Document ID: SEC-2008-1631-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-12-02T05:00Z

[Federal Register: December 2, 2008 (Volume 73, Number 232)]
[Notices]               
[Page 73368-73371]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02de08-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58983; File No. SR-NYSEArca-2008-126]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change by NYSE 
Arca, Inc. Relating to Listing Shares of the GreenHaven Continuous 
Commodity Index Fund

November 20, 2008.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on November 5, 2008, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice and order to 
solicit comments on the proposed rule change from interested persons 
and to approve the proposed rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through its wholly-owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities''), proposes to list and trade 
shares (``Shares'') of the GreenHaven Continuous Commodity Index Fund 
(``Fund'') pursuant to Commentary.02 to NYSE Arca Equities Rule 8.200. 
The text of the proposed rule change is available on the Exchange's Web 
site at http://www.nyse.com, at the Exchange's principal office and at 
the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

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

1. Purpose
    Pursuant to Commentary .02 to NYSE Arca Equities Rule 8.200, the 
Exchange may approve for listing and trading trust issued receipts 
(``TIRs'') investing in shares or securities (``Investment Shares'') 
that hold investments in any combination of futures contracts, options 
on futures contracts, forward contracts, commodities, swaps or high 
credit quality short-term fixed income securities or other securities. 
The Exchange proposes to list and trade the Shares under Commentary .02 
to NYSE Arca Equities Rule 8.200. The Shares represent beneficial 
ownership interests in the GreenHaven Continuous Commodity Index Master 
Fund's (``Master Fund'') net assets, consisting solely of the common 
units of beneficial interest of the Master Fund (``Master Fund 
Units''). The Fund's primary objective is to reflect the performance of 
the Continuous Commodity Total Return Index (``Index'').
    The Fund is currently listed on NYSE Alternext U.S. LLC (NYSE 
Alternext U.S. (formerly, the American Stock Exchange LLC (``Amex'')) 
\4\ and is traded on the Exchange pursuant to unlisted trading 
privileges (``UTP'').\5\ Prior to listing on the Exchange, the Fund 
would be required to satisfy the applicable delisting procedures of 
NYSE Alternext U.S. and applicable statutory and regulatory 
requirements, including, without limitation, Section 12 of the 
Securities Exchange Act of 1934 (``Act''),\6\ relating to listing the 
Shares on the Exchange.\7\
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    \4\ See Securities Exchange Act Release No. 56969 (December 14, 
2007), 72 FR 72424 (December 20, 2007) (SR-Amex-2007-53) (``Amex 
Filing''). See e-mail from Michael Cavalier, Chief Counsel, NYSE 
Euronext, to Christopher W. Chow, Special Counsel, Commission, dated 
November 13, 2008 (``November 13 e-mail'').
    \5\ See Securities Exchange Act Release No. 57029 (December 21, 
2007), 72 FR 74388 (December 31, 2007) (SR-NYSEArca-2007-68) (``UTP 
Filing'').
    \6\ 15 U.S.C. 78(l).
    \7\ The Exchange will seek the voluntary consent of the issuer 
of the Shares to be delisted from NYSE Alternext U.S. and listed on 
the Exchange. The Exchange notes that its approval of the Fund's 
listing application would be required prior to listing.
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    A description of the Fund is included in the Amex Filing, the UTP 
Filing, and the Registration Statement for the Fund.\8\ The Exchange 
represents that the Shares satisfy the applicable requirements of Rule 
8.200, including Commentary .02 to Rule 8.200, and thereby qualify for 
listing on the Exchange.\9\ The Exchange states that all of the facts 
describing the Fund, the Master Fund, Master Fund Units and the Shares 
contained in the Amex Filing are true and correct as of the date of 
this filing. The Exchange states further that the representations 
included in the Amex Filing relating to the dissemination and 
availability of information regarding the Shares will apply to listing 
and trading of the Shares on the Exchange. To the extent NYSE Alternext 
U.S. has any affirmative obligations with respect to dissemination of 
information or key values relating to the Shares, the Exchange 
represents that it would take the place of NYSE Alternext U.S. in such 
role and discharge such obligations.
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    \8\ See the Fund's Registration Statement on Form S-1, dated 
November 21, 2007 (No. 333-138424) (``Registration Statement'').
    \9\ See November 13 e-mail, supra, note 4.
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    The Fund will comply with the requirements of Rule 10A-3 \10\ under 
the Act.
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    \10\ 17 CFR 240.10A-3.
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Trading Rules

    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. Shares will trade on 
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern time. The 
Exchange has appropriate rules to facilitate transactions in the Shares 
during all trading sessions. The minimum trading increment for Shares 
on the Exchange will be $0.01.
    The trading of the Shares will be subject to Commentary .02(e)(1)-
(4) to NYSE Arca Equities Rule 8.200, which sets forth certain 
restrictions on ETP Holders acting as registered Market Makers in TIRs 
that invest in Investment Shares to facilitate surveillance. See 
``Surveillance'' below for more information.
    With respect to trading halts, the Exchange may consider all 
relevant

[[Page 73369]]

factors in exercising its discretion to halt or suspend trading in the 
Shares. Trading may be halted because of market conditions or for 
reasons that, in the view of the Exchange, make trading in the Shares 
inadvisable. These may include: (1) The extent to which trading is not 
occurring in the underlying Commodity Futures Contracts, 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 could be halted pursuant to the Exchange's ``circuit 
breaker'' rule \11\ or by the halt or suspension of trading of the 
underlying Commodity Futures Contracts.
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    \11\ See NYSE Arca Equities Rule 7.12.
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Surveillance

    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products, including Trust Issued 
Receipts, to monitor trading in the Shares. The Exchange represents 
that these procedures are adequate to properly monitor Exchange trading 
of the Shares in all trading sessions and to deter and detect 
violations of Exchange rules and applicable federal securities laws.
    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, the physical 
commodities included in, or options, futures or options on futures on, 
the Index or any other derivatives based on the Index, through ETP 
Holders, in connection with such ETP Holders' proprietary or customer 
trades which they effect on any relevant market. With regard to the 
Index components, the Exchange can obtain market surveillance 
information, including customer identity information, with respect to 
transactions occurring on the New York Mercantile Exchange, the 
InterContinental Exchange and the London Metal Exchange, pursuant to 
its comprehensive information sharing agreements with each of those 
exchanges. All of the other trading venues on which current Index 
components are traded are members of the Intermarket Surveillance Group 
(``ISG'') and the Exchange therefore has access to all relevant trading 
information with respect to those contracts without any further action 
being required on the part of the Exchange. A list of ISG members is 
available at http://www.isgportal.org.
    In addition, not more than 10% of the weight of the Index in the 
aggregate shall consist of components whose principal trading market is 
not a member of ISG or is a market with which the Exchange does not 
have a comprehensive surveillance sharing agreement.
    The Exchange also has a general policy prohibiting the distribution 
of material, non-public information by its employees.

Information Bulletin

    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin (``Bulletin'') of the special 
characteristics and risks associated with trading the Shares. 
Specifically, the Bulletin will discuss the following: (1) The 
procedures for purchases and redemptions of Shares in Baskets (and that 
Shares are not individually redeemable); (2) NYSE Arca Equities Rule 
9.2(a), which imposes a duty of due diligence on its ETP Holders to 
learn the essential facts relating to every customer prior to trading 
the Shares; (3) how information regarding the Indicative Fund Value is 
disseminated; (4) the requirement that ETP Holders deliver a prospectus 
to investors purchasing newly issued Shares prior to or concurrently 
with the confirmation of a transaction; (5) the risks involved in 
trading the Shares during the Opening and late Trading Sessions when an 
updated Indicative Fund Value will not be calculated or publicly 
disseminated; and (6) trading information.
    In addition, the Bulletin will reference that the Fund is subject 
to various fees and expenses described in the registration statement 
for the Fund.
    The Bulletin will also reference the fact that there is no 
regulated source of last sale information regarding physical 
commodities, that the Commission has no jurisdiction over the trading 
of commodity futures contracts, and that the CFTC has regulatory 
jurisdiction over the trading of commodity futures contracts.
    The Bulletin will also discuss any exemptive, no-action and 
interpretive relief granted by the Commission from Section 11(d)(1) of 
the Act \12\ and certain rules under the Act, including Rule 10b-10, 
Rule 14e-5, Rule 10b-17, Rule 11d1-2, Rules 15c1-5 and 15c1-6, and 
Rules 101 and 102 of Regulation M under the Act.
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    \12\ 15 U.S.C. 78k(d)(1).
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    The Bulletin will also disclose that the NAV for the Shares will be 
calculated after 4 p.m. Eastern time each trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\13\ in general, and Section 6(b)(5),\14\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. The Exchange believes that the 
proposed rule change will permit the listing of the Fund on the 
Exchange, to the benefit of investors and the marketplace. In addition, 
the listing and trading criteria set forth in Rule 8.200 are intended 
to protect investors and the public interest.
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    \13\ 15 U.S.C. 78f(b). See November 13 e-mail, supra, note 4.
    \14\ 15 U.S.C. 78f(b)(5). See November 13 e-mail, supra, note 4.
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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

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

III. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2008-126 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 73370]]

Commission, 100 F Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEArca-2008-126. 
This file number should be included on the subject line if e-mail is 
used. To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2008-126 and should 
be submitted on or before December 23, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\15\ In particular, the Commission believes that the proposal 
is consistent with Section 6(b)(5) of the Act,\16\ which requires, 
among other things, that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and in general, to protect investors and the 
public interest. The Commission notes that the Shares have been 
approved for listing and trading on Amex,\17\ now known as NYSE 
Alternext US, and trading pursuant to UTP on the Exchange.\18\
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    \15\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ See Amex Filing, supra, note 4.
    \18\ See UTP Filing, supra, note 5.
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    The Exchange proposes to list and trade the Shares pursuant to NYSE 
Arca Equities Rule 8.200. NYSE Arca represents that the Shares satisfy 
the applicable requirements of Rule 8.200, which includes initial and 
continued listing criteria. The Exchange deems the Shares to be equity 
securities, thus subjecting the Shares to the Exchange's existing rules 
governing the trading of equity securities.
    The Commission believes that the proposal to list and trade the 
Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of 
the Act,\19\ which sets forth Congress' finding that it is in the 
public interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for and transactions in securities. The Exchange states 
that: (1) The representations included in the Amex Filing relating to 
the dissemination and availability of information regarding the Shares 
will apply to listing and trading of the Shares on the Exchange; and 
(2) to the extent NYSE Alternext U.S. has any affirmative obligations 
with respect to dissemination of information or key values relating to 
the Shares, the Exchange will assume the role of NYSE Alternext U.S. 
and discharge such obligations. Accordingly, among other things:
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    \19\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    1. Futures contract quotes and last-sale information for the 
Commodity Futures Contracts are widely disseminated through a variety 
of market data vendors worldwide, including Bloomberg and Reuters; \20\
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    \20\ See Amex Filing, supra, note 4, 72 FR at 72425.
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    2. Complete real-time data for the Commodity Futures Contracts is 
available by subscription from Reuters and Bloomberg; \21\
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    \21\ Id.
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    3. The relevant futures exchanges also provide delayed futures 
information on current and past trading sessions and market news free 
of charge on their respective Web sites; \22\
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    \22\ Id.
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    4. The specific contract specifications for each Commodity Futures 
Contract are also available from the various futures exchanges on their 
Web sites as well as other financial informational sources; \23\
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    \23\ Id.
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    5. The Web sites for the Fund and/or the Exchange, which are 
publicly accessible at no charge, will disseminate the following 
information to everyone at the same time: (a) The current NAV per Share 
daily and the prior business day's NAV per Share and the reported 
closing price; (b) the mid-point of the bid-ask price in relation to 
the NAV per Share as of the time it is calculated (the ``Bid-Ask 
Price''); (c) calculation of the premium or discount of such price 
against the NAV per Share; (d) data in chart form displaying the 
frequency distribution of discounts and premiums of the Bid-Ask Price 
against the NAV per Share, within appropriate ranges for each of the 
four previous calendar quarters; (e) the Prospectus; (f) the 
composition of the portfolio of the Fund; and (g) other applicable 
quantitative information; \24\
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    \24\ Id.
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    6. On each business day, the Administrator will make available via 
the facilities of the Consolidated Tape Association (``CTA'') 
immediately prior to the opening of trading on the Exchange the most 
recent Basket Amount for the creation of a Basket, and the Exchange 
will disseminate at least every 15 seconds throughout the trading day, 
via the CTA, an amount representing on a per Share basis, the current 
value of the Basket Amount; \25\ and
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    \25\ See Securities Exchange Act Release No. 56802 (November 16, 
2007), 72 FR 65994, 65998 (November 26, 2007) (SR-Amex-2007-53) 
(``Amex Filing Notice'').
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    7. The Exchange will disseminate through the facilities of CTA, an 
updated Indicative Fund Value (``IFV''), on a per Share basis, that 
will be updated at least every 15 seconds between 9:30 a.m. and 4:15 
p.m. Eastern Time.\26\
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    \26\ See Amex Filing Notice, supra, note 25 at 65999.
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    The Commission also believes that the proposal to list and trade 
the Shares is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Shares appropriately and 
to prevent trading when a reasonable degree of transparency cannot be 
assured. Only Reuters determines the composition of the Index, and 
Reuters (1) considers information about changes to the Index and 
related matters to be potentially market-moving, material, and 
confidential; and (2) has policies and procedures in place to ensure to 
prevent [sic] the use and dissemination of such information.\27\ With 
respect to trading halts, the Exchange may consider all relevant 
factors in exercising its

[[Page 73371]]

discretion to halt or suspend trading in the Shares.\28\ Specifically, 
however, if the Exchange becomes aware that the NAV is not being 
disseminated to all market participants at the same time, it will halt 
trading in the Shares until such time as the NAV is available to all 
market participants pursuant to NYSE Arca Equities Rule 7.34(a)(5). 
Further, Commentary .02(e) to NYSE Arca Equities Rule 8.200 sets forth 
certain restrictions (described above) on ETP Holders acting as 
registered Market Makers in TIRs that invest in Investment Shares to 
facilitate surveillance.
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    \27\ See Amex Filing, supra, note 4, 72 FR at 72425.
    \28\ Trading may be halted because of market conditions or for 
reasons that make trading in the Shares inadvisable, including: (1) 
The extent to which trading is not occurring in the underlying 
securities; or (2) whether other unusual conditions or circumstances 
detrimental to the maintenance of a fair and orderly market are 
present.
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    In support of this proposal, the Exchange has made the following 
representations:
    1. The Shares satisfy the requirements of NYSE Arca Equities Rule 
8.200, Commentary .02, which includes the initial and continued listing 
criteria for TIRs that invest in Investment Shares.
    2. The Exchange's surveillance procedures are adequate to properly 
monitor trading of the Shares in all trading sessions and to deter and 
detect violations of Exchange rules and applicable federal securities 
laws.
    3. The Exchange will distribute an Information Bulletin, the 
contents of which are more fully described above, to ETP Holders in 
connection with the trading of the Shares.

This approval order is based on the Exchange's representations.

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\29\ for approving the proposed rule change prior to the 30th 
day after the date of publication of notice in the Federal Register. 
The Commission notes that it has previously approved the listing and 
trading of the Shares on Amex \30\ and believes that the Exchange's 
proposal to list and trade such Shares does not appear to present any 
novel or significant regulatory issues. As such, the Commission 
believes that accelerating approval of this proposal should benefit 
investors by creating, without undue delay, additional competition in 
the market for such products.
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    \29\ 15 U.S.C. 78s(b)(2).
    \30\ See Amex Filing, supra, note 4. The Shares have also been 
approved for trading on the Exchange pursuant to UTP. See UTP 
Filing, supra, note 5.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\31\ that the proposed rule change (SR-NYSEArca-2008-126) be, and 
it hereby is, approved on an accelerated basis.
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    \31\ 15 U.S.C. 78s(b)(2).
    \32\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E8-28496 Filed 12-1-08; 8:45 am]

BILLING CODE 8011-01-P