Document ID: SEC-2007-1742-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-12-20T05:00Z

[Federal Register: December 20, 2007 (Volume 72, Number 244)]
[Notices]               
[Page 72424-72426]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20de07-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56969; File No. SR-Amex-2007-53]

 
Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Accelerated Approval of a Proposed Rule Change, as Modified by 
Amendment Nos. 1, 2, and 3 Thereto, and Notice of Amendment No. 3 to 
the Proposed Rule Change Relating to the Listing and Trading of the 
GreenHaven Continuous Commodity Index Fund

 December 14, 2007.
    On May 29, 2007, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder \2\ list and trade shares (``Shares'') of the GreenHaven 
Continuous Commodity Index Fund (``Fund'') pursuant to Commentary .07 
to Amex Rule 1202. On July 31, 2007, Amex filed Amendment No. 1 to the 
proposed rule change, and on November 16, 2007, Amex filed Amendment 
No. 2 to the proposed rule change. The proposed rule change, as 
amended, was published for comment in the Federal Register on November 
26, 2007 for a 15-day comment period.\3\ The Commission did not receive 
any comments regarding the proposal. On December 13, 2007, Amex filed 
Amendment No. 3 to the proposed rule change.\4\ This order approves the 
proposed rule change, as modified by Amendment Nos. 1, 2, and 3 
thereto, on an accelerated basis. Simultaneously, the Commission is 
providing notice of and soliciting comments from interested persons 
regarding Amendment No. 3.
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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. 56802 (November 16, 
2007), 72 FR 65994 (``Notice'').
    \4\ Amendment No. 3 would amend the proposed rule change by: (a) 
Clarifying that only Reuters determines the composition of the Index 
(defined infra), and stating that Reuters: (i) considers information 
about changes to the Index and related matters to be potentially 
market-moving, material, and confidential; and (ii) has policies and 
procedures in place to ensure to prevent the use and dissemination 
of such information; (b) stating that the Web sites for the Fund 
and/or the Exchange will disseminate information the information 
discussed infra (including the composition of the portfolio of the 
Fund) to everyone at the same time; (c) adding information 
concerning halting of trading in the Shares; (d) adding information 
about applicable existing rules that would govern specialists' 
potential conflicts of interest; and (e) stating that the 
Information Circular (described infra) would discuss the regulatory 
jurisdiction over the physical trading of commodities or the futures 
contracts on which the value of the Shares is based, and that there 
is no regulated source of last sale information regarding physical 
commodities.
    The text of Amendment No. 3 to the proposed rule change is 
available at the Commission's Public Reference Room, at the 
Exchange, and at http://www.amex.com.

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I. Description

    As described in the Exchange's proposal,\5\ the Fund's primary 
investment objective is to reflect the performance of the Continuous 
Commodity Total Return Index (the ``Index'' or ``CCI-TR''), over time, 
less the expenses of the operations of the Fund and the Master Fund. 
The Master Fund will invest in a portfolio of exchange-traded futures 
(``Commodity Futures Contracts'') on the commodities comprising the 
Index.\6\
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    \5\ Substantially all of the assets of the Fund will be invested 
in the Master Fund. For a more detailed description of the Fund and 
Master Fund, including their structure, holdings, applicable 
exchange listing and trading rules, disclosure of pricing 
information, surveillance, and other regulation, see Notice at 
65997-66001. Terms not otherwise defined herein have the same 
meaning as the meaning given in the Notice.
    \6\ For information regarding the Commodity Futures Contracts, 
see Notice at 65996-65997.
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    GreenHaven Commodity Services LLC, a Delaware limited liability 
company, will serve as Managing Owner of the Fund and the Master Fund. 
The Managing Owner will serve as the commodity pool operator and 
commodity trading advisor of the Fund and the Master Fund. The Managing 
Owner is registered as a commodity pool operator and commodity trading 
advisor with the Commodity Futures Trading Commission (``CFTC'') and 
with the National Futures Association (``NFA'').\7\
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    \7\ As a registered commodity pool operator and commodity 
trading advisor with respect to both the Fund and the Master Fund, 
the Managing Owner is required to comply with various regulatory 
requirements under the Commodity Exchange Act and the rules and 
regulations of the CFTC and the NFA, including investor protection 
requirements, antifraud prohibitions, disclosure requirements, and 
reporting and recordkeeping requirements.
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II. Commission Findings and Accelerated Approval

    After careful review, the Commission 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.\8\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\9\ which requires that the 
rules of an exchange be designed, among other things, to promote just 
and

[[Page 72425]]

equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.
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    \8\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposal is consistent with 
Section 11A(a)(1)(C)(iii) of the Act,\10\ which sets forth Congress' 
finding that it is in the public interest and appropriate for the 
protection of investors and the maintenance of fair and orderly markets 
to assure the availability to brokers, dealers, and investors of 
information with respect to quotations for and transactions in 
securities. The Exchange represents that futures contract quotes and 
last sale information for the Commodity Futures Contracts are widely 
disseminated through a variety of market data vendors worldwide, 
including Bloomberg and Reuters. In addition, the Exchange further 
represents that complete real-time data for the Commodity Futures 
Contracts is available by subscription from Reuters and Bloomberg. The 
relevant futures exchanges also provide delayed futures information on 
current and past trading sessions and market news free of charge on 
their respective Web sites. The specific contract specifications for 
each Commodity Futures Contract are also available from the various 
futures exchanges on their Web sites as well as other financial 
informational sources. Further, the Web sites for the Fund and/or the 
Exchange, which are publicly accessible at no charge, will disseminate 
the following information to everyone at the same time: (a) The current 
NAV per Share daily and the prior business day's NAV per Share and the 
reported closing price; (b) the mid-point of the bid-ask price in 
relation to the NAV per Share as of the time it is calculated (the 
``Bid-Ask Price''); (c) calculation of the premium or discount of such 
price against the NAV per Share; (d) data in chart form displaying the 
frequency distribution of discounts and premiums of the Bid-Ask Price 
against the NAV per Share, within appropriate ranges for each of the 
four previous calendar quarters; (e) the Prospectus; (f) the 
composition of the portfolio of the Fund; and (g) other applicable 
quantitative information.
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    \10\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    The Commission believes that the proposal to list and trade Shares 
is reasonably designed to promote fair disclosure of information that 
may be necessary to price the Shares appropriately. The Commission 
notes that the Exchange will obtain from the Fund, prior to listing the 
Shares, a representation that the NAV per Share will be calculated 
daily and made available to all market participants at the same time. 
In addition, as mentioned above, the Exchange represents that the Web 
site disclosure of the portfolio composition of the Fund will be made 
to all market participants at the same time. Moreover, the Exchange 
states that: (1) Only Reuters determines the composition of the Index; 
and (2) Reuters (a) considers information about changes to the Index 
and related matters to be potentially market-moving, material, and 
confidential, and (b) has policies and procedures in place to ensure to 
prevent the use and dissemination of such information. Further, the 
trading of the Shares would subject to certain conflict of interest 
provisions set forth in Commentary .07(e) to Amex Rule 1202.\11\ 
Additionally, Commentary .07(g)(3) to Amex Rule 1202 prohibits the 
specialist in the Shares from using any material nonpublic information 
received from any person associated with a member, member organization 
or employee of such person regarding trading by such person or employee 
in the Index commodities, related futures or options on futures, or any 
other related derivatives.
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    \11\ Specifically, Commentary .07(e) provides that the 
prohibitions in Rule 175(c) apply to a specialist in the Shares so 
that the specialist or affiliated person may not act or function as 
a market maker in an underlying asset, related futures contract or 
option or any other related derivative. An affiliated person of the 
specialist consistent with Rule 193 may be afforded an exemption to 
act in a market making capacity, other than as a specialist in the 
Shares on another market center, in the underlying asset, related 
futures or options or any other related derivative. Commentary 
.07(e) further provides that an approved person of an equity 
specialist that has established and obtained Exchange approval for 
procedures restricting the flow of material, non-public market 
information between itself and the specialist member organization, 
and any member, officer, or employee associated therewith, may act 
in a market making capacity, other than as a specialist in the 
Shares on another market center, in the underlying asset or 
commodity, related futures or options on futures, or any other 
related derivatives.
    Commentary .07(e) to Rule 1202 also ensures that specialists 
handling the Shares provide the Exchange with all the necessary 
information relating to their trading in physical assets or 
commodities, related futures contracts and options thereon or any 
other derivative.
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    The Commission also believes that the Exchange's trading halt rules 
are reasonably designed to prevent trading in the Shares when 
transparency is impaired. The Exchange states that trading in the 
Shares will be halted in the event the market volatility halt 
parameters set forth in Amex Rule 117 have been reached. The Exchange 
also states that it will halt trading in the Shares if trading in the 
Commodity Futures Contracts is halted or suspended. Additionally, if 
the value of the Index or the Indicative Fund Value is not being 
disseminated on at least a 15-second basis during the hours the Shares 
trade on the Exchange, the Exchange may halt trading during the day in 
which the interruption to the dissemination of the value of the Index 
or the Indicative Fund Value occurs. If the interruption to the 
dissemination the value of the Index or the Indicative Fund Value 
persists past the trading day in which it occurred, the Exchange will 
halt trading no later than the beginning of the trading day following 
the interruption. Further, with respect to a halt in trading that is 
not specified above, the Exchange may consider other relevant factors 
and the existence of unusual conditions or circumstances that may be 
detrimental to the maintenance of a fair and orderly market.
    The Commission further believes that the trading rules and 
procedures to which the Shares will be subject pursuant to this 
proposal are consistent with the Act. The Exchange has represented that 
the Shares are equity securities subject to Amex's rules governing the 
trading of equity securities.
    In support of this proposal, the Exchange has made the following 
representations:
    (1) The Exchange's surveillance procedures are adequate to properly 
monitor the trading of the Shares. Specifically, Amex will rely on its 
existing surveillance procedures governing Trust Issued Receipts, 
Portfolio Depository Receipts and Index Fund Shares. The Exchange 
states that it currently has in place comprehensive surveillance 
sharing agreements with the InterContinental Exchange, the London 
Metals Exchange, and the New York Mercantile Exchange for the purpose 
of providing information in connection with trading in or related to 
futures contracts traded on their respective exchanges comprising the 
Indexes. The Exchange also notes that the Chicago Board Options 
Exchange, Chicago Mercantile Exchange, and New York Board Of Trade are 
members of the Intermarket Surveillance Group. As a result, the 
Exchange asserts that market surveillance information is available from 
relevant futures exchanges, if necessary, due to regulatory concerns 
that may arise in connection with the Commodity Futures Contracts.
    (2) Prior to the commencement of trading, the Exchange will inform 
its members and member organizations in an Information Circular 
regarding the prospectus delivery requirements

[[Page 72426]]

applicable to the Shares. The Information Circular also will highlight 
the special risks and characteristics of the Fund and Shares, as well 
as applicable Exchange rules. In addition, the Information Circular 
will also reference the fact that there is no regulated source of last 
sale information regarding physical commodities and discuss the 
relevant regulatory jurisdiction over the trading of physical 
commodities or the futures contracts on which the value of the Shares 
is based.

This approval order is based on the Exchange's representations.
    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\12\ for approving the proposed rule change, as modified by 
Amendment Nos. 1, 2, and 3, prior to the 30th day after the date of 
publication of notice in the Federal Register. Amendment No. 3 made 
only minor changes to the overall proposal, which was subject to a 15-
day comment period.\13\ The Commission notes that the present proposal, 
as amended, is similar to prior proposals that the Commission has 
approved,\14\ and is consistent with current Amex listing requirements. 
The Commission does not believe that the proposed rule change, as 
modified by Amendment Nos. 1, 2, and 3, raises any novel regulatory 
issues. Consequently, the Commission believes that it is appropriate to 
permit investors to benefit from these additional investment choices 
without delay. Accordingly, the Commission finds that there is good 
cause, consistent with Section 6(b)(5) of the Act,\15\ to approve the 
proposal, as modified by Amendment Nos. 1, 2, and 3, on an accelerated 
basis.
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    \12\ 15 U.S.C. 78s(b)(2).
    \13\ As mentioned above, the Commission did not receive any 
comments regarding the proposed rule change and Amendment Nos. 1 and 
2 following publication in the Federal Register.
    \14\ See, e.g., Securities Exchange Act Release No. 55632 (April 
13, 2007), 72 FR 19987 (April 20, 2007) (SR-Amex-2006-112) 
(approving the listing and trading of the United States Natural Gas 
Fund, LP); Securities Exchange Act Release No. 53582 (March 31, 
2006), 71 FR 17510 (April 6, 2006) (SR-Amex 2005-127) (approving the 
listing and trading of the United States Oil Fund, LP); and 
Securities Exchange Act Release No. 53105 (January 11, 2006), 71 FR 
3129 (January 19, 2006) (SR-Amex 2005-059) (approving the listing 
and trading of the DB Commodity Index Tracking Fund).
    \15\ 15 U.S.C. 78f(b)(5).
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning Amendment No. 3, including whether it 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-Amex-2007-53 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-Amex-2007-53. 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 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 such 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-Amex-2007-53 and should be 
submitted on or before January 4, 2008.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the proposed rule change (SR-Amex-2007-53), as modified 
by Amendment Nos. 1, 2, and 3 thereto, be, and it hereby is, approved 
on an accelerated basis.
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    \16\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24729 Filed 12-19-07; 8:45 am]

BILLING CODE 8011-01-P