Document ID: SEC-2008-1085-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-08-07T04:00Z

[Federal Register: August 7, 2008 (Volume 73, Number 153)]
[Notices]               
[Page 46126-46128]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au08-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58276; File No. SR-NYSEArca-2008-79]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To List and Trade ELEMENTSSM Linked 
to the CS/RT Emerging Infrastructure Total Return Index Powered by 
HOLTTM Due 2023

 July 31, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 22, 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, II, 
and III below, which Items have been prepared by the Exchange. 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 240.19b-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 the ELEMENTSSM 
Linked to the CS/RT Emerging Infrastructure Total Return Index Powered 
by HOLTTM due 2023 (the ``Notes''), which are linked to the 
CS/RT Emerging Infrastructure Total Return Index Powered by 
HOLTTM (U.S. dollar) (the ``Index''). The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NYSE Arca included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. NYSE Arca 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, under NYSE Arca Equities Rule 5.2(j)(6), which includes 
the Exchange's listing standards for Equity Index-Linked Securities.\3\ 
The Notes are senior unsecured debt obligations of Credit Suisse, 
acting through its Nassau Branch (``Credit Suisse''). The Index is 
comprised of 50 equally-weighted exchange-listed emerging 
infrastructure-related companies that are chosen according to a rules-
based methodology for scoring stocks (each an ``Index Component'' and, 
collectively, the ``Index Components''). The Index enables investors to 
participate in the performance of a selection of companies that have a 
focus on infrastructure, power and utilities, or agriculture and derive 
at least 15% of their revenue from the Global Emerging Markets 
(``GEM''). A GEM is defined as any country except the United States, 
Canada, Australia, New Zealand, Japan, Hong Kong, Singapore, Austria, 
Belgium, Luxembourg, Denmark, Finland, France, Germany, Greece, 
Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, and 
the United Kingdom.
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    \3\ Equity Index-Linked Securities 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 
(an ``Equity Reference Asset'').
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    The Exchange is submitting 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) applicable to the listing of Equity Index-
Linked Securities. The Index meets all such requirements except for 
those set forth in NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(vi).\4\ The Exchange represents that: (1) Except 
for NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(vi), the Notes 
currently satisfy all of the generic listing standards under NYSE Arca 
Equities Rule 5.2(j)(6) applicable to Equity Index-Linked Securities; 
(2) the continued listing standards under NYSE Arca Equities Rule 
5.2(j)(6) applicable to Equity Index-Linked Securities shall apply to 
the Notes; and (3) Credit Suisse is required to comply with Rule 10A-3 
\5\ under the Act \6\ 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 such as the Equity Reference Asset 
value, rules and policies governing the trading of equity securities, 
trading hours, trading halts, surveillance, firewall, 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 Index-Linked Securities, generally, and Equity Index-Linked 
Securities, in particular.\7\
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    \4\ NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(vi) provides 
that all component securities of the underlying index shall be 
either (A) securities (other than foreign country securities and 
American Depository Receipts (``ADRs'')) that are (x) issued by an 
Act reporting company or by an investment company registered under 
the Investment Company Act of 1940, which, in each case, are listed 
on a national securities exchange, and (y) an ``NMS stock'' (as 
defined in Rule 600 of Regulation NMS) or (B) foreign country 
securities or ADRs, provided that foreign country securities or 
foreign country securities underlying ADRs having their primary 
trading market outside the United States on foreign trading markets 
that are not members of the Intermarket Surveillance Group (``ISG'') 
or parties to comprehensive surveillance sharing agreements with the 
Exchange will not in the aggregate represent more than 20% of the 
dollar weight of the index. Subject to the pending approval of a 
separate rule filing (Securities Exchange Act Release No. 58142 
(July 11, 2008), 73 FR 41147 (July 17, 2008) (SR-NYSEArca-2008-70)), 
this subsection will be renumbered as NYSE Arca Equities Rule 
5.2(j)(6)(B)(I)(1)(b)(v).
    \5\ 17 CFR 240.10A-3.
    \6\ 15 U.S.C. 78a.
    \7\ See, e.g., Securities Exchange Act Release Nos. 52204 
(August 3, 2005), 70 FR 46559 (August 10, 2005) (SR-PCX-2005-63); 
56637 (October 10, 2007), 72 FR 58704 (October 16, 2007) (SR-
NYSEArca-2007-92); 57132 (January 11, 2008), 73 FR 3300 (January 17, 
2008) (SR-NYSEArca-2007-125); 56838 (November 26, 2007), 72 FR 67774 
(November 30, 2007) (SR-NYSEArca-2007-118); and 56879 (December 3, 
2007), 72 FR 69271 (December 7, 2007) (SR-NYSEArca-2007-110). See e-
mail from Timothy J. Malinowski, Director, NYSE Group, Inc., to 
Brian O'Neill, Staff Attorney, and Edward Cho, Special Counsel, 
Division of Trading and Markets, Commission, dated July 23, 2008.
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    As of April 30, 2008, the market capitalization of the ten largest 
Index Components, accounting for the top 20% of Index weight, was 
approximately $873.9 billion. The highest weighted stock was Vodafone

[[Page 46127]]

Group PLC, which accounted for 2% of the Index weight, and had a market 
capitalization of approximately $209.6 billion.
    With respect to NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(vi), 
which requires that at least 80% of the component stock trade on 
markets that are members of ISG or parties to comprehensive 
surveillance sharing agreements with the Exchange, the Exchange has 
attempted to, but to date has not been able to, enter into 
comprehensive surveillance sharing agreements with markets on which 
approximately 36% of the Index Components trade. Specifically, the 
Exchange does not have comprehensive surveillance sharing agreements 
with Euronext Amsterdam (2%), Euronext Lisbon (2%), Euronext Paris 
(6%), JSE Securities Exchange (Johannesburg) (6%), Borsa Italiana 
(Milan) (4%), Prague Stock Exchange (2%), Bovespa (State of S[atilde]o 
Paulo Stock Exchange) (4%), Singapore Stock Exchange (2%), and Bolsa de 
Madrid (8%), and these markets are not members of ISG. Accordingly, the 
Exchange may not be able to obtain surveillance information from the 
noted exchanges regarding the relevant component stocks.
    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products, including Equity Index-
Linked Securities, to monitor trading in the Notes.\8\ The Exchange 
represents that these procedures are adequate to properly monitor 
Exchange trading of the Notes in all trading sessions and to deter and 
detect violations of Exchange rules. The Exchange's current trading 
surveillance focuses on detecting securities trading outside their 
normal patterns. When such situations are detected, surveillance 
analysis follows and investigations are opened, where appropriate, to 
review the behavior of all relevant parties for all relevant trading 
violations. The Exchange may obtain information via the ISG from other 
exchanges who are members or affiliates of the ISG.\9\
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    \8\ E-mail from Andrew Stevens, Associate General Counsel, NYSE 
Group, Inc., to Brian O'Neill, Staff Attorney, and Edward Cho, 
Special Counsel, Division of Trading and Markets, Commission, dated 
July 30, 2008.
    \9\ For a list of the current members and affiliate members of 
ISG, see www.isgportal.com.
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    Notwithstanding the Notes' inability to meet the requirements of 
NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(1)(b)(vi), the Exchange 
believes that the underlying index is sufficiently broad-based in scope 
and, as such, is less susceptible to manipulation: The index contains 
50 companies, listed in 23 countries with no one exchange listing 
greater than 8% of the companies which is not covered by a 
comprehensive surveillance sharing agreement. The Exchange further 
believes that no one security dominates the underlying index, thereby 
serving to protect the public interest and promote capital formation.
    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 
Prospectus \10\ or on the Web site for the Notes (www.credit-
suisse.com), as applicable.
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    \10\ See Credit Suisse's Prospectus, as amended, filed pursuant 
to Rule 424(b)(2) under the Act (File No. 333-132936-14).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \11\ of the Act, in general, and Section 6(b)(5),\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 mechanisms 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 initial and continued listing and trading 
of the Notes, which promote investor protection in the public interest. 
In addition, the Notes satisfy all requirements of NYSE Arca Equities 
Rule 5.2(j)(6), with the single exception 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

    NYSE Arca 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 (www.sec.gov/
rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2008-79 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-79. 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 (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

[[Page 46128]]

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-2008-79 and should be submitted on or before 
August 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18156 Filed 8-6-08; 8:45 am]

BILLING CODE 8010-01-P