Document ID: SEC-2008-1674-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-12-15T05:00Z

[Federal Register: December 15, 2008 (Volume 73, Number 241)]
[Notices]               
[Page 76084-76085]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de08-110]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59063; File No. SR-NYSEArca-2008-114]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving 
Proposed Rule Change To Revise the Listing and Annual Fees Applicable 
to Paired Trust Shares

December 5, 2008.

I. Introduction

    On October 22, 2008, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change amending its Schedule of Fees and Charges for 
Exchange Services (``Fee Schedule'') to revise the listing and annual 
fees applicable to Paired Trust Shares listed on NYSE Arca, LLC (``NYSE 
Arca Marketplace''), the equities facility of NYSE Arca Equities, Inc. 
(``NYSE Arca Equities''). The proposed rule change was published for 
comment in the Federal Register on November 5, 2008.\3\ The Commission 
received no comment letters on the proposed rule change. This order 
approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\See Securities Exchange Act Release No. 58878 (October 29, 
2008), 73 FR 65912.
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II. Description of the Proposed Rule Change

    Under the current Fee Schedule, Paired Trust Shares (listed under 
NYSE Arca Equities Rule 8.400) are classified as ``Derivative 
Securities Products.'' NYSE Arca proposes to reclassify Paired Trust 
Shares as ``Structured Products'' for purposes of the Fee Schedule. 
Specifically, the Exchange proposes to delete the term Paired Trust 
Shares from footnote 3 of the Fee Schedule (defining ``Derivative 
Securities Products'') and to add such term to footnote 4 of the Fee 
Schedule (defining ``Structured Products'').
    As a result of the proposed rule change, the Listing and Annual 
Fees for Paired Trust Shares would change accordingly. Under the 
current Fee Schedule, the Listing Fee for Paired Trust Shares 
(classified as Derivative Securities Products) is $5,000 per issue, and 
the Annual Fee for such securities, which is based on the number of 
shares outstanding per issue, ranges from $2,000 to $25,000 per issue. 
Under the proposal, the Listing Fee for Paired Trust Shares 
(reclassified as Structured Products), which is based on the number of 
shares outstanding per issue, would range from $5,000 to $45,000 per 
issue, and the Annual Fee for such securities, which also is based on 
the number of shares outstanding per issue, would range from $10,000 to 
$55,000 per issue.
    In addition, the Exchange proposes to make non-substantive changes 
to footnote 4 of the Fee Schedule, including updating the title of NYSE 
Arca Equities Rule 5.2(j)(6) to include Fixed Income Index-Linked 
Securities, Futures-Linked Securities, and Multifactor Index-Linked 
Securities.

III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of Section 6 of the 
Act \4\ and the rules and regulations thereunder applicable to a 
national securities exchange.\5\ In particular, the Commission finds 
that the proposed rule change is consistent with Section 6(b)(4) of the 
Act,\6\ which requires that the rules of the Exchange provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and issuers and other persons using its facilities.
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    \4\ 15 U.S.C. 78f.
    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Commission believes that the proposal to reclassify Paired 
Trust Shares as Structured Products for purposes of the Fee Schedule 
reasonably reflects the similarity of this type of product to other 
Structured Products, the issuers of which do not hold underlying 
securities, commodities, futures, or other financial instruments (other 
than U.S. Treasuries and repurchase agreements on U.S. Treasuries to 
secure specified obligations), unlike issuers of Derivative Securities 
Products. The Commission notes that, except for the shares of the 
MacroShares $100 Oil Up Trust and the MacroShares $100 Oil Down Trust, 
for which annual and listing fees for 2008 have been waived,\7\ no 
issue of Paired

[[Page 76085]]

Trust Shares is currently listed on the Exchange.\8\ As such, the 
proposed amendment to the Fee Schedule and the new fee rates for issues 
of Paired Trust Shares would equally apply to all future issues of 
Paired Trust Shares listed on the Exchange under NYSE Arca Equities 
Rule 8.400.\9\ The Commission believes that the proposal is designed to 
equitably allocate reasonable dues, fees, and other charges among 
issuers of Paired Trust Shares, consistent with the requirements of 
Section 6(b)(4) of the Act.\10\ The Commission also believes that the 
additional, non-substantive changes to the Fee Schedule further clarify 
the format and application of the fees related to Structured Products.
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    \7\ See e-mail from Michael Cavalier, Associate General Counsel, 
NYSE Euronext, to Edward Cho, Special Counsel, Division of Trading 
and Markets, Commission, dated November 24, 2008 at 12:25 p.m. 
(``Nov. 24 E-Mail''); see also Securities Exchange Act Release No. 
58598 (September 19, 2008), 73 FR 55888 (September 26, 2008) (SR-
NYSEArca-2008-78) (approving the waiver of all Annual Fees for 
securities delisted from Amex and listed on the Exchange in 
connection with the closing of the purchase of Amex by NYSE 
Euronext).
    \8\ See Nov. 24 E-Mail, supra note 7.
    \9\ The Commission notes that, generally, under the Fee 
Schedule, issues of both Derivative Securities Products and 
Structured Products are subject to Annual Fees in the year of 
listing, pro-rated based on days listed that calendar year. The 
Annual Fees for such products are billed in January for the 
forthcoming year. See Footnote 8 of the Fee Schedule. The Exchange 
states that the 2009 Annual Fees for the MacroShares $100 Oil Up 
Trust and the MacroShares $100 Oil Down Trust will be billed in 
January 2009 based on the then current Fee Schedule. See Nov. 24 E-
Mail, supra note 7.
    \10\ 15 U.S.C. 78f(b)(4).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NYSEArca-2008-114) be, and 
it hereby is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-29557 Filed 12-12-08; 8:45 am]

BILLING CODE 8011-01-P