese Yen, an Authorized Participant, either 
on its own behalf or acting as agent for investors, arbitrageurs or 
traders, may buy the Shares at a discount, immediately redeem them in 
exchange for Japanese Yen and sell Japanese Yen in the cash market at a 
profit. If the Shares are expensive compared to Japanese Yen that 
underlies them, an Authorized Participant may sell the Shares short, 
buy enough Japanese Yen to create the number of Shares sold short, 
acquire the Shares through the creation process and deliver the Shares 
to close out the short position.\17\ In both instances the arbitrageur 
serves efficiently to correct price discrepancies between the Shares 
and Japanese Yen.
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    \17\ The Exchange notes that the Trust, which will only hold 
Japanese Yen as an asset in the normal course of its operations, 
differs from index-based exchange-traded funds, which may involve a 
trust holding hundreds or even thousands of underlying component 
securities, necessarily involving in the arbitrage process movements 
in a large number of security positions. See, e.g., Securities 
Exchange Act Release No. 46306 (August 2, 2002), 67 FR 51916 (August 
9, 2002) (SR-NYSE-2002-28) (approving the UTP trading of Vanguard 
Total Market VIPERs based on the Wilshire 5000 Total Market Index).
---------------------------------------------------------------------------

Description of the Shares

    According to the Registration Statement, the Shares are not a 
traditional investment. They are dissimilar from the ``shares'' of a 
corporation operating a business enterprise, with management and a 
board of directors. Trust Shareholders do not have rights normally 
associated with owning shares of a business corporation, including, for 
example, the right to bring ``oppression'' or ``derivative'' actions. 
Shareholders have only those rights explicitly set forth in the 
Depositary Trust Agreement. All Shares are of the same class with equal 
rights and privileges. Each Share is transferable, is fully paid and 
non-assessable and entitles the holder to vote on the limited matters 
upon which Shareholders may vote under the Depositary Trust Agreement. 
The Shares do not entitle their holders to any conversion or pre-
emptive rights or, except as provided in the Registration Statement, 
any redemption or distribution rights.

Distributions

    Each month the Depository will deposit into the secondary deposit 
account accrued but unpaid interest and the Trustee will withdraw 
Japanese Yen from the secondary deposit account to pay the accrued 
Sponsor's fee for the previous month plus other Trust expenses, if any. 
In the event the Sponsor's fee and any other Trust expenses exceed the 
interest earned on the primary deposit account, additional Japanese Yen 
will be withdrawn from the primary deposit account as required to cover 
the expenses. In the event that the interest deposited exceeds the sum 
of the Sponsor's fee for the prior month plus other Trust expenses, if 
any, then the Trustee will direct that the excess be converted into 
U.S. Dollars at a prevailing market rate and the Trustee will 
distribute the U.S. Dollars as promptly as practicable to Shareholders 
on a pro rata basis (in accordance with the number of Shares that they 
own).

Fees and Expenses

    Under the Deposit Account Agreement, the Depository is entitled to 
invoice the Trustee or debit the secondary deposit account for out-of-
pocket expenses. The Trust has also agreed to reimburse the Depository 
for any taxes, levies, imposts, deductions, charges, stamp, transaction 
and other duties and withholdings in connection with the Deposit 
Accounts, except for such items imposed on the overall net income of 
the Depository. Except for the reimbursable expenses just described, 
the Depository will not be paid a fee for its services to the Trust. 
The Depository may earn a ``spread'' or ``margin'' on the Japanese Yen 
deposit balances it holds.

Voting and Approvals

    Shareholders have no voting rights under the Depositary Trust 
Agreement, except in limited circumstances. If the holders of at least 
25% of the Shares outstanding for the Trust determine that the Trustee 
is in material breach of its obligations under the Depositary Trust 
Agreement, they may provide written notice to the Trustee (or require 
the Sponsor to do so) specifying the default and requiring the Trustee 
to cure such default. If the Trustee fails to cure such breach within 
30 days after receipt of the notice, the Sponsor, acting on behalf of 
the Registered Owners, may remove the Trustee for the Trust. The 
holders of at least 66\2/3\% of the Shares outstanding may vote to 
remove the Trustee. The Trustee must terminate the Trust at the request 
of the holders of at least 75% of the outstanding Shares.

Book-Entry Form

    The Sponsor and the Trustee will apply to DTC for acceptance of the 
Shares in its book-entry settlement system. If the Shares are eligible 
for book-entry settlement, all Shares will be evidenced by global 
certificates issued by the Trustee to DTC and registered in the name of 
Cede & Co., as nominee for DTC. The global certificates will evidence 
all of the Shares outstanding at any time. In order to transfer Shares 
through DTC, Shareholders must be DTC Participants. The Shares will be 
transferable only through the book-entry system of DTC. A Shareholder 
that is not a DTC Participant will be able to transfer its Shares 
through DTC by instructing the DTC Participant holding its Shares. 
Transfers will be made in accordance with standard securities industry 
practice.

Issuance of the Shares

    The Trust creates and redeems Shares in Baskets on a continuous 
basis. A Basket is a block of 50,000 Shares. The creation and 
redemption of Baskets requires the delivery to the Trust or the 
distribution by the Trust of the amount of Japanese Yen represented by 
the Baskets being created or redeemed. This amount is based on the 
combined NAV per Share of the number of Shares included in the Baskets 
being created or redeemed, determined on the day the order to create or 
redeem Baskets is accepted by the Trustee.
    Authorized Participants are the only persons that may place orders 
to create and redeem Baskets. An Authorized

[[Page 7798]]

Participant is a DTC Participant that is a registered broker-dealer or 
other securities market participant such as a bank or other financial 
institution that is not required to register as a broker-dealer to 
engage in securities transactions and has entered into a Participant 
Agreement with the Trustee. Only Authorized Participants may place 
orders to create or redeem Baskets. Before initiating a creation or 
redemption order, an Authorized Participant must have entered into a 
Participant Agreement with the Sponsor and the Trustee. The Participant 
Agreement provides the procedures for the creation and redemption of 
Baskets and for the delivery of foreign currency required for creations 
and redemptions. The Participant Agreements may be amended by the 
Trustee, the Sponsor and the relevant Authorized Participant. 
Authorized Participants pay a transaction fee of $500 to the Trustee 
for each order that they place to create or redeem one or more Baskets. 
Authorized Participants who make deposits with the Trust in exchange 
for Baskets receive no fees, commissions or other form of compensation 
or inducement of any kind from either the Sponsor or the Trust. No 
Authorized Participant has any obligation or responsibility to the 
Sponsor or the Trust to effect any sale or resale of Shares.
    Certain Authorized Participants are expected to have the facility 
to participate directly in the global foreign exchange market. In some 
cases, an Authorized Participant may acquire foreign currency from, or 
sell foreign currency to, an affiliated foreign exchange trading desk, 
which may profit in these instances. The Sponsor believes that the size 
and operation of the foreign exchange market make it unlikely that an 
Authorized Participant's direct activities in the foreign exchange and 
securities markets will impact the price of Japanese Yen or the price 
of Shares. Each Authorized Participant will be registered as a broker-
dealer under the Act and will be regulated by the National Association 
of Securities Dealers, Inc., or else will be exempt from being (or 
otherwise will not be required to be) so registered or regulated, and 
will be qualified to act as a broker or dealer in the states or other 
jurisdictions where the nature of its business so requires. Certain 
Authorized Participants may be regulated under federal and state 
banking laws and regulations. Each Authorized Participant will have its 
own set of rules and procedures, internal controls and information 
barriers as it determines to be appropriate in light of its own 
regulatory regime.
    Authorized Participants may act for their own accounts or as agents 
for broker-dealers, depositaries and other securities or foreign 
currency market participants that wish to create or redeem Baskets. An 
order for one or more Baskets may be placed by an Authorized 
Participant on behalf of multiple clients.

Creation and Redemption

    In order to create a Basket, the Authorized Participant deposits 
the applicable Basket Amount with the Depository and orders Shares from 
the Trustee.\18\ The Trustee directs DTC to credit Shares to the 
Authorized Participant. The Authorized Participant will then be able to 
sell Shares to Purchasers on the NYSE or any other market in which the 
Shares may trade.
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    \18\ The Trustee shall determine the Basket Amount ``as promptly 
as practicable'' after the Federal Reserve Bank of New York 
announces the Noon Buying Rate on each day that the NYSE is open for 
regular trading. Ordinarily, this will occur by 2 p.m. (New York 
time). The Basket Amount will be published on the Trust's Web site 
every day the NYSE is open for regular trading. The Registration 
Statement, the Participant Agreement and the Trust Agreement do not 
state a precise time each day for publication of the Basket Amount. 
It will be published simultaneously with the NAV. The Sponsor for 
the Trust has represented to the Exchange that the NAV and the 
Basket Amount for the Trust will be available to all market 
participants at the same time.
---------------------------------------------------------------------------

    On any business day, an Authorized Participant may place an order 
with the Trustee to create one or more Baskets. The creation or 
redemption of Shares can occur only in a Basket of 50,000 Shares or 
multiples thereof. For purposes of processing both purchase and 
redemption orders, a ``business day'' means any day other than a day 
when the NYSE is closed for regular trading. Purchase orders placed by 
4:00 p.m. (New York time) on a business day will have that date as the 
purchase order date. By placing a purchase order, an Authorized 
Participant agrees to deposit Japanese Yen with the Trust. Before the 
delivery of Baskets for a purchase order, the Authorized Participant 
must also have wired to the Trustee the non-refundable transaction fee 
due for the purchase order.
    The total deposit required to create each Basket, called the Basket 
Amount, is an amount of Japanese Yen bearing the same proportion to the 
number of Baskets to be created as the total assets of the Trust (net 
of estimated accrued but unpaid expenses) bears to the total number of 
Baskets outstanding on the date that the order to purchase is properly 
received. The amount of the required deposit is determined by dividing 
the number of units of Japanese Yen held by the Trust (net of estimated 
accrued but unpaid expenses) by the number of Baskets outstanding. All 
questions as to the composition of a Basket Amount are finally 
determined by the Trustee. The Trustee's determination of the Basket 
Amount shall be final and binding on all persons interested in the 
Trust.
    An Authorized Participant who places a purchase order is 
responsible for delivering the Basket Amount to the Trust's primary 
deposit account with the Depository as directed in the Authorized 
Participant's Participant Agreement. Authorized Participants will use 
the SWIFT system to make timely deposits through their bank 
correspondents in London. Upon receipt of a Japanese Yen deposit from 
an Authorized Participant, the Trustee will direct DTC to credit the 
number of Baskets ordered to the Authorized Participant's DTC account. 
The expense and risk of delivery, ownership and safekeeping of Japanese 
Yen until such currency has been received by the Depository shall be 
borne solely by the Authorized Participant.
    In order to redeem Shares, an Authorized Participant must send the 
Trustee a Redemption Order specifying the number of Baskets that the 
Authorized Participant wishes to redeem. The Trustee then instructs the 
Depository to send the Authorized Participant the Japanese Yen and 
directs DTC to cancel the Authorized Participant's Shares that were 
redeemed.
    The procedures by which an Authorized Participant can redeem one or 
more Baskets mirror the procedures for the creation of Baskets. On any 
business day, an Authorized Participant may place an order with the 
Trustee to redeem one or more Baskets. Redemption orders must be placed 
by 4 p.m. (New York time) on a business day. A redemption order so 
received will have that day as the order redemption date and will 
normally be effective on the date it is received in satisfactory form 
by the Trustee. The redemption procedures allow Authorized Participants 
to redeem Baskets and do not entitle an individual Shareholder to 
redeem any Shares in an amount less than a Basket or to redeem Baskets 
other than through an Authorized Participant.
    By placing a redemption order, an Authorized Participant agrees to 
deliver the Baskets to be redeemed through DTC's book-entry system to 
the Depository as directed in the Authorized Participant's Participant 
Agreement. Before the delivery of the redemption distribution for a

[[Page 7799]]

redemption order, the Authorized Participant must also have wired to 
the Trustee the non-refundable transaction fee due for the redemption 
order.

Determination of Redemption Distribution

    The redemption distribution from the Trust is a wire transfer, to 
an account of the redeeming Authorized Participant identified by the 
Authorized Participant, in the amount of Japanese Yen held by the Trust 
evidenced by the Shares being redeemed, giving effect to all estimated 
accrued but unpaid interest and expenses. Redemption distributions are 
subject to the deduction of any applicable tax or other governmental 
charges that may be due.\19\ All questions as to the amount of a 
redemption distribution are finally determined by the Trustee. The 
Trustee's determination of the amount shall be final and binding on all 
persons interested in the Trust.
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    \19\ Authorized Participants are responsible for any transfer 
tax, sales or use tax, recording tax, value added tax or similar tax 
or governmental charge applicable to the creation or redemption of 
Baskets, regardless of whether or not such tax or charge is imposed 
directly on the Authorized Participant, and agree to indemnify the 
Sponsor, the Trustee and the Trust if they are required by law to 
pay any such tax, together with any applicable penalties, additions 
to tax or interest thereon.
---------------------------------------------------------------------------

Delivery of Redemption Distribution

    The redemption distribution due from the Trust is delivered to the 
Authorized Participant as directed in the Authorized Participant's 
Participant Agreement.
    The Depository wires the redemption amount from the Deposit Account 
to an account of the redeeming Authorized Participant identified by the 
Authorized Participant. The Authorized Participant and the Trust are 
each at risk in respect of Japanese Yen credited to their respective 
accounts in the event of the Depository's insolvency.
    The Trustee will reject a redemption order if the order is not in 
proper form as described in the Participant Agreement or if the 
fulfillment of the order, in the opinion of its counsel, might be 
unlawful.

Valuation of Japanese Yen, Definition of Net Asset Value and Adjusted 
Net Asset Value

    The Trustee will calculate, and the Sponsor will publish, the 
Trust's NAV each business day. To calculate the NAV, the Trustee will 
add to the amount of Japanese Yen in the Trust at the end of the 
preceding day accrued but unpaid interest, Japanese Yen receivable 
under pending purchase orders and the value of other Trust assets, and 
will subtract the accrued but unpaid Sponsor's fee, Japanese Yen 
payable under pending redemption orders and other Trust expenses and 
liabilities, if any.
    The result is the NAV of the Trust for that business day. The 
Trustee shall also divide the NAV of the Trust by the number of Shares 
outstanding for the date of the evaluation then being made, which 
figure is the ``NAV per Share.'' The NAV will be expressed in USD based 
on the Noon Buying Rate as determined by the Federal Reserve Bank of 
New York. If, on a particular evaluation day, the Noon Buying Rate has 
not been determined and announced by 2 p.m. (New York time), then the 
most recent Federal Reserve Bank of New York determination of the Noon 
Buying Rate shall be used to determine the NAV of the Trust unless the 
Trustee, in consultation with the Sponsor, determines that such price 
is inappropriate to use as the basis for such valuation. In the event 
that the Trustee and the Sponsor determine that the most recent Federal 
Reserve Bank of New York determination of the Noon Buying Rate is not 
an appropriate basis for valuation of the Trust's Japanese Yen, they 
shall determine an alternative basis for such evaluation to be employed 
by the Trustee. Such an alternative basis may include reference to 
other exchange traded securities that reflect the value of the Japanese 
Yen relative to the USD. The use of any alternative basis to determine 
NAV would be disclosed on the Trust's Web site. The Trustee also 
determines the NAV per Share, which equals the NAV of the Trust divided 
by the number of outstanding Shares. The Sponsor will publish the NAV 
and NAV per Share on each day that the NYSE is open for regular trading 
on the Trust's Web site, http://www.currencyshares.com.

Clearance and Settlement

    The Sponsor and the Trustee will apply to DTC for acceptance of the 
Shares in its book-entry settlement system. If the Shares are eligible 
for book-entry settlement, all Shares will be evidenced by one or more 
global certificates that the Trustee will issue to DTC. The Shares will 
be available only in book-entry form. Shareholders may hold their 
Shares through DTC, if they are DTC Participants, or through Authorized 
Participants or Indirect Participants.
    If the Shares are eligible for book-entry settlement, individual 
certificates will not be issued for the Shares. Instead, global 
certificates will be signed by the Trustee and the Sponsor on behalf of 
the Trust, registered in the name of Cede & Co., as nominee for DTC, 
and deposited with the Trustee on behalf of DTC. The representations, 
undertakings and agreements made on the part of the Trust in the global 
certificates will be made and intended for the purpose of binding only 
the Trust and not the Trustee or the Sponsor individually.
    Upon the settlement date of any creation, transfer or redemption of 
Shares, DTC will credit or debit, on its book-entry registration and 
transfer system, the amount of the Shares so created, transferred or 
redeemed to the accounts of the appropriate DTC Participants. The 
Trustee and the Authorized Participants will designate the accounts to 
be credited and charged in the case of creation or redemption of 
Shares.
    Beneficial ownership of the Shares is limited to DTC Participants, 
Indirect Participants and persons holding interests through DTC 
Participants and Indirect Participants. Ownership of beneficial 
interests in the Shares will be shown on, and the transfer of ownership 
will be effected only through, records maintained by DTC (with respect 
to DTC Participants), the records of DTC Participants (with respect to 
Indirect Participants) and the records of Indirect Participants (with 
respect to Shareholders that are not DTC Participants or Indirect 
Participants). A Shareholder is expected to receive from or through the 
DTC Participant maintaining the account through which the Shareholder 
purchased its Shares a written confirmation relating to the purchase.
    DTC may discontinue providing its service with respect to Baskets 
or the Shares (or both) by giving notice to the Trustee and the 
Sponsor. Under such circumstances, the Trustee and the Sponsor would 
either find a replacement for DTC to perform its functions at a 
comparable cost or, if a replacement is unavailable, terminate the 
Trust.

Risk Factors To Investing in the Shares

    An investment in the Shares carries certain risks. The following 
risk factors are taken from and discussed in more detail in the 
Registration Statement:
     The value of the Shares relates directly to the value of 
the Japanese Yen held by the Trust. Fluctuations in the price of 
Japanese Yen could materially and adversely affect the value of the 
Shares.
     The Japanese Yen/USD exchange rate, like foreign exchange 
rates in general, can be volatile and difficult to predict. This 
volatility could materially

[[Page 7800]]

and adversely affect the performance of the Shares.
     If interest earned by the Trust does not exceed expenses, 
the Trustee will withdraw Japanese Yen from the Trust to pay these 
excess expenses which will reduce the amount of Japanese Yen 
represented by each Share on an ongoing basis.
     If the Trust incurs expenses in USD, the Trust would be 
required to sell Japanese Yen to pay these expenses. The sale of the 
Trust's Japanese Yen to pay expenses in USD at a time of low Japanese 
Yen prices could adversely affect the value of the Shares.
     Purchasing activity in the Japanese Yen market associated 
with the purchase of Baskets from the Trust may cause a temporary 
increase in the price of Japanese Yen. This increase may adversely 
affect an investment in the Shares.
     The Deposit Accounts are not entitled to payment at any 
office of JP Morgan Chase Bank, N.A. located in the United States.
     Shareholders will not have the protections associated with 
ownership of a demand deposit account insured in the United States by 
the Federal Deposit Insurance Corporation or the protection provided 
under English law.
    Japanese Yen deposited in the Deposit Accounts by an Authorized 
Participant will be commingled with Japanese Yen deposited by other 
Authorized Participants and will be held by the Depository in either 
the primary deposit account or the secondary deposit account of the 
Trust. Japanese Yen held in the Deposit Accounts will not be segregated 
from the Depository's other assets. If the Depository becomes 
insolvent, then its assets might not be adequate to satisfy a claim by 
the Trust or any Authorized Participant. In addition, in the event of 
the insolvency of the Depository or the U.S. bank of which it is a 
branch, there may be a delay and costs incurred in recovering the 
Japanese Yen held in the Deposit Accounts.
     The Shares are a new securities product. Their value could 
decrease if unanticipated operational or trading problems were to 
arise.
     Shareholders will not have the protections associated with 
ownership of shares in an investment company registered under the 
Investment Company Act of 1940.
     Shareholders will not have the rights enjoyed by investors 
in certain other financial instruments.
     The Shares may trade at a price that is at, above, or 
below the NAV per Share.
     The interest rate earned by the Trust, although 
competitive, may not be the best rate available. If the Sponsor 
determines that the interest rate is inadequate, then its sole recourse 
will be to remove the Depositary and terminate the Deposit Accounts.
     The Depository owes no fiduciary duties to the Trust or 
the Shareholders, is not required to act in their best interest and 
could resign or be removed by the Sponsor with respect to the Trust, 
triggering early termination of the Trust.
     Shareholders may incur significant fees upon the 
termination of the Trust.
     Redemption orders are subject to rejection by the Trustee 
under certain circumstances.
     Substantial sales of Japanese Yen by the official sector 
could adversely affect an investment in the Shares.
     Shareholders that are not Authorized Participants may only 
purchase or sell their Shares in secondary trading markets.
     The liability of the Sponsor and the Trustee under the 
Depositary Trust Agreement is limited; and, except as set forth in the 
Depositary Trust Agreement, they are not obligated to prosecute any 
action, suit or other proceeding in respect to any Trust property.
     The Depositary Trust Agreement may be amended to the 
detriment of Shareholders without their consent.
     The License Agreement with the Bank of New York may be 
terminated by the Bank of New York in the event of a material breach by 
the Sponsor. Termination of the License Agreement might lead to early 
termination and liquidation of the Trust.

Availability of Information Regarding Foreign Currency Prices

    Currently, the Consolidated Tape Plan does not provide for 
dissemination of the spot price of a foreign currency over the 
Consolidated Tape. However, there will be disseminated over the 
Consolidated Tape the last sale price for the Shares, as is the case 
for all equity securities traded on the Exchange (including 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 generally and exchange-traded funds specifically, 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).
    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. 
Complete real-time data for foreign currency futures and options prices 
traded on the CME and Phlx are also available by subscription from 
information service providers. The 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 Japanese Yen and other foreign 
currencies underlying CurrencyShares, which service providers include 
Bloomberg, (http://www.bloomberg.com/markets/currencies/fxc.html), CBS 

Market Watch (http://www.marketwatch.com/tools/stockresearch/globalmarkets), 

Yahoo! Finance (http://www.finance.yahoo.com/currency), moneycentral.com, 

cnnfn.com and reuters.com, which provide spot price or currency 
conversion information about the Japanese Yen and other currencies. 
Many of these sites offer price quotations drawn from other published 
sources, and as the information is supplied free of charge, it 
generally is 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.\20\ Like bond securities 
traded in the OTC market with respect to which pricing information is 
available directly from bond dealers, current foreign currency spot 
prices are also generally available with bid/ask spreads from foreign 
currency dealers.\21\
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    \20\ There may be incremental differences in the Japanese Yen 
spot price among the various information service sources. While the 
Exchange believes the differences in the Japanese Yen spot price may 
be relevant to those entities engaging in arbitrage or in the active 
daily trading of Japanese Yen 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.
    \21\ See, e.g., Securities Exchange Act Release No. 46252 (July 
24, 2002), 67 FR 49715 (July 31, 2002) (SR-Amex-2001-35) (noting 
that quote and trade information regarding debt securities is widely 
available to market participants from a variety of sources, 
including broker-dealers, information service providers, newspapers 
and Web sites).
---------------------------------------------------------------------------

    In addition, the Trust's Web site will provide the following 
information: (1) The spot price for Japanese Yen,\22\

[[Page 7801]]

including the bid and offer and the midpoint between the bid and offer 
for the Japanese Yen spot price, updated every 5 to 10 seconds,\23\ 
which is an essentially real-time basis; (2) an intraday indicative 
value (``IIV'') per share for the Shares calculated by multiplying the 
indicative spot price of the Japanese Yen by the quantity of Japanese 
Yen backing each Share, updated at least every 15 seconds; \24\ (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) the NAV of 
the Trust as calculated each business day by the Trustee; (6) accrued 
interest per Share; (7) the daily Federal Reserve Bank of New York Noon 
Buying Rate; (8) the Basket Amount for the Japanese Yen; and (9) the 
last sale price of the Shares as traded in the U.S. market, subject to 
a 20-minute delay, as it is provided free of charge.\25\ The Exchange 
will provide on its own public Web site (http://www.nyse.com) a link to the 

Trust's Web site.
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    \22\ The Trust's website's foreign currency spot price will be 
provided by FactSet Research Systems (http://www.factset.com). The NYSE 

will provide a link to the Trust's website. FactSet Research Systems 
is not affiliated with the Trust, Trustee, Sponsor, Depository, 
Distributor or the Exchange. In the event that the Trust's website 
should cease to provide this foreign currency spot price information 
from an unaffiliated source and the intraday indicative value of the 
Shares, the NYSE will commence delisting proceedings for the Shares.
    \23\ The midpoint will be calculated by the Sponsor. The 
midpoint is used for purposes of calculating the premium or discount 
of the Shares. For example, assuming a Japanese Yen spot bid of 
$.0086 and an offer of $.0087, the mid point would be calculated as 
follows: (Japanese Yen spot bid plus ((spot offer minus spot bid) 
divided by 2)) or ($.0086 + ($.0087 - $.0086/2)) = $.00865.
    \24\ The intraday indicative value of the Shares is analogous to 
the intraday optimized portfolio value (sometimes referred to as the 
IOPV), indicative portfolio value and the intraday indicative value 
(sometimes referred to as the IIV) associated with the trading of 
exchange-traded funds. See, e.g., Securities Exchange Act Release 
No. 46686 (October 18, 2002), 67 FR 65388 (October 24, 2002) (SR-
NYSE-2002-51) for a discussion of indicative portfolio value in the 
context of an exchange-traded fund.
    \25\ 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.
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Other Characteristics of the Shares

    Set forth below is a table that shows the initial number of 
currency units per Share, the number of Shares per Basket and the 
number of currency units per Basket:

----------------------------------------------------------------------------------------------------------------
                                                                  Currency units    Shares per    Currency units
                           Trust name                                per share        basket        per  basket
----------------------------------------------------------------------------------------------------------------
CurrencyShares Japanese Yen Trust...............................         10,000          50,000     500,000,000
----------------------------------------------------------------------------------------------------------------

    For the Trust, a minimum of three Baskets, representing 150,000 
Shares, will be outstanding at the commencement of trading on the 
Exchange.
    Trading in Shares on the Exchange will be effected normally until 
4:15 p.m. each business day. The minimum trading increment for Shares 
on the Exchange will be $0.01.

Listing Fees

    The Exchange original listing fee applicable to the listing of the 
Trust will be $5,000. The annual continued listing fee for the Trust 
will be $2,000.

Continued Listing Criteria

    Under the applicable continued listing criteria, the Exchange will 
commence delisting proceedings with respect to Shares of the Trust as 
follows: (1) Following the initial twelve-month period beginning upon 
the commencement of trading of the Shares, there are fewer than 50 
record and/or beneficial holders of the Shares for 30 or more 
consecutive trading days; (2) the value of the Japanese Yen is no 
longer calculated or available on at least a 15-second delayed basis 
from a source unaffiliated with the Sponsor, the Trust, the Trustee, or 
the Exchange or the Exchange stops providing a hyperlink on the 
Exchange's Web site to any such unaffiliated foreign currency value; 
(3) the IIV is no longer made available on at least a 15-second delayed 
basis; or (4) such other event shall occur or condition exist that, in 
the opinion of the Exchange, makes further dealings on the Exchange 
inadvisable. In addition, the Exchange will remove Shares from listing 
and trading upon termination of the Trust.

Exchange Trading Rules and Policies

    The Shares are considered ``securities'' pursuant to NYSE Rule 3 
and are subject to all applicable trading rules. Trading in the Shares 
will be subject to all provisions of Rules 1300A et seq.\26\ The 
Exchange does not currently exempt Currency Trust Shares from the 
Exchange's ``Market-on-Close/Limit-on-Close/Pre-Opening Price 
Indications'' Policy, although the Exchange may do so by means of a 
rule change in the future if, after having experience with the trading 
of the Shares, the Exchange believes such an exemption is appropriate.
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    \26\ In particular, Rule 1300A provides that Rule 105(m) is 
deemed to prohibit an equity specialist, his member organization, 
other member, allied member or approved person in such member 
organization or officer or employee thereof from acting as a market 
maker or functioning in any capacity involving market-making 
responsibilities in the applicable non-U.S. currency, options, 
futures or options on futures on such currency, or any other 
derivatives based on such currency, except as otherwise provided 
therein.
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    The Exchange has adopted Rule 1301A (``Currency Trust Shares: 
Securities Accounts and Orders of Specialists'') to ensure that 
specialists handling Currency Trust Shares provide the Exchange with 
all necessary information relating to their trading in the applicable 
non-U.S. currency, options, futures contracts and options thereon or 
any other derivative on such currency.\27\ As a general matter, the 
Exchange has regulatory jurisdiction over its member organizations and 
any person or entity controlling a member organization. The Exchange 
also has regulatory jurisdiction over a subsidiary or affiliate of a 
member organization that is in the securities business. A member 
organization subsidiary or affiliate that does business only in 
commodities would not be subject to NYSE jurisdiction, but the Exchange 
could obtain certain information regarding the activities of such 
subsidiary or affiliate through reciprocal agreements with regulatory 
organizations that are members or affiliates of the Intermarket 
Surveillance Group (``ISG'') of which such subsidiary or affiliate is a 
member.
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    \27\ Rule 1301A also states that, in connection with trading the 
applicable non-U.S. currency, options, futures or options on futures 
or any other derivatives on such currency (including Currency Trust 
Shares), the specialist shall not use any material nonpublic 
information received from any person associated with a member or 
employee of such person regarding trading by such person or employee 
in the applicable non-U.S. currency, options, futures or options on 
futures, or any other derivatives on such currency. For purposes of 
Rule 1301A, ``person associated with a member'' shall have the same 
meaning ascribed to it in section 3(a)(21) of the Act.
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Surveillance

    The Exchange's surveillance procedures will be comparable to those 
used for Investment Company Units, and streetTRACKS [reg] Gold Shares 
and the currently-traded CurrencyShares Trusts and will incorporate and 
rely upon existing NYSE surveillance procedures governing equities. The

[[Page 7802]]

Exchange believes that these procedures are adequate to monitor 
Exchange trading of the Shares, to detect violations of Exchange rules, 
consequently deterring manipulation.
    The Exchange's current trading surveillances focus on detecting 
securities trading 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 is able to 
obtain information regarding trading in the Shares, foreign currency 
options and foreign currency futures, including Japanese Yen options 
and futures, through NYSE members, in connection with such members' 
proprietary or customer trades which they effect on any relevant 
market. In addition, the Exchange may obtain trading information via 
the ISG from other exchanges who are members or affiliates of the ISG. 
Specifically, the NYSE can obtain such information from the Phlx in 
connection with Japanese Yen options trading on the Phlx and from the 
CME in connection with Japanese Yen futures trading on those 
exchanges.\28\
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    \28\ Phlx is a member of ISG. CME is an affiliate member of ISG.
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    The Exchange's surveillance procedures will be comparable to those 
used for investment company units currently trading on the Exchange and 
will incorporate and rely upon existing NYSE surveillance procedures 
governing equities.

Trading Halts

    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 on the Exchange in the Shares may be 
halted because of market conditions or for reasons that, in the view of 
the Exchange, make trading in the Shares inadvisable. These may include 
(1) the extent to which trading is not occurring in Japanese Yen or (2) 
whether other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. In addition, 
trading in Shares is subject to trading halts caused by extraordinary 
market volatility pursuant to Exchange's ``circuit breaker'' rule.\29\ 
If the value of Japanese Yen updated at least every 15 seconds from a 
source not affiliated with the Sponsor, Trust or the Exchange; or (2) 
the IIV per Share updated every 15 seconds is not being disseminated, 
the Exchange may halt trading during the day in which the interruption 
to such dissemination occurs. If the interruption to the dissemination 
of the value of the Japanese Yen or the IIV persists past the trading 
day in which it occurred, the Exchange will halt trading no later than 
the beginning of the trading day following the interruption.
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    \29\ NYSE Rule 80B.
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Due Diligence

    Before a member, member organization, allied member or employee 
thereof recommends a transaction in the Shares, such person must 
exercise due diligence to learn the essential facts relative to the 
customer pursuant to Exchange Rule 405, and must determine that the 
recommendation complies with all other applicable Exchange and Federal 
rules and regulations. A person making such recommendation should have 
a reasonable basis for believing, at the time of making the 
recommendation, that the customer has sufficient knowledge and 
experience in financial matters that he or she may reasonably be 
expected to be capable of evaluating the risks and any special 
characteristics of the recommended transaction, and is financially able 
to bear the risks of the recommended transaction.

Information Memo

    The Exchange will distribute an Information Memo to its members in 
connection with the trading in the Shares. The Memo will discuss the 
special characteristics and risks of trading this type of security. 
Specifically, the Memo, among other things, will discuss what the 
Shares are, that Shares are not individually redeemable but are 
redeemable only in Baskets of 50,000 shares or multiples thereof, how a 
Basket is created and redeemed, applicable Exchange rules, the 
indicative price of Japanese Yen and IIV, dissemination information, 
trading information and the applicability of suitability rules.\30\ The 
Information Memo will also state that the number of units Japanese Yen 
required to create a Basket or to be delivered upon redemption of a 
Basket may gradually decrease over time in the event that the Trust is 
required to withdraw or sell units of foreign currency to pay the 
Trust's expenses. The Memo also will reference that the Trust is 
subject to various fees and expenses described in the Registration 
Statement. The Memo also will reference the fact that there is no 
regulated source of last sale information regarding foreign currency, 
and that the Commission has no jurisdiction over the trading of foreign 
currency. Finally, the Memo also will note to members language in the 
Registration Statement regarding prospectus delivery requirements for 
the Shares.
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    \30\ The Information Memo will discuss exemptive relief granted 
by the Commission from certain rules under the Act. See note 14, 
supra.
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2. Statutory Basis
    The basis under the Act for this proposed rule change, as amended, 
is the requirement under section 6(b)(5) of the Act \31\ that an 
Exchange have rules that are 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, 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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    \31\ 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.

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, as amended, 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 e-mail to rule-comments@sec.gov. Please include File 

Number SR-NYSE-2007-03 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.

[[Page 7803]]

    All submissions should refer to File Number SR-NYSE-2007-03. 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. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the 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 available publicly. All submissions should refer to 
File number SR-NYSE-2007-03 and should be submitted by March 13, 2007.

IV. Commission Findings and Order Granting Accelerated Approval of a 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change, as amended, is consistent with the requirements of the Act 
\32\ and the rules and regulations thereunder applicable to a national 
securities exchange.\33\ In particular, the Commission finds that the 
proposed rule change, as amended, is consistent with the requirements 
of Section 6(b)(5) of the Act,\34\ which requires, among other things, 
that the Exchange's rules be designed to promote just and equitable 
principles of trade, to remove impediments and to 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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    \32\ 15 U.S.C. 78f.
    \33\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See U.S.C. 78c(f).
    \34\ 15 U.S.C. 78f(b)(5).
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A. Surveillance

    The Commission finds that the proposed rule change provides the 
NYSE with the tools necessary to monitor trading in the Shares and is 
designed to prevent fraudulent and manipulative acts and practices. 
Information sharing agreements with markets trading securities 
underlying a derivative, or primary markets trading derivatives on the 
same underlying instruments, are an important part of a self-regulatory 
organization's ability to monitor for trading abuses in derivative 
products.\35\ Although an information sharing agreement is not possible 
with the OTC foreign exchange market, the Commission believes that the 
Exchange's comprehensive surveillance sharing agreements with the Phlx 
and CME, by virtue of their memberships in the ISG, together with NYSE 
Rules 1301A and 1300A(b), will allow the NYSE to monitor for fraudulent 
and manipulative trading practices.\36\
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    \35\ See, e.g., Securities Exchange Act Release No. 50603 
(October 28, 2004), 69 FR 64614 (November 5, 2004) (approving 
proposal by the NYSE to list and trade trust shares that correspond 
to a fixed amount of gold).
    \36\ The Commission notes that it has previously approved the 
listing and trading of foreign currency options and warrants. See, 
e.g., Securities Exchange Act Release Nos. 19133 (October 14, 1982), 
47 FR 46946 (October 21, 1982) (order approving a Phlx proposal to 
accommodate the listing and trading of standardized option contracts 
on five foreign currencies, including the British Pound and Swiss 
Franc); 22471 (September 26, 1985), 50 FR 40636 (October 4, 1985) 
(order approving a proposed rule change by the Chicago Board Options 
Exchange, Inc. (``CBOE'') to trade standardized option contracts on 
six foreign currencies, including the British Pound, Canadian 
Dollar, and Swiss Franc); 23945 (December 30, 1986), 52 FR 633 
(January 7, 1987) (order approving a proposal by the CBOE to trade 
standardized options on the Australian Dollar); and 35806 (June 5, 
1995), 60 FR 30911 (June 12, 1995) (order approving a Phlx proposal 
to trade currency warrants based on the value of the U.S. dollar in 
relation to the Mexican Peso).
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    NYSE Rule 1301A requires that the specialist handling the Shares 
provide the Exchange with information relating to its trading in 
options, futures or options on futures on the Japanese Yen, or any 
other derivatives based on the Japanese Yen. These reporting and 
recordkeeping requirements will assist the Exchange in identifying 
situations potentially susceptible to manipulation. NYSE Rule 1301A(c) 
also prohibits the specialist in the Shares from using any material, 
nonpublic information received from any person associated with a member 
or employee of such person regarding trading by such person or employee 
in the Japanese Yen, or options, futures or options on futures on the 
Japanese Yen, or any other derivatives based on the Japanese Yen 
(including the Shares). In addition, NYSE Rule 1300A(b) prohibits the 
specialist in the Shares from being affiliated with a market maker in 
the Japanese Yen, or options, futures or options on futures on the 
Japanese Yen, or any other derivative based on the Japanese Yen, unless 
information barriers are in place that satisfy the requirements in NYSE 
Rule 98.
    The Exchange also represents that it can obtain, through its ISG 
membership, information from CME regarding the trading of the Japanese 
Yen futures, and options on those futures, that trade on CME, and from 
Phlx regarding the trading of options on the Japanese Yen that trade on 
Phlx. In addition, the Exchange represents that it is able to obtain 
information regarding trading in the Shares, and options and futures on 
the Japanese Yen, through its members, in connection with such members' 
proprietary or customer trades that they effect on any relevant market.

B. Dissemination of Information

    The Commission believes that sufficient venues for obtaining 
reliable information exist so that investors in the Shares can monitor 
the underlying Japanese Yen spot market relative to the NAV of their 
Shares. As discussed above, the Exchange represents that there is a 
considerable amount of foreign currency price and market information 
available 24 hours a day through public Web sites and through 
professional and subscription services, including Bloomberg and 
Reuters.\37\ The Exchange further represents that major market data 
vendors regularly report current currency exchange pricing for a fee 
for the Japanese Yen underlying the Shares. In addition, the Exchange 
will provide a link to the Trust's Web site on the NYSE's public Web 
site. The Trust's Web site will provide, among other things, the 
Japanese Yen spot prices,\38\ including the bids and offers and the 
midpoints between the bids and offers for the Japanese Yen, updated no 
less than every 5 to 10 seconds, and the daily Federal Reserve Bank of 
New York Noon Buying Rate.
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    \37\ The Exchange notes that, in most instances, real-time 
information is available for a fee, and information available free 
of charge is subject to delay (typically, 15 to 20 minutes).
    \38\ As noted above, the spot price for the Japanese Yen 
published on the Trusts' Web site will be provided by FactSet 
Research Systems, which is not affiliated with the Trust, the 
Trustee, the Sponsor, the Depository, the Distributor or the 
Exchange.
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    The Commission also notes that the Trust's Web site will contain: 
(1) An IIV per Share for the Shares, updated at least every 15 seconds; 
(2) a delayed indicative value (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) the 
NAV of the Trust, as calculated

[[Page 7804]]

each business day by the Trustee;\39\ (5) accrued interest per Share; 
(6) the Basket Amount for the Japanese Yen; and (7) the last sale price 
of the Shares as traded in the U.S. market, subject to a 20-minute 
delay, as it is provided free of charge.\40\ Further, the Exchange 
represents that real-time information for prices for futures and 
options on the Japanese Yen traded on CME and Phlx are available from 
information service providers, and that CME and Phlx provide delayed 
futures and options information free of charge on their respective Web 
sites. The Commission believes that the wide availability of such 
information, as described above, will facilitate transparency with 
respect to the Shares and diminish the risk of manipulation or unfair 
informational advantage.
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    \39\ According to the Exchange, the Sponsor has represented to 
the Exchange that the NAV for the Trust will be available to all 
market participants at the same time. The Exchange further 
represents that therefore, no market participant will have a time 
advantage in using such data.
    \40\ As noted above, the last sale price of the Shares in the 
secondary market will be disseminated over the Consolidated Tape.
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C. Listing and Trading

    The Commission finds that the Exchange's proposed rules and 
procedures for the listing and trading of the proposed Shares are 
consistent with the Act. Shares will trade as equity securities subject 
to NYSE rules including, among others, rules governing trading halts, 
responsibilities of the specialist, account opening, and customer 
suitability requirements. In addition, the Shares will be subject to 
NYSE listing and delisting rules and procedures governing the trading 
of ICUs on the NYSE. The Commission believes that listing and delisting 
criteria for the Shares should help to maintain a minimum level of 
liquidity and therefore minimize the potential for manipulation of the 
Shares. Finally, the Commission believes that the Information Memo the 
Exchange will distribute will inform members and member organizations 
about the terms, characteristics, and risks in trading the Shares, 
including their prospectus delivery obligations.

D. Acceleration

    The Commission finds good cause for approving the proposed rule 
change, as amended, prior to the 30th day after the date of publication 
of the notice of filing thereof in the Federal Register. The Commission 
has previously granted approval to a NYSE proposal to adopt NYSE Rules 
1300A and 1301A that govern the trading of Currency Trust Shares, and a 
proposal to list and trade Euro Shares pursuant to such rules.\41\ The 
Shares proposed to be listed and traded in this proposed rule change, 
are substantially similar in structure and operation to the Euro 
Shares, will be listed and traded pursuant to the same rules, and do 
not raise any new issues. Therefore, the Commission finds good cause, 
consistent with Section 19(b)(2) of the Act,\42\ to approve the 
proposal, as amended, on an accelerated basis.
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    \41\ See Securities Exchange Act Release No. 52843, (November 
28, 2005), 70 FR 72486 (December 5, 2005), (SR-NYSE-2005-65) (order 
granting accelerated approval, after a 15-day comment period, to a 
NYSE proposal to list and trade Euro Shares, which represent units 
of fractional undivided beneficial interest in and ownership of the 
Euro Currency Trust).
    \42\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\43\ that the proposed rule change (SR-NYSE-2007-03), as amended, is 
approved on an accelerated basis.
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    \43\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\44\
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    \44\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-2844 Filed 2-16-07; 8:45 am]

BILLING CODE 8011-01-P