Document ID: SEC-2008-1507-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc
Posted Date: 2008-11-05T05:00Z

[Federal Register: November 5, 2008 (Volume 73, Number 215)]
[Notices]               
[Page 65913-65915]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05no08-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58879; File No. SR-NYSEArca-2008-113]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To List and Trade 
Three Series of SPDR Index Shares Funds

October 29, 2008.
    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 October 22, 2008, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared substantially by NYSE Arca. 
NYSE Arca 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 it 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

    NYSE Arca proposes to list and trade shares (``Shares'') of the 
following funds (``Funds''), which are series of SPDR Index Shares 
Funds (``Trust''): SPDR S&P Emerging Markets Small Cap ETF; SPDR S&P 
International Small Cap ETF; and SPDR DJ Wilshire International Real 
Estate ETF.

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

    In its filing with the Commission, NYSE Arca 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. NYSE Arca has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

[[Page 65914]]

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

1. Purpose
    The Exchange proposes to list and trade the Shares of the following 
funds under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing 
standards for Investment Company Units (``ICUs''): \5\ SPDR S&P 
Emerging Markets Small Cap ETF; SPDR S&P International Small Cap ETF; 
SPDR DJ Wilshire International Real Estate ETF. The Funds are currently 
listed on NYSE Alternext US LLC (``NYSE Alternext US'') (formerly, 
American Stock Exchange LLC) and are traded on the Exchange pursuant to 
unlisted trading privileges (``UTP''). Prior to listing on the 
Exchange, the Funds would be required to satisfy the applicable 
delisting procedures of NYSE Alternext US and applicable statutory and 
regulatory requirements, including, without limitation, Section 12 of 
Securities Exchange Act of 1934 (``Act''),\6\ relating to listing the 
Funds on the Exchange.\7\
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    \5\ An Investment Company Unit is a security that represents an 
interest in a registered investment company that holds securities 
comprising, or otherwise based on or representing an interest in, an 
index or portfolio of securities (or holds securities in another 
registered investment company that holds securities comprising, or 
otherwise based on or representing an interest in, an index or 
portfolio of securities). See NYSE Arca Equities Rule 5.2(j)(3)(A).
    \6\ 15 U.S.C. 78(l).
    \7\ The Exchange will seek the voluntary consent of the issuer 
of the Fund to be delisted from NYSE Alternext US and listed on the 
Exchange. The Exchange notes that its approval of the Fund's listing 
application would be required prior to listing.
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    The investment objective of the SPDR S&P Emerging Markets Small Cap 
ETF is to provide investment results that, before fees and expenses, 
correspond generally to the total return performance of an index that 
tracks the small capitalization segment of global emerging market 
countries. The Fund uses a passive management strategy and ``sampling'' 
methodology designed to track the total return performance of the S&P/
Citigroup Emerging Market US$2 billion Index (the ``Emerging Markets 
Small Cap Index''). The Emerging Markets Small Cap Index is a float 
adjusted market cap weighted index that represents the small 
capitalization segment of emerging countries included in the BMI Global 
Equity Index.
    The investment objective of the SPDR S&P International Small Cap 
ETF is to replicate as closely as possible, before fees and expenses, 
the total return performance of an equity index based upon the 
developed world (except the U.S.) small capitalization equity markets. 
The Fund uses a passive management strategy and a ``sampling'' 
methodology designed to track the total return performance of the S&P/
Citigroup World Ex US Cap Range < 2 Billion USD Index--a market 
capitalization weighted index that defines and measures the investable 
universe of publicly traded companies domiciled in developed countries 
outside the U.S.
    The investment objective of the SPDR DJ Wilshire International Real 
Estate ETF Fund uses a passive management strategy and ``sampling'' 
methodology designed to track the price and yield performance of the 
Dow Jones Wilshire Ex-US Real Estate Securities Index (``DJW Ex-US RESI 
Index''). The DJW Ex-US RESI Index is a float adjusted market 
capitalization index designed to measure the performance of publicly 
traded real estate securities in countries excluding the U.S.
    The Exchange is submitting this proposed rule change because the 
underlying indexes (``Indexes'') for the Funds do not meet all of the 
``generic'' listing requirements of Commentary .01(a)(B) to NYSE Arca 
Equities Rule 5.2(j)(3) applicable to listing of ICUs based on 
international or global indexes. The Indexes meet all such requirements 
except for those set forth in Commentary .01(a)(B)(2).\8\ The Exchange 
represents that: (1) Except for the requirement under Commentary 
.01(a)(B)(2) to NYSE Arca Equities Rule 5.2(j)(3) that component stocks 
that in the aggregate account for at least 90% of the weight of the 
index each shall have a minimum monthly trading volume of at least 
250,000 shares, the Shares of the Fund currently satisfy all of the 
generic listing standards under NYSE Arca Equities Rule 5.2(j)(3); (2) 
the continued listing standards under NYSE Arca Equities Rules 
5.2(j)(3) and 5.5(g)(2) applicable to ICUs shall apply to the Shares; 
and (3) the Trust is required to comply with Rule 10A-3 under the Act 
\9\ for the initial and continued listing of the Shares. In addition, 
the Exchange represents that the Shares will comply with all other 
requirements applicable to ICUs including, but not limited to, 
requirements relating to the dissemination of key information such as 
the Index value and Intraday Indicative Value, rules governing the 
trading of equity securities, trading hours, trading halts, 
surveillance,\10\ and Information Bulletin to ETP Holders, as set forth 
in Exchange rules applicable to ICUs and in prior Commission orders 
approving the generic listing rules applicable to the listing and 
trading of ICUs.\11\
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    \8\ The Exchange states that the Indexes fail to meet the 
requirement of Commentary .01(a)(B)(2) to NYSE Arca Equities Rule 
5.2(j)(3) that component stocks that in the aggregate account for at 
least 90% of the weight of the index each shall have a minimum 
monthly trading volume of at least 250,000 shares. The Exchange 
states that, as of October 7, 2008, for SPDR S&P Emerging Markets 
Small Cap ETF, SPDR S&P International Small Cap ETF, and SPDR DJ 
Wilshire International Real Estate ETF, component stocks that in the 
aggregate account for 89.59%, 86.25% and 88.95% of the respective 
index weights each had a minimum monthly trading volume of at least 
250,000 shares.
    \9\ 17 CFR 240.10A-3.
    \10\ The Exchange may obtain information for surveillance 
purposes via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members of ISG. The Exchange notes that not all 
Index component stocks may trade on markets that are ISG members. 
For a list of the current members of ISG, see http://
www.isgportal.org.
    \11\ See, e.g., Securities Exchange Act Release No. 55621 (April 
12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86) (order 
approving generic listing standards for ICUs based on international 
or global indexes); Securities Exchange Act Release No. 44551 (July 
12, 2001), 66 FR 37716 (July 19, 2001) (SR-PCX-2001-14) (order 
approving generic listing standards for ICUs and Portfolio 
Depositary Receipts); Securities Exchange Act Release No. 41983 
(October 6, 1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) 
(order approving rules for listing and trading of ICUs).
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    Detailed descriptions of the Funds, the Indexes, procedures for 
creating and redeeming Shares, transaction fees and expenses, 
dividends, distributions, taxes, and reports to be distributed to 
beneficial owners of the Shares can be found in the Trust's 
Registration Statement\12\ or on the Web site for the Funds (http://
www.ssgafunds.com), as applicable.
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    \12\ See Amendment No. 17 to the Trust's Registration Statement 
for the Funds on Form N-1A, dated January 25, 2008 (Nos. 333-92106 
and 811-21145). See e-mail from Michael Cavalier, Chief Counsel, 
NYSE Euronext, to Brian O'Neill, Attorney, Division of Trading and 
Markets, Commission, dated October 28, 2008.
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2. Statutory Basis
    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),\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 mechanisms of a free and open 
market and a national market system. The proposed rule change will 
allow the listing and trading of the Fund on the Exchange, which the 
Exchange believes will enhance competition among market

[[Page 65915]]

participants, to the benefit of investors and the marketplace.
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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

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

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

    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, the proposed rule 
change has become effective pursuant to Section 19(b)(3)(A) of the Act 
\15\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
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    The Exchange believes that the proposed rule change does not 
significantly affect the protection of investors or the public interest 
and does not impose any significant burden on competition. The Exchange 
also believes that the proposed rule change is noncontroversial in that 
the Indexes for the SPDR S&P Emerging Markets Small Cap ETF, SPDR S&P 
International Small Cap ETF, and SPDR DJ Wilshire International Real 
Estate ETF fail to meet the requirements set forth in Commentary 
.01(a)(B)(2) to NYSE Arca Equities Rule 5.2(j)(3) by only small amounts 
(0.41%, 3.75% and 1.05%, respectively) and the Shares currently satisfy 
all of the other generic listing standards under NYSE Arca Equities 
Rule 5.2(j)(3) and all other requirements applicable to ICUs, as set 
forth in Exchange rules and prior Commission orders approving the 
generic listing rules applicable to the listing and trading of ICUs. In 
addition, the Exchange believes that it has developed adequate trading 
rules, procedures, surveillance programs, and listing standards for the 
continued listing and trading of the Shares.
    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\17\ 
However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay and designate the proposed 
rule change operative upon filing to accommodate trading in the Shares 
on the Exchange prior to the end of the 30-day period. The Exchange 
stated that waiver of the 30-day delayed operative date is necessary to 
accommodate the issuer's timeframe for listing the Shares on the 
Exchange and will benefit the market and investors by permitting 
listing and trading of the Shares on the Exchange prior to the 30-day 
delayed operative date, thereby enhancing market competition.
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    \17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has this requirement.
    \18\ Id.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Given that the Shares comply with all of the NYSE Arca Equities generic 
listing standards for ICUs (except that the Indexes narrowly miss the 
requirement that component stocks that in the aggregate account for at 
least 90% of the weight of the index have a minimum monthly trading 
volume of at least 250,000 shares), the listing and trading of the 
Shares by NYSE Arca does not appear to present any novel or significant 
regulatory issues or impose any significant burden on competition. 
Therefore, the Commission designates the proposal operative upon 
filing.\19\
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    \19\ For purposes only of waiving the 30-day operative delay of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-NYSEArca-2008-113 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-113. 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, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of such 
filing also will be available for inspection and copying at the 
principal office of NYSE Arca. 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-2008-113 and should be submitted on or before 
November 26, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-26347 Filed 11-4-08; 8:45 am]

BILLING CODE 8011-01-P