Document ID: SEC-2008-0288-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca,  Inc.
Posted Date: 2008-02-25T05:00Z

[Federal Register: February 25, 2008 (Volume 73, Number 37)]
[Notices]               
[Page 10084-10086]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25fe08-133]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57349; File No. SR-NYSEArca-2008-22]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To List and Trade 
the Opta Exchange-Traded Notes Due 2038

February 19, 2008
    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 February 19, 2008, 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. 
NYSE Arca filed the proposal 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 240.196-4.
    \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 proposes to list and trade the Opta Exchange-Traded 
Notes due 2038 (``Notes''). The Notes are linked to the S&P Listed 
Private Equity Index[supreg] Net Return (U.S. dollar) (``Index''). The 
text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://www.nyse.com.

[[Page 10085]]

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 list and trade the Notes, which are linked 
to the Index, pursuant to NYSE Arca Equities Rule 5.2(j)(6).\5\ The 
Notes are senior unsecured debt obligations of Lehman Brothers Holdings 
Inc. (``Lehman''). The Index is comprised of stocks of the 30 leading 
listed private equity companies that meet certain size, liquidity, 
exposure, and activity requirements (each an ``Index Component'' and, 
collectively, the ``Index Components''). The Index is designed to 
provide tradable exposure to the leading publicly listed companies in 
the private equity sector. The Index includes North American, European, 
and Asia-Pacific region private equity stocks that are trading on 
developed market exchanges.
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    \5\ NYSE Arca Equities Rule 5.2(j)(6) sets forth the Exchange's 
generic listing standards for, among others, Equity Index-Linked 
Securities, which are 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 NYSE Arca Equities Rule 
5.2(j)(6).
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    The Exchange submits this proposed rule change because the Index 
does not meet all of the ``generic'' listing requirements of NYSE Arca 
Equities Rule 5.2(j)(6)(B)(I) applicable to the listing of Equity 
Index-Linked Securities.\6\ The Index meets all such requirements, 
except for those set forth in NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(ii).\7\ The Exchange represents that: (1) Except 
for NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(ii), the Notes 
currently satisfy all of the generic listing standards under NYSE Arca 
Equities Rule 5.2(j)(6); (2) the continued listing standards under NYSE 
Arca Equities Rules 5.2(j)(6) shall apply to the Notes; and (3) Lehman 
is required to comply with Rule 10A-3 under the Act \8\; for the 
initial and continued listing of the Notes. In addition, the Exchange 
represents that the Notes will comply with all other requirements 
applicable to Equity Index-Linked Securities including, but not limited 
to, requirements relating to the dissemination of key information 
(e.g., the Index value and intraday indicative value), Exchange rules 
governing the trading of equity securities, trading hours, trading 
halts, surveillance, and Information Bulletin to ETP Holders, as set 
forth in prior Commission orders approving the generic listing rules, 
and amendments thereto, applicable to the listing and trading of Index-
Linked Securities, generally, and Equity Index-Linked Securities, in 
particular.\9\
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    \6\ The generic listing requirements under NYSE Arca Equities 
Rule 5.2(j)(6)(B)(I) permit the listing and trading of Equity Index-
Linked Securities pursuant to Rule 19b-4(e) under the Act (17 CFR 
240.19b-4(e)). Rule 19b-4(e) provides that the listing and trading 
of a new derivative securities product by a self-regulatory 
organization (``SRO'') shall not be deemed a proposed rule change, 
pursuant to Rule 19b-4(c)(1), if the Commission has approved, 
pursuant to Section 19(b) of the Act, the SRO's trading rules, 
procedures, and listing standards for the product class that would 
include the new derivatives securities product, and the SRO has a 
surveillance program for the product class.
    \7\ NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(ii) provides 
that each component security of the underlying index must have 
trading volume in each of the last six months of not less than 
1,000,000 shares per month, except that for each of the lowest 
dollar-weighted component securities in the index that, in the 
aggregate, account for no more than 10% of the dollar weight of the 
index, the trading volume must be at least 500,000 shares per month 
in each of the last six months. The Exchange represents that, GIMV 
NV, a component security which represented 1.4% of the dollar weight 
of the Index as of January 31, 2008, had a trading volume of 461,498 
shares in September 2007, which is below the 500,000 shares 
requirement.
    \8\ 17 CFR 240.10A-3.
    \9\ See, e.g., Securities Exchange Act Release Nos. 56637 
(October 10, 2007), 72 FR 58704 (October 16, 2007) (SR-NYSEArca-
2007-92) (approving conforming amendments to the generic listing 
standards for Equity Index-Linked Securities); 57132 (January 11, 
2008), 73 FR 3300 (January 17, 2008) (SR-NYSEArca-2007-125) 
(approving amendments to the continued listing standards for Equity 
Index-Linked Securities); 56838 (November 26, 2007), 72 FR 67774 
(November 30, 2007) (SR-NYSEArca-2007-118) (approving amendments 
relating to indexes underlying Equity Index-Linked Securities); and 
56879 (December 3, 2007), 72 FR 69271 (December 7, 2007) (SR-
NYSEArca-2007-110) (approving amendments to the initial listing and 
trading standards for Equity Index-Linked Securities).
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    The Exchange states that detailed descriptions of the Notes, the 
Index (including the methodology used to determine the composition of 
the Index), fees, redemption procedures and payment at redemption, 
payment at maturity, taxes, and risk factors relating to the Notes will 
be available in the Registration Statement \10\ or on the Web site for 
the Notes (http://www.optaetn.com), as applicable.
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    \10\ See Pricing Supplement to Registration Statement filed by 
Lehman on February 14, 2008 (File No. 333-134553).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\11\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\12\ 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. 
The Exchange believes that it has developed adequate trading rules, 
procedures, surveillance programs, and listing standards for the 
listing and trading of the Notes, which promote investor protection and 
the public interest. The Exchange notes that the Notes will be subject 
to all applicable requirements of NYSE Arca Equities Rule 5.2(j)(6), 
with the single exception as noted above.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 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 states that 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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, 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 \13\ and Rule 19b-4(f)(6) 
thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of 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 fulfilled this requirement.

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[[Page 10086]]

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange requests that the Commission waive 
the 30-day operative delay so that the Exchange can list and trade the 
Notes immediately. The Exchange states 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 further believes that the proposal is non-controversial 
because, although the Index fails to meet the requirements set forth in 
NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(ii) by a small amount, 
the Notes currently satisfy all of the other applicable generic listing 
standards under NYSE Arca Equities Rule 5.2(j)(6) and all other 
requirements applicable to Equity Index-Linked Securities, as set forth 
in prior Commission orders approving the generic listing rules, 
including amendments thereto, relating to the listing and trading of 
Index-Linked Securities, generally, and Equity Index-Linked Securities, 
in particular. The Exchange notes that it has developed adequate 
trading rules, procedures, surveillance programs, and listing standards 
for the listing and trading of the Notes.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\15\ Given that the Notes comply with all of NYSE Arca's 
generic listing standards for Equity Index-Linked Securities (except 
for narrowly missing the requirement of NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(ii)), the listing and trading of the Notes by 
NYSE Arca does not appear to present any novel or significant 
regulatory issues or impose any significant burden on competition. For 
these reasons, the Commission designates the proposed rule change as 
operative upon filing.
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    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 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 Number SR-NYSEArca-2008-22 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-2008-22. 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-NYSEArca-2008-22 and should 
be submitted on or before March 17, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-3465 Filed 2-22-08; 8:45 am]

BILLING CODE 8011-01-P