Document ID: SEC-2010-0004-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change Amending Equities Rule 5.2(j)(3)
Posted Date: 2010-01-04T05:00Z

[Federal Register Volume 75, Number 1 (Monday, January 4, 2010)]
[Notices]
[Page 168]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-31163]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61240; File No. SR-NYSEArca-2009-101]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving 
Proposed Rule Change Amending Equities Rule 5.2(j)(3)

December 24, 2009.
    On November 5, 2009, NYSE Arca, Inc. (``Arca'' or the ``Exchange'') 
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 to 
amend Commentary .01 to NYSE Arca Equities Rule 5.2(j)(3), the initial 
listing standards for Investment Company Units. The proposed rule 
change was published for comment in the Federal Register on November 
24, 2009.\3\ The Commission received no comments regarding the 
proposal. 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. 61022 (November 17, 
2009), 74 FR 61388 (``Notice'').
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    Arca proposes to amend the initial listing standards for Investment 
Company Units (``ICUs''), which are based both on U.S. indexes or 
portfolios, and international or global indexes or portfolios. 
Specifically, Arca proposes to amend the trading volume listing 
standard to lower the minimum component stock weight requirement from 
90% to 70% of the weight of the underlying index or portfolio. Arca 
also proposes to measure minimum monthly trading volume as averaged 
over the last six months. Currently, the minimum monthly trading volume 
is measured during each of the last six months. With respect to 
international or global indexes or portfolios, Arca proposes to clarify 
that the component stock trading volumes are determined on a global 
basis. Finally, as an option for meeting the listing requirements, Arca 
proposes to adopt a minimum notional volume traded per month of 
$25,000,000, also averaged over the last six months.
    The Commission has carefully reviewed the proposed rule change and 
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 \4\ and, in particular, Section 6(b)(5) of 
the Act,\5\ which requires that an exchange have rules designed to 
prevent fraudulent and manipulative acts and practices, promote just 
and equitable principles of trade, foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and to protect investors and the 
public interest.
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    \4\ 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).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed 70% weighting requirement 
should: (1) Be sufficient to help ensure that a substantial portion of 
the underlying index or portfolio remains liquid; and (2) facilitate 
the listing and trading of ICUs benefit investors by providing them 
with a wider selection of derivative products. When this requirement is 
combined with other listing requirements, the Commission believes that 
the underlying index or portfolio will remain sufficiently liquid to 
minimize potential manipulation.
    The Commission also believes that the proposed use of minimum 
notional volume as an alternative measure to minimum trading volume 
should mitigate the volume discrepancies between low- and high-priced 
stocks. In addition, measuring minimum trading volume and notional 
volume based on a six-month average should help to eliminate seasonal 
volume fluctuations that may occur in the trading of component 
securities.
    For the foregoing reasons, the Commission believes that the 
proposed rule change is consistent with the Act.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSEArca-2009-101) be, and it hereby 
is, approved.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-31163 Filed 12-31-09; 8:45 am]
BILLING CODE 8011-01-P