Document ID: SEC-2007-1243-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-09-06T04:00Z

[Federal Register: September 6, 2007 (Volume 72, Number 172)]
[Notices]               
[Page 51285-51287]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06se07-111]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56332; File No. SR-NYSE-2007-76]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Relating To Requirements for 
Listing of Commodity-Linked Securities and Currency-Linked Securities

August 29, 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 August 22, 2007, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by the 
Exchange. The 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Section 703.22 of the NYSE Listed 
Company Manual (the ``Manual''), which permits the listing of 
commodity-linked securities (``Commodity-Linked Securities'') and 
currency-linked securities (``Currency-Linked Securities''), among 
other securities. The text of the proposed rule change is available at 
NYSE, the Commission's Public Reference Room, and http://www.nyse.com.

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

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

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

1. Purpose
    The Exchange proposes to amend Section 703.22(B)(II)(1)(b) and 
Section 703.22(B)(III)(1)(b) of the Manual to permit the listing and 
trading of Commodity-Linked Securities and Currency-Linked Securities, 
respectively, where the underlying Commodity Reference Asset \3\ or 
Currency Reference Asset,\4\ as the case may be, may include components 
representing not more than 10% of the dollar weight of such Commodity 
Reference Asset or Currency Reference Asset, for which the pricing 
information is derived from markets which do not meet the general 
requirements of the respective rule, as described below. In addition, 
the Exchange proposes that no single component of a Commodity Reference 
Asset or Currency Reference Asset, as the case may be, subject to the 
foregoing proposed exception may exceed 7% of the dollar weight of such 
Commodity Reference Asset or Currency Reference Asset.
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    \3\ Commodity Reference Asset is defined as one or more physical 
commodities or commodity futures, options or other commodity 
derivatives or Commodity Trust Shares (as defined in NYSE Rule 
1300B) or a basket or index of any of the foregoing. See Section 
703.22 of the Manual.
    \4\ Currency Reference Asset is defined as one or more 
currencies, options or currency futures or other currency 
derivatives or Currency Trust Shares (as defined in NYSE Rule 1300A) 
or a basket or index of any of the foregoing. See id.
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    Under Section 703.22(B)(II)(1) of the Manual, an issuance of 
Commodity-Linked Securities currently cannot be listed unless either:
     The Commodity Reference Asset to which the security is 
linked shall have been reviewed and approved for the trading of 
Commodity Trust Shares or options or other derivatives by the 
Commission under Section 19(b)(2) \5\ of the Act and rules thereunder 
and the conditions set forth in the Commission's approval order, 
including with respect to comprehensive surveillance sharing agreements 
(``CSSAs''), continue to be satisfied; or
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    \5\ 15 U.S.C. 78s(b)(2).
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     The pricing information for each component of a Commodity 
Reference Asset is derived from a market which is an Intermarket 
Surveillance Group (``ISG'') member or affiliate or with which the 
Exchange has a CSSA. Notwithstanding the previous sentence, pricing 
information for gold and silver may be derived from the London Bullion 
Market Association.
    Similarly, under Section 703.22(B)(III)(1) of the Manual, an 
issuance of Currency-Linked Securities currently cannot be listed 
unless either:
     The Currency Reference Asset to which the security is 
linked shall have been reviewed and approved for the trading of 
Currency Trust Shares or options or other derivatives by the Commission 
under Section 19(b)(2) of the Act and rules thereunder and the 
conditions set forth in the Commission's approval order, including with 
respect to CSSAs, continue to be satisfied; or
     The pricing information for each component of a Currency 
Reference Asset must be (1) the generally accepted spot price for the 
currency exchange rate in question or (2) derived from a market which 
is (a) an ISG member or affiliate or with which the Exchange has a CSSA 
and (b) the pricing source for components of a Currency Reference Asset 
that has previously been approved by the Commission.
    The Exchange proposes to amend the requirements as to the source of 
pricing information for components of Commodity-Linked Securities and 
Currency-Linked Securities so as to permit the listing of such 
securities where a maximum of 10% of the dollar weight of the Commodity 
Reference Asset or Currency Reference Asset, as the case may be, is 
made up of components that do not meet the respective general pricing 
information requirements. In addition, the Exchange proposes that no 
single component subject to the proposed exception may exceed 7% of the 
dollar weight of the Commodity Reference Asset or Currency Reference 
Asset, as the case may be.
    The Exchange states that many commodity and currency markets are 
not members or affiliates of ISG, and the Exchange frequently 
experiences difficulty entering into CSSAs with such markets. The 
Exchange believes that its surveillance procedures are not materially 
hampered as long as it has access to trading information of underlying 
components that constitute

[[Page 51286]]

at least 90% of the dollar weight of the Commodity Reference Asset or 
Currency Reference Asset, as the case may be, and so long as the 
remaining 10% of the dollar weight of the Commodity Reference Asset or 
Currency Reference Asset, as the case may be, is comprised of more than 
one component. In addition, with respect to Currency-Linked Securities, 
the Exchange believes that the fact that the pricing information of a 
Currency Reference Asset is not based on the generally accepted spot 
price for the relevant currency or the Commission has not approved a 
particular market as a pricing source for components of a Currency 
Reference Asset does not constitute a material risk to investors where 
the pricing information for at least 90% of the dollar weight of the 
Currency Reference Asset is either based on the generally accepted spot 
price or derived from Commission-approved markets.\6\
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    \6\ E-mail from John Carey, Assistant General Counsel, NYSE 
Euronext, to Edward Cho, Special Counsel, Division of Market 
Regulation, Commission, dated August 27, 2007 (confirming the basis 
of the proposal with respect to Currency-Linked Securities).
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    The Exchange believes that the proposed amendment would provide the 
Exchange with greater flexibility to list securities under Section 
703.22 of the Manual that are linked to a broader range of underlying 
assets, thereby providing issuers with a faster and less cumbersome 
means of listing new Commodity-Linked Securities and Currency-Linked 
Securities and benefiting the investing public. The Exchange notes that 
the Commission has previously approved similar approaches to the 
instant proposal, including another provision in Section 703.22 of the 
Manual permitting the listing of Equity Index-Linked Securities,\7\ 
where the underlying equity index may include foreign country 
securities or foreign country securities underlying American Depositary 
Receipts having their primary trading market outside the United States 
on foreign trading markets that are not members or affiliates of ISG or 
parties to CSSAs with the Exchange, as long as such securities do not, 
in the aggregate, represent more than 20% of the dollar weight of such 
underlying index.\8\
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    \7\ Equity Index-Linked Securities are defined as securities 
that provide for the payment at maturity of a cash amount based on 
the performance of an underlying index or indexes of equity 
securities. See Section 703.22 of the Manual.
    \8\ See Section 703.22(B)(I)(2)(vii) of the Manual. See also 
Securities Exchange Act Release Nos. 55687 (May 1, 2007), 72 FR 
25824 (May 7, 2007) (SR-NYSE-2007-27) (approving the generic listing 
and trading standards for Index-Linked Securities, including Equity 
Index-Linked Securities); and 54013 (June 16, 2006), 71 FR 36372 
(June 26, 2006) (SR-NYSE-2006-17) (approving the listing and trading 
of shares of the iShares GSCI Commodity Indexed Trust and providing 
that if a new component is added to the underlying index that 
constitutes more than 10% of the overall weight of the index and 
with whose principal trading market the Exchange does not have a 
comprehensive surveillance sharing agreement, the Exchange would 
seek to delist such shares).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
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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    \9\ 15 U.S.C. 78f(b).
    \10\ 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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.
    The Exchange has requested accelerated approval of this proposed 
rule change prior to the 30th day after the date of publication of the 
notice of the filing thereof. The Commission is considering granting 
accelerated approval of the proposed rule change at the end of a 15-day 
comment period.

IV. Solicitation of Comments

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

Electronic Comments

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

File Number SR-NYSE-2007-76 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2007-76. 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-NYSE-2007-76 and should be 
submitted on or before September 21, 2007.

[[Page 51287]]

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-17543 Filed 9-5-07; 8:45 am]

BILLING CODE 8010-01-P