Document ID: SEC-2007-0736-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-05-23T04:00Z

[Federal Register: May 23, 2007 (Volume 72, Number 99)]
[Notices]               
[Page 29027-29028]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23my07-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55775; File No. SR-NYSEArca-2007-40]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to Closing 
Auctions for Securities Similar to Exchange-Traded Funds

May 16, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 11, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''), 
through its wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE 
Arca Equities''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the Exchange. 
The Exchange filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which 
renders the proposal effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through NYSE Arca Equities, proposes to amend NYSE 
Arca Equities Rule 7.35(e)(3)(E) relating to closing auctions for 
exchange-traded funds (``ETFs''). The text of the proposed rule change 
is available on the Exchange's Web site (http://www.nysearca.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 Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange proposes to amend NYSE Arca Equities Rule 
7.35(e)(3)(E) relating to closing auctions for ETFs. Currently, NYSE 
Arca Equities Rule 7.35(e)(3)(E) provides special closing auction rules 
for certain listed ETFs as defined in NYSE Arca Equities Rules 
5.1(b)(13) (Unit Investment Trusts), 5.2(j)(3) (Investment Company 
Units), and 8.100 (Portfolio Depositary Receipts).\5\ Since receiving 
Commission approval to include ETFs in its closing auction process in 
2004, the Exchange has obtained approval from the Commission to list 
and trade the securities of additional derivative securities products 
that operate in a manner similar to ETFs. These derivative securities 
products are not currently included in NYSE Arca Equities Rule 
7.35(e)(3)(E). The Exchange proposes to amend NYSE Arca Equities Rule 
7.35(e)(3)(E) to include references to the rules governing these 
additional derivative securities products, rendering these types of 
products subject to the same closing auction rules as ETFs. 
Specifically, the Exchange proposes to amend NYSE Arca Equities Rule 
7.35(e)(3)(E) to include references to NYSE Arca Equities Rules 
5.2(j)(5) (Equity Gold Shares),\6\ 8.200 (Trust Issued Receipts),\7\ 
8.201 (Commodity Based Trust Shares),\8\ 8.202 (Currency

[[Page 29028]]

Trust Shares),\9\ 8.203 (Commodity Index Trust Shares),\10\ 8.300 
(Partnership Units),\11\ and 8.400 (Paired Trust Shares).\12\ In 
addition, the Exchange proposes to amend NYSE Arca Equities Rule 
7.35(e)(3)(E) to include references to NYSE Arca Equities Rule 
5.1(b)(18) which defines the term ``Exchange-Traded Funds.''
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    \5\ See Securities Exchange Act Release No. 50643 (November 5, 
2004), 69 FR 65668 (November 15, 2004) (SR-PCX-2004-98) (approving 
amendments to NYSE Arca Equities Rule 7.35 to include certain ETFs 
in the closing auction process). NYSE Arca Equities Rule 
7.35(e)(3)(E) applies only to securities that are listed on the 
Exchange and not to securities that are traded pursuant to unlisted 
trading privileges (``UTP'').
    \6\ See Securities Exchange Act Release No. 51245 (February 23, 
2005), 70 FR 10731 (March 4, 2005) (SR-PCX-2004-117) (approving 
generic listing standards for Equity Gold Shares and trading, on a 
UTP basis, of the streetTRACKS[supreg] Gold Shares pursuant to NYSE 
Arca Equities Rule 5.2(j)(5)).
    \7\ See Securities Exchange Act Release No. 44182 (April 16, 
2001), 66 FR 21798 (May 1, 2001) (SR-PCX-2001-01) (approving generic 
listing standards for Trust Issued Receipts pursuant to NYSE Arca 
Equities Rule 8.200).
    \8\ See Securities Exchange Act Release No. 51067 (January 21, 
2005), 70 FR 3952 (January 27, 2005) (SR-PCX-2004-132) (approving 
generic listing standards for Commodity-Based Trust Shares and 
trading, on a UTP basis, of the iShares[supreg] COMEX Gold Trust 
pursuant to NYSE Arca Equities Rule 8.201).
    \9\ See Securities Exchange Act Release No. 53253 (February 8, 
2006), 71 FR 8029 (February 15, 2006) (SR-PCX-2005-123) (approving 
generic listing standards for Currency Trust Shares and trading, on 
a UTP basis, of the Euro Currency Trust pursuant to NYSE Arca 
Equities Rule 8.202).
    \10\ See Securities Exchange Act Release No. 54025 (June 21, 
2006), 71 FR 36856 (June 28, 2006) (SR-NYSEArca-2006-12) (approving 
generic listing standards for Commodity Index Trust Shares and 
trading, on a UTP basis, of the iShares[supreg] GSCI Commodity 
Indexed Trust pursuant to NYSE Arca Equities Rule 8.203).
    \11\ See Securities Exchange Act Release No. 53875 (May 25, 
2006), 71 FR 32164 (June 2, 2006) (SR-NYSEArca-2006-11) (approving 
generic listing standards for Partnership Units and trading, on a 
UTP basis, of the United States Oil Fund, LP pursuant to NYSE Arca 
Equities Rule 8.300).
    \12\ See Securities Exchange Act Release No. 34-55033 (December 
29, 2006), 72 FR 1253 (January 10, 2007) (SR-NYSEArca-2006-75) 
(approving generic listing standards for Paired Trust Shares and 
trading, on a UTP basis, of the Claymore MACRO Tradeable Shares 
pursuant to NYSE Arca Equities Rule 8.400).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \13\ in general and furthers the 
objectives of Section 6(b)(5) of the Act \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.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act,\15\ 
and Rule 19b-4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). The Commission notes that the 
Exchange satisfied the five-day pre-filing notice requirement.
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    At any time within 60 days of the filing of the proposed rule 
change the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send e-mail to rule-comments@sec.gov. Please include File 

Number SR-NYSEArca-2007-40 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEArca-2007-40. 
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 Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File number SR-NYSEArca-2007-40 and should be submitted by or before 
June 13, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E7-9856 Filed 5-22-07; 8:45 am]

BILLING CODE 8010-01-P