Document ID: SEC-2009-0856-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Listing and Trading of ProShares UltraShort MSCI Mexico Investable Market Fund
Posted Date: 2009-06-25T04:00Z

[Federal Register: June 25, 2009 (Volume 74, Number 121)]
[Notices]               
[Page 30351-30353]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jn09-91]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60128; File No. SR-NYSEArca-2009-53]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Relating to the 
Listing and Trading of ProShares UltraShort MSCI Mexico Investable 
Market Fund

June 17, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on June 12, 2009, 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 by the self-regulatory organization. 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\ 15 U.S.C. 78a.
    \3\ 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 list and trade shares (``Shares'') of the 
following fund of the ProShares Trust (``Trust''): ProShares UltraShort 
MSCI Mexico Investable Market Fund. The text of the proposed rule 
change is available on the Exchange's Web site at http://www.nyse.com, 
at the Exchange's principal office and at the Public Reference Room of 
the Commission.

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 self-regulatory organization 
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 those 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 parts 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 Shares of the following 
fund under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing 
standards for Investment Company Units (``ICUs''): \4\ ProShares 
UltraShort MSCI Mexico Investable Market Fund (the ``Fund''). The Fund 
is an ``index fund'' that seeks to provide daily investment results 
that, before fees and expenses, correspond to twice the inverse (-200%) 
of the daily performance of the MSCI Mexico Investable Market Index 
(``Index''). The Fund does not seek to achieve its stated objective 
over a period of time greater than one day.
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    \4\ 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).
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    According to the Trust's Registration Statement,\5\ the Index 
measures the performance of the Mexican equity market. The Index is a 
capitalization-weighted index that aims to capture 99% of the publicly 
available total market capitalization. Component companies are adjusted 
for available float and must meet objective criteria for inclusion in 
the Index, taking into consideration unavailable strategic 
shareholdings and limitations to foreign ownership. As of March 31, 
2009, the Index was concentrated in the telecommunications services 
industry group, which comprised 43% of the market capitalization of the 
Index, and included companies with capitalizations between $13 million 
and $26 billion. The average capitalization of the companies comprising 
the Index was approximately $1.7 billion.
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    \5\ See the Trust's Registration Statement on Form N-1A, dated 
June 2, 2009 (File Nos. 333-89822 and 811-21114) (``Registration 
Statement'').
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    The Exchange is submitting this proposed rule change because the 
Index for the Fund does 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 Index meets all such requirements except for those 
set forth in Commentary .01(a)(B)(3).\6\ The Exchange represents that 
(1) except for the requirement under Commentary .01(a)(B)(3) to NYSE 
Arca Equities Rule 5.2(j)(3) that the most heavily weighted component 
stock shall not exceed 25% of the weight of the Index and that the five 
most heavily weighted component stocks shall not exceed 60% of the 
weight of the Index, 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 \7\ under the 
Securities Exchange Act of 1934 (the ``Act'') 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

[[Page 30352]]

hours, trading halts, surveillance \8\ and Information Bulletin to ETP 
Holders, as set forth in prior Commission orders approving the generic 
listing rules applicable to the listing and trading of ICUs.\9\
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    \6\ Specifically, the Index fails to meet the requirement that 
the most heavily weighted component stock shall not exceed 25% of 
the weight of the Index. As of May 27, 2009, the most heavily 
weighted component stock (America Movil) represented 32.65% of the 
Index weight. In addition, the Index fails to meet the requirement 
that the five most heavily weighted component stocks shall not 
exceed 60% of the weight of the Index. As of May 27, 2009, the five 
most heavily weighted component stocks represented 60.64% of the 
Index weight.
    \7\ 17 CFR 240.10A-3.
    \8\ The Exchange may obtain information for surveillance 
purposes via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members of ISG. For a list of current members of 
ISG, see http://www.isgportal.org. However, the Exchange does not 
have in place a comprehensive surveillance agreement with the Bolsa 
Mexicana de Valores and such exchange is not an ISG member.
    \9\ See, e.g., Securities Exchange Act Release Nos. 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); 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); 41983 (October 6, 
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order 
approving rules for listing and trading of ICUs). See e-mail from 
Tim Malinowski, Director, NYSE Euronext, to David Liu, Assistant 
Director, Division of Trading and Markets, Commission, dated June 
17, 2009.
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    Detailed descriptions of the Fund, the Index, 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 or on the Web site for the Fund (http://
www.proshares.com), as applicable.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \10\ of 
the Act, in general, and furthers the objectives of Section 
6(b)(5),\11\ 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 Exchange believes that the 
proposed rule change will facilitate the listing and trading of an 
additional type of exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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: (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) \12\ of the Act and subparagraph (f)(6) of Rule 
19b-4 \13\ thereunder.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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 satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative for 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii),\15\ 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 proposal may 
become operative immediately upon filing. 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.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. At 
least one other series of ICUs listed on the Exchange is based upon the 
Index.\16\ The Commission believes that the listing and trading of the 
Shares do not present any novel or significant issues or impose any 
significant burden on competition, and that waiving the 30-day 
operative delay will benefit the market and investors by providing 
market participants with additional investing choices. For these 
reasons, the Commission designates the proposed rule change as 
operative upon filing.\17\
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    \16\ See Securities Exchange Act Release No. 57320 (February 13, 
2008), 73 FR 9395 (February 20, 2008) (SR-NYSEArca-2008-15) 
(approving the listing and trading of shares of the iShares MSCI 
Mexico Index Fund).
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78(c)(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-2009-53 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2009-53. 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

[[Page 30353]]

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-2009-53 and should be submitted on or before July 16, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-14899 Filed 6-24-09; 8:45 am]

BILLING CODE 8010-01-P