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Code · REGISTER · 2008-02-20 · SECURITIES AND EXCHANGE COMMISSION · Notices

Notices. Notice

34,184 words·~155 min read·/register/2008/02/20/08-762·

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BILLING CODE 7710-12-M SECURITIES AND EXCHANGE COMMISSION Submissions for OMB Review; Comment Request; Upon Written Request; Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549-0213 *Extensions:* Rule 163; OMB Control No. 3235-0619; SEC File No. 270-556. Rule 173; OMB Control No. 3235-0618; SEC File No. 270-557. Rule 433; OMB Control No. 3235-0617; SEC File No. 270-558. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Securities and Exchange Commission (“Commission”) has submitted to the Office of Management and Budget these requests for extension of the previously approved collections of information discussed below.
Rule 163 (17 CFR 230.163) provides an exemption from Section 5(c) (15 U.S.C. 77e(c)) under the Securities Act of 1933 (15 U.S.C. 77a *et seq.* ) for certain communications by or on behalf of a well-known seasoned issuer. The information filed under Rule 163 is publicly available. We estimate that it takes approximately .24 burden hours per response to provide the information required under Rule 163 and that the information is filed by 53 respondents for a total annual reporting burden of approximately 13 hours.
We estimate that 25% of .24 hours per response (.06 hours) is prepared by the company for a total annual burden of approximately 3 hours (.06 hours per response × 53 responses). Rule 173 (17 CFR 230.173) provides a notice of registration to investors who purchased securities in a registered offering under the Securities Act of 1933 (15 U.S.C. 77a *et seq.* ). The Rule 173 notice must be provided by each underwriter or dealer to each purchaser of securities. We estimate that it takes approximately .01 hour per response to provide the information required under Rule 173 and that the information is filed by 5,338 companies approximately 43,546 times a year for a total of approximately 232,448,548 responses.
We estimate that the total annual reporting burden for Rule 173 is approximately 2,324,485 hours (.01 hours per response × 232,448,548 responses). Rule 433 (17 CFR 230.433) governs the use and filing of free writing prospectuses under the Securities Act of 1933 (15 U.S.C. 77a *et seq.* ). The purpose of Rule 433 is to reduce restrictions on communications that companies can make to investors during a registered offering, while still maintaining a high level of investor protection.
A free writing prospectus meeting the conditions of Rule 433(d)(1) must be filed with the Commission and is publicly available. We estimate that it takes approximately 1.3 burden hours per response to prepare a free writing prospectus and that the information is filed by 2,906 companies approximately 1.25 times a year for a total of approximately 3,633 responses. We estimate that 25% of the 1.3 burden hours per response (.32 hours) is prepared by the company for total annual reporting burden of approximately 1,163 hours (.32 hours × 3,633 responses).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. Written comments regarding the above information should be directed to the following person:
(i)Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or send an e-mail to *Alexander_T._Hunt@omb.eop.gov* ; and
(ii)R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: *PRA_Mailbox@sec.gov* . Comments must be submitted to OMB within 30 days of this notice. Dated: February 12, 2008. Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3041 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549-0213. Extension: Rule 27d-2; SEC File No. 270-500; OMB Control No. 3235-0566. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collections of information under the Investment Company Act of 1940 (15 U.S.C. 80a) (“Act”) summarized below. The Commission plans to submit these collections of information to the Office of Management and Budget for approval. Rule 27d-2 (17 CFR 270.27d-2) is entitled “Insurance Company Undertaking in Lieu of Segregated Trust Account.” Rule 27d-1 (17 CFR 270.27d-1) 1 under the Act requires the depositor or principal underwriter for an issuer of periodic payment plans to deposit funds into a segregated trust account to provide assurance of its ability to fulfill its refund obligations under sections 27(d) and 27(f). 2 Rule 27d-2 provides an exemption from rule 27d-1 under the Act for depositors or principal underwriters for the issuers of periodic payments plans. In order to comply with the rule:
(i)The depositor or principal underwriter must secure from an insurance company a written guarantee of the refund requirements;
(ii)the insurance company must satisfy certain financial criteria; and
(iii)the depositor or principal underwriter must file as an exhibit to the issuer's registration statement, a copy of the written undertaking, an annual statement that the insurance company has met the requisite financial criteria on a monthly basis, and an annual audited balance sheet. 1 The information collection requirements for rule 27d-1 and Form N-27D-1 are covered in a separate **Federal Register** notice under OMB Control No. 3235-0560. 2 The rule sets forth minimum reserve amounts and guidelines for the management and disbursement of the assets in the account. Rule 27d-1(j) directs depositors and principal underwriters annually to make an accounting of their segregated trust accounts on Form N-27D-1, which is filed with the Commission. The form requires depositors and principal underwriters to report deposits to a segregated trust account, including those made pursuant to paragraphs
(c)and
(e)of the rule. Withdrawals pursuant to paragraph
(f)of the rule also must be reported. In addition, the form solicits information regarding the minimum amount required to be maintained under paragraphs
(d)and
(e)of rule 27d-1. Rules 27d-1 and 27d-2, which were explicitly authorized by statute, provide assurance that depositors and principal underwriters of issuers have access to sufficient cash to meet the demands of certificate holders who reconsider their decisions to invest in a periodic payment plan. The information collection requirements in rules 27d-1 and 27d-2 enable the Commission to monitor compliance with reserve rules. Only one registered investment company has issued a new periodic payment plan certificate within the past 18 months, and the principal underwriter or depositor for this sole issuer relies on the exemption in rule 27d-2. The respondent makes approximately three responses per year. 3 The insurance company provides the written undertaking, annual statement, and certified balance sheet at no cost to the respondent. The staff estimates that the respondent spends approximately one hour per year filing the required documents from the insurance company on EDGAR. Thus, we estimate that the annual burden is approximately 1 hour. 3 The three responses are:
(i)obtaining and filing the written undertaking or an amendment to the undertaking,
(ii)filing the insurance company's annual statement that the financial conditions were satisfied, and
(iii)filing the insurance company's certified balance sheet. The staff believes that rule 27d-2 does not impose any cost burdens other than those arising from the hour burdens discussed above. The estimates of average burden hours and costs are made solely for the purposes of the Paperwork Reduction Act, and are not derived from a comprehensive or even a representative survey or study of the costs of Commission rules and forms. 4 4 These estimates are based on telephone interviews between the Commission staff and representatives of depositors or principal underwriters of periodic payment plan issuers. Complying with the collection of information requirements of rule 27d-2 is mandatory for depositors or principal underwriters of issuers of periodic payment plans who rely on the rule for an exemption from complying with rule 27d-1 and filing Form N-27D-1 (17 CFR 274.127d-1). The information provided pursuant to rule 27d-2 is public and, therefore, will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Written comments are invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility;
(b)the accuracy of the Commission's estimate of the burden of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information collected; and
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-mail to: *PRA_Mailbox@sec.gov* . Dated: February 14, 2008. Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3109 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57322; File No. 10-182] BATS Exchange, Inc.; Notice of Filing of Application and Amendment No. 1 Thereto for Registration as a National Securities Exchange Under Section 6 of the Securities Exchange Act of 1934 February 13, 2008. On November 8, 2007, BATS Exchange, Inc. (“BATS Exchange”) submitted to the Securities and Exchange Commission (“Commission”) a Form 1 application under the Securities Exchange Act of 1934 (“Exchange Act”), seeking registration as a national securities exchange under Section 6 of the Exchange Act. On February 13, 2008, BATS Exchange submitted Amendment No. 1 to its Form 1. The Commission is publishing this notice to solicit comments on BATS Exchange's Form 1, as amended. The Commission will take these comments into consideration in making its determination about whether to grant BATS Exchange's request to be registered as a national securities exchange. The Commission shall grant such registration if it finds that the requirements of the Exchange Act and the rules and regulations thereunder with respect to BATS Exchange are satisfied. 1 1 15 U.S.C. 78s(a). BATS Exchange's Form 1 provides detailed information on how it proposes to satisfy the requirements of the Exchange Act. In general, BATS Exchange will operate a fully automated electronic book for orders to buy or sell securities with a continuous, automated matching function. Liquidity will be derived from orders to buy and orders to sell submitted to BATS Exchange electronically by BATS Exchange members from remote locations. BATS Exchange will not have a trading floor, nor will there be exchange specialists or market makers. BATS Exchange's Form 1 is available at the Commission's Public Reference Room and *www.sec.gov.* Interested persons are invited to submit written data, views, and arguments concerning BATS Exchange's Form 1, including whether BATS Exchange's application is consistent with the Exchange 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 10-182 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number 10-182. 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 BATS Exchange's Form 1 filed with the Commission, and all written communications relating to the application 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. 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 10-182 and should be submitted on or before April 7, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 2 2 17 CFR 200.30-3(a)(71)(i). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3082 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold the following meeting during the week of February 18, 2008: A Closed Meeting will be held on Thursday, February 21, 2008 at 10:45 a.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters may also be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(5), (7), (9)(B), and
(10)and 17 CFR 200.402(a)(5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Casey, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the Closed Meeting scheduled for Thursday, February 21, 2008 will be: Formal orders of investigation; Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings of an enforcement nature; Resolution of litigation claims; and A litigation matter. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at
(202)551-5400. Dated: February 14, 2008. Nancy M. Morris, Secretary. [FR Doc. E8-3161 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Securities Act of 1933, Release No. 8893/February 13, 2008; Securities Exchange Act of 1934, Release No. 57319/February 13, 2008] Order Regarding Review of FASB Accounting Support Fee for 2008 Under Section 109 of the Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 (the “Act”) provides that the Securities and Exchange Commission (the “Commission”) may recognize, as generally accepted for purposes of the securities laws, any accounting principles established by a standard setting body that meets certain criteria. Consequently, Section 109 of the Act provides that all of the budget of such a standard setting body shall be payable from an annual accounting support fee assessed and collected against each issuer, as may be necessary or appropriate to pay for the budget and provide for the expenses of the standard setting body, and to provide for an independent, stable source of funding, subject to review by the Commission. Under Section 109(f) of the Act, the amount of fees collected for a fiscal year shall not exceed the “recoverable budget expenses” of the standard setting body. Section 109(h) amends Section 13(b)(2) of the Securities Exchange Act of 1934 to require issuers to pay the allocable share of a reasonable annual accounting support fee or fees, determined in accordance with Section 109 of the Act. On April 25, 2003, the Commission issued a policy statement concluding that the Financial Accounting Standards Board (“FASB”) and its parent organization, the Financial Accounting Foundation (“FAF”), satisfied the criteria for an accounting standard-setting body under the Act, and recognizing the FASB's financial accounting and reporting standards as “generally accepted” under Section 108 of the Act. 1 As a consequence of that recognition, the Commission undertook a review of the FASB's accounting support fee for calendar year 2008. In connection with its review, the Commission also reviewed the budget for the FAF and the FASB for calendar year 2008. 1 Financial Reporting Release No. 70. Section 109 of the Act also provides that the standard setting body can have additional sources of revenue for its activities, such as earnings from sales of publications, provided that each additional source of revenue shall not jeopardize, in the judgment of the Commission, the actual or perceived independence of the standard setter. In this regard, the Commission also considered the interrelation of the operating budgets of the FAF, the FASB and the Governmental Accounting Standards Board (“GASB”), the FASB's sister organization, which sets accounting standards used by state and local government entities. The Commission has been advised by the FAF that neither the FAF, the FASB nor the GASB accept contributions from the accounting profession. After its review, the Commission determined that the 2008 annual accounting support fee for the FASB is consistent with Section 109 of the Act. Accordingly, *It is ordered,* pursuant to Section 109 of the Act, that the FASB may act in accordance with this determination of the Commission. By the Commission. Nancy M. Morris, Secretary. [FR Doc. E8-3036 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57323; File No. SR-NYSE-2008-09] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change, and Amendment No. 1 Thereto, To Permit the Exchange To Modify or Cancel Clearly Erroneous Trades February 13, 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 January 28, 2007, New York Stock Exchange LLC (“NYSE” 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 substantially by NYSE. On February 8, 2008, NYSE submitted Amendment No. 1 to the proposed rule change. 3 NYSE filed the proposed rule change as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b-4(f)(6) thereunder, 5 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange made technical and clarifying revisions to the purpose section and Exhibit 1 of the filing and amended the text of new Rule 128 to allow a request for review of a clearly erroneous execution to be made in person on the Floor of the Exchange. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt new Rule 128 on an interim, six month basis, to permit the Exchange to cancel or adjust clearly erroneous executions if they arise out of the use or operation of any quotation, execution or communication system owned or operated by the Exchange, including those executions that occur in the event of a system disruption, system malfunction or equipment changeover. The text of the proposed rule change is available at *http://www.nyse.com* , the principal office of NYSE, and the Commission's Public Reference Room. 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 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 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 NYSE proposes a new rule to provide the Exchange with the authority to cancel or adjust clearly erroneous trades of securities executed on or through the systems and facilities of the NYSE. Currently, Rule 128B (Publication of Changes, Corrections, Cancellations or Omissions and Verifications of Transactions) permits the NYSE to cancel a trade when all parties agree, such as when the execution in question was erroneous and a Floor Official concurs in the cancellation. However, such action cannot be taken if one or both parties to the trade do not agree to cancel the trade. Additionally, the Exchange has no authority, on its own initiative, to cancel or adjust an execution when such execution is clearly erroneous. Most other national securities exchanges have some version of a clearly erroneous execution rule, and the NYSE is currently in discussions with the Commission to adopt a robust and market-appropriate rule of its own. In the interim, however, the Exchange lacks the authority to cancel or adjust executions of securities in situations where there has been a clearly erroneous trade. In an era of interconnected markets and highly sophisticated electronic trading, the NYSE's inability to cancel or adjust trades presents a risk to the integrity of the equities markets and all related markets. This is because a clearly erroneous order will likely be executed on multiple exchanges, not just the NYSE, but whereas trades executed on other markets will be subject to cancellation and/or adjustment through the enforcement of those markets' clearly erroneous execution rules, trades executed on the NYSE will stand. This would render an unequal result in plainly identical circumstances. To address this gap in otherwise analogous trading situations, the NYSE proposes to adopt an interim rule based on a clearly erroneous trade rule used by NYSE Arca, Inc. 6 The proposed NYSE rule would sunset after six months (subject to renewal by application to the Commission), which will give the NYSE and Commission staff an opportunity to develop a more robust and market-appropriate clearly erroneous execution rule, without risking the integrity of the market in the interim. 6 *See* NYSE Arca Equities Rule 7.10 (Clearly Erroneous Executions). Description of the Proposed Rule The proposed rule sets forth the process through which the Exchange may review certain executions and declare them null and void or otherwise modify their terms. The rule contemplates primarily two scenarios:
(i)Clearly erroneous trades, which are trades where one element of the trade (side of the market, size of the trade, price of the trade, or security symbol) is obviously incorrect and needs to be corrected; and
(ii)trades resulting from extraordinary market conditions or other circumstances in which the cancellation of the trades is necessary in order to maintain a fair and orderly market or to protect the public interest. Among other things, the proposed rule authorizes the NYSE to receive complaints from market participants requesting designated officers of the Exchange to review the terms of the execution and creates a process by which the parties to the trade and the Exchange can conduct the review and determine whether to nullify or modify the execution in question if it is found to be clearly erroneous. Requests for review of a clearly erroneous execution by an officer of the Exchange may be made via telephone, facsimile, e-mail or in person on the Floor of the Exchange. In the event the designated officer of the Exchange determines that the transaction in dispute is clearly erroneous, the officer is authorized to declare the transaction null and void or modify one or more of the terms of the transaction to achieve an equitable rectification of the error placing the parties in the same position, or as close as possible to the same position in which they would have been, had the error not occurred. The proposed rule also provides that the NYSE may, on its own initiative, review trades that it believes are clearly erroneous, and may cancel or modify such trades if necessary to protect the integrity of the markets or the public interest. Such trades may take place in connection with a malfunction or disruption of any systems, electronic communications, and trading facilities of the Exchange, or in connection with extraordinary market conditions or other circumstances. The Exchange believes that errors due to these types of conditions warrant a review irrespective of whether an Exchange member or member organization complains. Moreover, such reviews are consistent with standard industry practices. 7 7 *See, e.g.* , Nasdaq Rule 11890(b). Under the circumstances described above, the provision allows the designated reviewing officer, on his or her own motion, to review these transactions and declare such transactions arising out of the use or operation of such facilities during such period null and void or modify the terms of these transactions if the officer determines that the transactions are clearly erroneous, or that such actions are necessary for the maintenance of a fair and orderly market or for the protection of investors and the public interest. Absent extraordinary circumstances, action by the officer must be taken within 30 minutes of detection of the erroneous transaction, in accordance with the procedures set out in the rule. Appeal Process The proposed rule permits a party affected by the NYSE's decision to cancel or modify a clearly erroneous trade to request an appeal to the Clearly Erroneous Execution Panel (“CEE Panel”) to review the determination, and sets out the process for doing so. The members of the CEE Panel are the NYSE Chief Regulatory Officer (“CRO”), or the CRO's designee, 8 and representatives from two members or member organizations. 9 8 The Exchange represents that a designee of the CRO will be an employee of the Exchange, working closely with and reporting directly to the CRO. The Exchange notes that NYSE Arca Equities Rule 7.10 designates a CEE Panel to independently make appeals decisions and also to overturn or modify actions taken by the Exchange. *See* NYSE Arca Equities Rule 7.10(c)(2). 9 The Exchange shall designate at least 10 member or member organization representatives to be called upon to serve on the CEE Panel. The procedures for both the initial decision and the appeal reflect a balance between giving the parties adequate time to respond to the decision, and the need for market certainty that a trade either will or won't stand. Thus, for example, requests for an appeal must be made via facsimile or e-mail within 30 minutes after the party requesting the appeal is given notification of the initial determination, after which the CEE Panel will review the information and make a final determination to either affirm or overturn or modify the action taken by the Officer. All final determinations made by the CEE Panel are without prejudice to the rights of the parties to the transaction to submit their dispute to arbitration. In order to discourage frivolous or abusive use of the appeal process, the Exchange will assess a $500.00 fee against the Exchange member or member organization that initiated the request for appeal if the outcome of the appeal is to uphold the initial decision of the Exchange officer. Trade Nullification and Price Adjustment for Securities Admitted to Unlisted Trading Privileges on the NYSE (“UTP”) That Are the Subject of Initial Public Offerings (“IPOs”) Pursuant to Rule 12f-2 under the Act, 10 the Exchange may extend unlisted trading privileges to a security that is the subject of an initial public offering when at least one transaction in the subject security has been effected on the national securities exchange or association upon which the security is listed and the transaction has been reported pursuant to an effective transaction reporting plan. The proposed rule provides the Exchange with authority to nullify trades and adjust prices for securities that are the subject of initial public offerings. The Exchange believes that a separate provision is appropriate because the Exchange's intent is always to adjust the price of an opening trade on the Exchange if it is away from the price the issue opens on the listing market. Thus, if the price of the trade is either $1.00 or 10% away from the opening price on the listing market, the trade would be automatically adjusted to the opening price. In such circumstances, the designated reviewing officer shall declare the opening transaction null or adjust the transaction price to the opening price on the listed exchange or association. Clearly erroneous executions of subsequent trades in the subject security will be reviewed in the same manner as those subject to the general guidelines. Consistent with the clearly erroneous executions rule set forth in the proposed rule, this provision also provides an immediate appeal process for determinations. 10 17 CFR 240.12f-2. 2. Statutory Basis The proposed rule change is consistent with the provisions of Section 6 of the Act, 11 in general, and with Section (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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. NYSE believes the proposed rule would place the NYSE on an equal footing with other national securities exchanges. This will promote the integrity of the market and protect the public interest, since it would permit all exchanges to cancel or adjust clearly erroneous trades when such trades occur, rather than canceling them on all other markets, but leaving them standing on only one market. 11 15 U.S.C. 78f. 12 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition NYSE 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 has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and Rule 19b-4(f)(6) thereunder. 14 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 give the Commission written notice of its intent to file 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 Commission has determined to waive the five-day pre-filing period in this case. NYSE has requested that the Commission waive the 30-day operative delay. The Commission notes that the proposed rule is based on a rule that has been previously approved by the Commission. 15 The Commission believes that waiving the 30-day operative delay will allow the Exchange to immediately and timely cancel or adjust trades that it determines to be clearly erroneous under Rule 128. The Commission believes that the addition of this clearly erroneous trade rule is consistent with the protection of investors and the public interest. The Commission hereby designates the proposal as operative upon filing. 16 15 *See supra* note 6. 16 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 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 No. SR-NYSE-2008-09 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2008-09. 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, 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 NYSE. 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-NYSE-2008-09 and should be submitted on or before March 12, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 17 17 17 CFR 200.30-3(A)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3083 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57321; File No. SR-Amex-2008-11] Self-Regulatory Organizations; American Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Delete the AEMI-One Rules February 13, 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 11, 2008, the American Stock Exchange, LLC (“Amex” 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 substantially by the Amex. The Amex has submitted the proposed rule change under 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. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Amex proposes to delete its AEMI-One rules in their entirety because the AEMI-One rules, which have been superseded by the Amex's AEMI rules, are no longer in effect. The text of the proposed rule change is available at *http://www.amex.com,* the principal office of the Amex, and the Commission's Public Reference Room. 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 Amex 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 III below. The Amex 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 Amex proposes to delete the AEMI-One rules in their entirety. The Amex adopted the AEMI-One rules in connection with the implementation of an initial version of AEMI, the Exchange's hybrid market trading platform for equity products and exchange-traded funds, that was operative on a pilot basis prior to the Trading Phase Date. 5 The AEMI-One rules are no longer in effect, having been superseded by the Exchange's AEMI rules on the Trading Phase Date. 5 The Trading Phase Date was the final date set by the Commission for full operation of all automated trading centers that intended to qualify their quotations for trade-through protection under Rule 611 of Regulation NMS, 17 CFR 242.611. The Trading Phase Date was March 5, 2007. According to the Amex, the Exchange initially deployed AEMI in a controlled manner during the AEMI-One pilot program, and the AEMI-One rules that were effective during this period were slightly modified from their AEMI rule counterparts to reflect the different regulatory environments in effect before and after the Trading Phase Date. In its original AEMI-One proposal, the Amex stated that it would delete the AEMI-One rules from its rulebook via a filing with the Commission following the effectiveness of the AEMI rules; 6 that is the purpose of the instant filing. 6 *See* File No. SR-Amex-2006-72, Amendment No. 1 at 5-6 (“The Exchange expects that the AEMI-One Pilot will be in effect for only a few months up until the Trading Phase Date, at which time the AEMI Rules will become effective and will supersede the AEMI-One Rules. The Exchange will then delete the AEMI-One Rules from its rulebook via a filing with the Commission.”) 2. Statutory Basis The Amex believes that the proposed rule change is consistent with Section 6(b) of the Act, 7 in general, and furthers the objectives of Section 6(b)(5) of the Act, 8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and 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. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Amex believes that the proposed rule change does not 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 The Amex has designated the proposed rule change as one that:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b-4(f)(6) thereunder. 10 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Amex to provide the Commission with written notice of its intention to file the proposed rule change, along with a brief description of the text of the proposed rule change, at least five business days prior to filing the proposal with the Commission, or such shorter time as designated by the Commission. The Commission has determined to waive the five-day period in this case. The Amex has requested that the Commission waive the 30-day operative delay. The Commission hereby grants the Amex's request. 11 As discussed above, the Amex's AEMI-One rules are no longer in effect because they have been superseded by the AEMI rules. Accordingly, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because deleting the AEMI-One rules will eliminate potential confusion and ensure that the Amex's rulebook accurately reflects the rules currently in effect on the Amex. 11 For purposes of waiving the 30-day operative delay, the Commission has considered the proposal's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 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-Amex-2008-11 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2008-11. 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 Amex. 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 publicly available. All submissions should refer to File Number SR-Amex-2008-11 and should be submitted on or before March 12, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3060 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57325; File No. SR-Amex-2008-04] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change Related to Index Dissemination Requirements for Index-Linked Securities February 13, 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 January 30, 2008, the American Stock Exchange LLC (“Amex” or the “Exchange”) 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 substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend sections 107D(i) and 107D(h)(3)(ii) of the Amex *Company Guide* (“Company Guide”) to provide that the value of an index or composite value of the indexes underlying an issuance of Index-Linked Securities must be widely disseminated on at least a 15-second basis with respect to an index or indexes containing only securities listed on a national securities exchange, or on at least a 60-second basis with respect to an index or indexes containing foreign country securities. The text of the proposed rule change is available at *http://www.amex.com,* at the Exchange, and at the Commission's Public Reference Room. 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 amend sections 107D(i) and section 107D(h)(3)(ii) of the *Company Guide* for the purpose of conforming the index dissemination requirements relating to Index-Linked Securities to that of Index Fund Shares (“IFSs”) and Portfolio Depository Receipts (“PDRs”) (collectively, exchange-traded funds or “ETFs”). Section 107D(i)(iii) of the *Company Guide* provides that the current value of an index will be widely disseminated at least every 15 seconds. Similarly, section 107D(i)(iv) provides that if the value of an Index-Linked Security is based on more than one index, then the composite value of such indexes must be widely disseminated at least every 15 seconds. As proposed, section 107D(i) of the *Company Guide* would be revised as follows:
(iii)The current value of an index or composite value of more than one
(1)index will be widely disseminated at least every 15 seconds with respect to indexes containing only securities listed on a national securities exchange, or on at least a 60-second basis with respect to indexes containing foreign country securities, provided, however, that if the official index value does not change during some or all of the period when trading is occurring on the Exchange (for example, for indexes of foreign country securities because of time zone differences or holidays in countries where such indexes' component stocks trade) then the last calculated official index value must remain available throughout Exchange trading hours. Accordingly current subparagraph
(iv)to section 107D(i) of the *Company Guide* would be eliminated. In addition, the delisting requirements set forth in section 107D(h)(3)(ii) of the *Company Guide* relating to Index-Linked Securities would similarly need revision due to the proposed change to the index dissemination requirement. The Exchange proposes to amend section 107D(h)(3)(ii) of the *Company Guide* to distinguish the dissemination requirements of an index consisting solely of securities listed on a national securities exchange and those indexes that may contain components that are foreign country securities. Section 107D(h)(3)(ii) of the *Company Guide* reads: “(3) The Exchange will also commence delisting or removal proceedings (unless the Commission has approved the continued trading of the subject index-linked security), under any of the following circumstances: * * *
(ii)if the value of the index or composite value of the indexes is no longer calculated or widely disseminated on at least a 15-second basis; * * * ” As proposed, section 107D(h)(3)(ii) of the *Company Guide* would be revised as follows:
(ii)if the value of the index or composite value of the indexes is no longer calculated or widely disseminated on at least a 15-second basis with respect to indexes containing only securities listed on a national securities exchange, or on at least a 60-second basis with respect to indexes containing foreign country securities, provided, however, that if the official index value does not change during some or all of the period when trading is occurring on the Exchange (for example, for indexes of foreign country securities because of time zone differences or holidays in countries where such indexes' component stocks trade) then the last calculated official index value must remain available throughout Exchange trading hours;* * * This proposal would conform the index dissemination requirements for Index-Linked Securities to those for ETFs as set forth in Commentary .03(b)(ii) to Rule 1000—AEMI
(PDRs)and Commentary .02(b)(ii) to Rule 1000A—AEMI (IFSs). Both ETF Commentaries noted above provide that an index value for an ETF based on an underlying international or global index be widely disseminated by one or more major market data vendors at least every 60 seconds during the time such ETFs are traded on the Exchange. This contrasts with the requirement for an index underlying an ETF based on a domestic index where the underlying index must be updated at least every 15 seconds. If the index value does not change during some or all of the period when trading is occurring on the Exchange, the last official calculated index value must remain available through Exchange trading hours. This 60-second standard reflects limitations, in some instances, on the frequency of intra-day trading information with respect to foreign country securities and the fact that in many cases, trading hours for overseas markets overly only in part, or not at all, with Exchange trading hours. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, the requirements of section 6(b) of the Act. 3 Specifically, the Exchange believes the proposed rule change is consistent with the requirements of section 6(b)(5) Act 4 that the rules of an exchange be designed to prevent fraudulent and manipulative acts, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. 3 15 U.S.C. 78f(b). 4 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not 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 has neither solicited nor received written comments on 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 Amex 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. The Exchange has requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof. The Commission has determined that a 15-day comment period is appropriate in this case. 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-Amex-2008-04 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-2008-04. 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 offices 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-2008-04 and should be submitted on or before March 6, 2008. 5 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 5 Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3088 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57314; File No. SR-CBOE-2007-143] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change Relating to the Imposition of Fines for Minor Rule Violations February 12, 2008. On December 27, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “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 CBOE Rule 17.50 (Imposition of Fines for Minor Rule Violations) and to revise CBOE 17.50(g)(8) (Violations of Exercise and Exercise Advice Rules for Non-Cash-Settled Equity Options). The proposed rule change was published for comment in the **Federal Register** on January 10, 2008. 3 The Commission received no comments regarding the proposal. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 57089 (January 3, 2008), 73 FR 1900. The Exchange proposes to increase and strengthen the sanctions imposed under its Minor Rule Violation Plan (“MRVP”) on any member who fails to submit to the Exchange in a timely manner pursuant to CBOE Rule 11.1 (or a Regulatory Circular issued pursuant to CBOE Rule 11.1) “Advice Cancel” or exercise instruction relating to the exercise or nonexercise of a noncash-settled equity option. The Exchange believes that increasing the fine levels specified with respect to both individual members and member organizations and lengthening the surveillance period from a 12-month period to a rolling 24-month period will serve as an effective deterrent to such violative conduct. 4 4 In addition, as a member of the Intermarket Surveillance Group, the Exchange, as well as certain other self-regulatory organizations (“SROs”) executed and filed on October 29, 2007 with the Commission, a final version of an Agreement pursuant to Section 17(d) of the Act (the “17d-2 Agreement”). As set forth in the 17d-2 Agreement, the SROs have agreed that their respective rules concerning the filing of Expiring Exercise Declarations, also referred to as Contrary Exercise Advices, of options contracts, are common rules. As a result, the proposal to amend CBOE's MRVP will result in further consistency in sanctions among the SROs that are signatories to the 17d-2 Agreement concerning Contrary Exercise Advice violations. 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. 5 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act, 6 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to facilitate transactions in securities, 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. The Commission further believes that CBOE's proposal to increase the fine levels imposed on individuals and member organizations who fail to submit Advice Cancel or exercise instructions in a timely manner is consistent with Sections 6(b)(1) and 6(b)(6) of the Act, 7 which require that the rules of an exchange enforce compliance with, and provide appropriate discipline for, violations of Commission and Exchange rules. In addition, the Commission finds that the proposal is consistent with the public interest, the protection of investors, or otherwise in furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2) under the Act, 8 which governs minor rule violation plans. The Commission believes that the proposed rule change should strengthen the Exchange's ability to carry out its oversight and enforcement responsibilities as an SRO in cases where full disciplinary proceedings are unsuitable in view of the minor nature of the particular violation. 5 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). 6 15 U.S.C. 78f(b)(5). 7 15 U.S.C. 78f(b)(1) and 78f(b)(6). 8 17 CFR 240.19d-1(c)(2). In approving this proposed rule change, the Commission in no way minimizes the importance of compliance with CBOE rules and all other rules subject to the imposition of fines under the MRVP. The Commission believes that the violation of any SRO rules, as well as Commission rules, is a serious matter. However, the MRVP provides a reasonable means of addressing rule violations that do not rise to the level of requiring formal disciplinary proceedings, while providing greater flexibility in handling certain violations. The Commission expects that CBOE would continue to conduct surveillance with due diligence and make a determination based on its findings, on a case-by-case basis, whether a fine of more or less than the recommended amount is appropriate for a violation under the CBOE MRVP or whether a violation requires formal disciplinary action under CBOE Chapter XVII. *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act 9 and Rule 19d-1(c)(2) under the Act, 10 that the proposed rule change (SR-CBOE-2007-143) be, and hereby is, approved and declared effective. 9 15 U.S.C. 78s(b)(2). 10 17 CFR 240.19d-1(c)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3038 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57317; File No. SR-CBOE-2007-151] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change Relating to Linkage Fees I. Introduction On December 20, 2007, Chicago Board Options Exchange, Incorporated (“CBOE” 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 its Options Intermarket Linkage (“Linkage”) fees. The proposed rule change was published for comment in the **Federal Register** on January 9, 2008. 3 The Commission received no comments on the proposal. This order approves the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 57083 (January 2, 2008), 73 FR 1651. II. Description of the Proposal Under the Exchange's current Fees Schedule, Principal (“P”) and Principal Acting as Agent (“P/A”) Orders 4 are charged a transaction fee of $.26 per contract. 5 Satisfaction orders are not assessed Exchange fees. Linkage fees are operating under a pilot program scheduled to expire on July 31, 2008. The Exchange has proposed to increase its Linkage transaction fee for P and P/A Orders from $.26 per contract to $.30 per contract. 4 Under the Plan for the Purpose of Creating and Operating an Options Intermarket Linkage (“Plan”) and Exchange Rule 6.80(12), which tracks the language of the Plan, a “Linkage Order” means an Immediate or Cancel Order routed through the Linkage as permitted under the Plan. There are three types of Linkage Orders:
(i)“P/A Order”, which is an order for the principal account of a specialist (or equivalent entity on another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent;
(ii)“P Order”, which is an order for the principal account of an Eligible Market Maker and is not a P/A Order; and
(iii)“Satisfaction Order,” which is an order sent through the Linkage to notify a member of another Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that Trade-Through. 5 Linkage orders in MNX, NDX and RUT options are also charged a $.10 per contract surcharge fee. *See* CBOE Fees Schedule, Footnote 14. III. Discussion 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 6 and, in particular, the requirements of section 6 of the Act. 7 Specifically, the Commission finds that the proposal is consistent with section 6(b)(4), 8 in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and other persons using its facilities. 6 The Commission has considered the proposed rule change's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). The Exchange has represented that the proposed fee increase would help the Exchange partially offset its costs of crediting Linkage fees and related costs to Designated Primary Market-Makers (“DPMs”) pursuant to the Exchange's DPM Linkage Fees Credit Program. 9 The Commission believes that the proposed increase in fees is reasonable for this purpose. Further, the Commission notes that the fees proposed by CBOE are commensurate with the fees charged by other options exchanges for Linkage Orders. Finally, the Commission notes that the Exchange's fees are operating under a pilot program in effect until July 31, 2008. 10 9 *See* CBOE Fees Schedule, Section 21. 10 *See* CBOE Fees Schedule, footnote 8. IV. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 11 that the proposed rule change (SR-CBOE-2007-151) is approved. 11 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3059 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57315; File No. SR-CHX-2008-01] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment Number 1 Thereto Relating to Participant Fees and Credits February 12, 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 January 31, 2008, the Chicago Stock Exchange, Inc. (“CHX” or “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On February 11, 2008, CHX filed Amendment No. 1 to the proposed rule change. The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The CHX proposes to amend its Schedule of Participant Fees and Credits (the “Fee Schedule”) to modify the fees for the receipt of orders through the CHX Connect network. The text of this proposed rule change is available on the Exchange's Web site at *http://www.chx.com/rules/proposed_rules.htm* , the Exchange, and in the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CHX 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. CHX 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 Through this filing, the Exchange would amend its Fee Schedule to modify the fees for the receipt of orders through the CHX Connect network. 5 Under the current Fee Schedule, the Exchange charges a $10,000 base fee per month to any participant firm that receives orders through the CHX Connect network and charges an additional fee of $.0004 per share for executions that are processed by the network. 6 The Exchange also applies a credit of $.0004 for each provide share executed in the Exchange's Matching System. 7 Through this filing, the Exchange proposes to decrease the monthly base fee to $5,000 per month and apply an increased credit of $.0008 for each provide share executed in the Matching System. 8 This proposed fee change is designed to take effect on February 1, 2008. 5 The Exchange's CHX Connect system is a communications service that allows its participants to route orders to any destination connected to the CHX's network, including
(1)the CHX Matching System;
(2)CHX institutional brokers;
(3)market makers or other broker-dealers connected to the CHX's network, which provide order handling and execution services in the over-the-counter market; and
(4)other destinations (including order-routing vendors) that are connected to the CHX's network. *See* Securities Exchange Act Release No. 54846 (November 30, 2006), 71 FR 71003 (December 7, 2006) (SR-CHX-2006-34). Fees are charged under the Fee Schedule to participants that receive orders through this service. 6 The base fee is prorated in the first month of use, based on the date that a participant firm begins using the service. 7 No credits are carried over from month to month and these credits cannot be used to reduce the base fee below $5,000 per month. 8 These credits may not be used to reduce the overall fee below $5,000 per month. These changes are designed to create incentives for Exchange participants to use the CHX Connect network and for users of the CHX Connect network to send orders to the Exchange's Matching System. The Exchange believes that these fee changes equitably allocate fees among CHX participants (including those participants using the CHX Connect network) while helping to offset the costs of providing the network. 9 9 The CHX had increased the monthly fee to $10,000 per month, effective December 1, 2007. Although the Exchange had notified affected participants of the proposed change, at least one of those participants voiced concerns about the fee increase soon after it took effect. The Exchange has determined that it is appropriate to continue to offer the CHX Connect services, with a reduced monthly fee and an additional incentive to place orders in the Exchange's Matching System for execution. 2. Statutory Basis The proposed rule change is consistent with Section 6(b)(4) of the Act 10 in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members. 10 15 U.S.C. 78f(b)(4). B. Self Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change is filed pursuant to Section 19(b)(3)(A)(ii) of the Act 11 and subparagraph (f)(2) of Rule 19b-4 thereunder 12 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by a self-regulatory organization. Accordingly, the proposal is effective upon Commission receipt of the filing. 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. 13 11 15 U.S.C. 78s(b)(3)(A)(ii). 12 17 CFR 240.19b-4(f)(2). 13 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on February 11, 2008, the date on which CHX filed Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). 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-CHX-2008-01 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-CHX-2008-01. 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 CHX. 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-CHX-2008-01 and should be submitted on or before March 12, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3039 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57316; File No. SR-NSX-2008-01] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto, To Amend Exchange Rule 16 and the Fee Schedule To Modify Fees and Market Data Rebates for AutoEx Transactions and Other Changes February 12, 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 January 30, 2008, the National Stock Exchange, Inc. (“NSX” or “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On February 6, 2008, NSX filed Amendment No. 1 to the proposed rule change. The Exchange filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NSX proposes to amend Exchange Rule 16 and the NSX BLADE SM Fee and Rebate Schedule (the “Fee Schedule”) in order to
(i)modify the fees and market data rebates associated with trading primarily in the automatic mode of order execution (hereinafter “AutoEx”) transactions,
(ii)establish a quarterly *de minimis* threshold amount for tape credits, and
(iii)substitute the current Fee Schedule with a more transparent Fee Schedule in a revised format. The text of the proposed rule change is available at the *http://www.nsx.com* , the Exchange and the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NSX 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 is proposing to modify certain fees and rebates for trades executed in AutoEx as set forth in Rule 11.13(b)(1). In addition, a *de minimis* rebate threshold is proposed which would eliminate market data rebates below a certain quarterly amount. Finally, the Fee Schedule is proposed to be reformatted to best reflect the foregoing. Liquidity Taking Fee in AutoEx Specifically, with respect to securities traded at one dollar or more in AutoEx, the instant filing proposes reducing the per share executed liquidity taking fee from $0.0030 to $0.0025 across Tapes A, B, and C in NSX BLADE for any ETP Holder 5 who, as a liquidity provider, has an average daily volume of at least 50,000 shares executed per trading day (excluding partial trading days and securities under one dollar) for the month in which the executions occurred. The current $0.0030 per share executed liquidity taking fee would remain unchanged with respect to ETP Holders who do not reach such average daily volume during the month. The introduction of a reduced liquidity taking fee upon meeting certain volume requirements is intended to provide an incentive to ETP Holders to post liquidity at NSX, thereby bringing more liquidity to the Exchange. 5 An ETP Holder is a registered broker or dealer that has been issued an Equity Trading Permit by NSX. An ETP Holder will have the status of a “member” of the Exchange as that term is defined in Section 3 of the Act. Liquidity Provider Rebates in AutoEx Further, the Exchange proposes to simplify the Fee Schedule by providing for different rebates for adding liquidity depending on whether the security is in Tape A, B, or C, instead of whether the security is identified a “Designated ETF Share.” Thus, under the proposed Fee Schedule, the rebate for adding liquidity is reduced in Tape A and C securities generally from $0.0030 per share executed to $0.0026 per share executed. The $0.0030 per share executed liquidity providing rebate in Tape B securities remains unchanged except for those Exchange Traded Funds identified as “Designated ETF Shares,” in which case the per share executed liquidity providing rebate is reduced under the proposed Fee Schedule from $0.0035 to $0.0030. The concept of “Designated ETFs” and the associated fee and rebate structure as set forth in the current Fee Schedule is proposed to be eliminated in its entirety and replaced by the foregoing simplified rate structure. However, the distinction between the liquidity provider rebates for the Tape B securities and the Tape A and C securities corresponds to the previous distinction between Designated ETF Shares (which were largely Tape B securities) and Tape A and C securities. NSX made this distinction in its past Fee Schedule between the rebates to provide an incentive to increase trading volume in the Designated ETF Shares. 6 Since these shares are largely Tape B securities that distinction has been retained in this proposed Fee Schedule. Moreover, NSX believes the proposed liquidity provider rebates are not unfairly discriminatory in that all ETP Holders are eligible to trade in Tape A, B, and C securities in AutoEx and may do so at their discretion. 6 *See* Securities Exchange Act Release No. 56883 (December 3, 2007), 72 FR 69269 (December 7, 2007) (SR-NSX-2007-11). Tape Credits in AutoEx The instant filing proposes to eliminate tape credits for trade market data across Tapes A, B, and C in all AutoEx transactions, regardless of the price of the security. Tape credits would remain unchanged with respect to transactions in the Order Delivery mode. De Minimis Rebate Threshold for Market Data Revenue The instant filing proposes to adopt new Exchange Rule 16.2(b)(5) to eliminate quarterly market data revenue rebates which aggregate less than $250 per quarter with respect to any ETP Holder. The Exchange believes that the value of such rebates is outweighed by the associated administrative burden both to the Exchange and to ETP Holders who receive such rebates. Order Delivery and Other Fees and Costs The fees and/or rebates with respect to transactions in the Order Delivery mode of order interaction as set forth in Rule 11.13(b)(2) remain unchanged, except for the application of the *de minimis* tape credit rebate threshold discussed above. Moreover, for purposes of clarification, the execution fee for removing liquidity is the same whether the contra-order is an AutoEx or Order Delivery order. 7 Thus, the fee for taking liquidity from an Order Delivery firm is reflected in the Fee Schedule as taking liquidity in the AutoEx mode. Further, there are no currently proposed changes to the information contained in Section III of the proposed Fee Schedule regarding routing fees. 7 Orders entered via Order Delivery/Automated Response provide liquidity to the Exchange since the Order Delivery/Automated Response mode was designed to prevent an Order Delivery Firm from having two executions for the same liquidity in two different markets—at the Exchange and at the Electronic Communication Network's market. Thus, by definition, an Order Delivery mode of execution would never take liquidity away from the Exchange. The contra-side of an Order Delivery Automated Response will always be conducted using the AutoEx Mode of Rule 11.3(b)(1). New Fee Schedule Format Finally, in addition to the substantive changes to the Fee Schedule as described above, the instant filing proposes the adoption of a new format for its Fee Schedule, which the Exchange believes is more transparent and easier to navigate and understand. The proposed Fee Schedule is renamed as the Exchange's “Fee and Rebate Schedule” and includes the tape credit amounts specified in Rule 16.2(b). The proposed Fee Schedule provides explanatory endnotes and cross references applicable Exchange Rules where necessary or applicable. Rationale The Exchange has determined that the proposed rule change is necessary for competitive reasons. Under the proposed Fee Schedule, the fees paid by a particular ETP Holder will depend on a number of variables, including the mode of order interaction (AutoEx or Order Delivery), the types of securities traded through NSX BLADE (Tapes A, B, or C), the average daily monthly liquidity providing volume, and the price of the securities (with a distinction for those above and below $1.00). These factors are taken into consideration and reflected in the introduction of a reduced liquidity taking fee (provided certain volume thresholds are met) as an incentive to ETP Holders to both post and take liquidity at NSX and the more simplified fee schedule for Tape B securities (in lieu of the longer list of the fees associated with specific Designated ETF Shares 8 ). NSX notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be more attractive. Accordingly, the proposed modifications attempt to keep the fees reflected in the Fee Schedule competitive with fees charged by other venues and to continue to be reasonable and equitably allocated to those ETP Holders that opt to direct orders to NSX. Based upon the information above, the Exchange believes that the proposed rule change is consistent with the protection of investors and the public interest. 8 *See supra* note 6. \ Effective Date and Notice The Exchange intends to make operative the tape rebate structure and new Fee Schedule in accordance with the proposed rule change on February 1, 2008. Pursuant to Exchange Rule 16.1(c), the Exchange will “provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange” through the issuance of a Regulatory Circular of the changes to the Fee Schedule and will provide a copy of the rule filing on the Exchange's Web site ( *http://www.nsx.com* ). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of section 6(b) of the Act, 9 in general, and section 6(b)(4) of the Act, 10 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges. Moreover, the proposed liquidity provider rebates are not discriminatory in that all ETP Holders are eligible to trade in Tape A, B, and C securities in AutoEx and may do so at their discretion. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in 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 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 The foregoing proposed rule change is filed pursuant to section 19(b)(3)(A)(ii) of the Act 11 and subparagraph (f)(2) of Rule 19b-4 thereunder 12 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by a self-regulatory organization. Accordingly, the proposal is effective upon Commission receipt of the filing. 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. 13 11 15 U.S.C. 78s(b)(3)(A)(ii). 12 17 CFR 240.19b-4(f)(2). 13 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on February 6, 2008, the date on which NSX filed Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). 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-NSX-2008-01 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-NSX-2008-01. 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 NSX. 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-NSX-2008-01 and should be submitted on or before March 12, 2008. 14 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 14 Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3040 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57318; File No. SR-NYSEArca-2007-91] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of a Proposed Rule Change, and Amendment No. 1 Thereto, Relating to the Listing and Trading of Six iShares® S&P GSCI TM Commodity-Indexed Trusts February 12, 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 August 30, 2007, 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 substantially prepared by the Exchange. On February 11, 2008, the Exchange filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to list and trade shares of the following trusts under NYSE Arca Equities Rule 8.203: iShares ® S&P GSCI TM Energy Commodity-Indexed Trust; iShares ® S&P GSCI TM Natural Gas Commodity-Indexed Trust; iShares ® S&P GSCI TM Industrial Metals Commodity-Indexed Trust; iShares ® S&P GSCI TM Light Energy Commodity-Indexed Trust; iShares ® S&P GSCI TM Livestock Commodity-Indexed Trust; and iShares ® S&P GSCI TM Non-Energy Commodity-Indexed Trust. 3 The shares will represent units of beneficial interest representing fractional undivided beneficial interests in the net assets of the issuing trust. 3 iShares ® is a registered trademark of Barclays Global Investors, N.A. “S&P GSCI” is a trademark of Standard & Poor's, a division of The McGraw-Hill Companies, Inc. 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, under NYSE Arca Equities Rule 8.203, shares (“Shares”) of the following trusts: iShares ® S&P GSCI TM Energy Commodity-Indexed Trust; iShares ® S&P GSCI TM Natural Gas Commodity-Indexed Trust; iShares ® S&P GSCI TM Industrial Metals Commodity-Indexed Trust; iShares ® S&P GSCI TM Light Energy Commodity-Indexed Trust; iShares ® S&P GSCI TM Livestock Commodity-Indexed Trust; and iShares ® S&P GSCI TM Non-Energy Commodity-Indexed Trust (collectively, the “Trusts”). 4 The objective of each Trust is for the performance of the Shares to correspond generally to the performance of the following indexes, respectively, before payment of the Trust's and the Investing Pool's (as described below) expenses and liabilities: the S&P GSCI TM Energy Total Return Index; S&P GSCI TM Natural Gas Total Return Index; S&P GSCI TM Industrial Metals Total Return Index; S&P GSCI TM Light Energy Total Return Index; S&P GSCI TM Livestock Total Return Index; and S&P GSCI TM Non-Energy Total Return Index (collectively, the “Total Return Indexes”). 5 4 The Sponsor (defined infra) filed Form S-1 for the iShares GS Commodity Industrial Metals Indexed Trust, iShares GS Commodity Light Energy Indexed Trust, iShares GS Commodity Livestock Indexed Trust and iShares GS Commodity Non-Energy Indexed Trust on August 31, 2006. *See* Registration Nos. 333-135823 through 135826. The Sponsor filed Pre-Effective Amendment No 3 to the Form S-1 for the iShares ® S&P GSCI TM Industrial Metals Commodity-Indexed Trust and iShares ® S&P GSCI TM Non-Energy Commodity-Indexed Trust on June 18, 2007. *See* Registration Nos. 333-135825 and 333-135824. The Sponsor filed Form S-1 for the iShares ® S&P GSCI TM Energy Commodity-Indexed Trust and iShares ® S&P GSCI TM Natural Gas Commodity-Indexed Trust on January 23, 2007 and Amendment No. 1 thereto on June 18, 2007. *See* Registration Nos. 333-140162 and 333-140164. These filings are referred to collectively herein as the “Registration Statements.” 5 The Commission approved for listing on the New York Stock Exchange LLC (“NYSE”) shares of the iShares GS Commodity Light Energy Indexed Trust, shares of the iShares GS Commodity Industrial Metals Indexed Trust, shares of the iShares GS Commodity Livestock Indexed Trust, and shares of the iShares GS Commodity Non-Energy Indexed Trust. *See* Securities Exchange Act Release No. 55585 (April 5, 2007), 72 FR 18500 (April 12, 2007) (SR-NYSE-2006-75). None of the Trusts, however, have commenced trading on the NYSE and, following Commission approval of this proposed rule change, will be listed on NYSE Arca rather than on NYSE and will not trade on NYSE. The commodity component of each of the Total Return Indexes is comprised of either one or a group of commodities included in the S&P GSCI TM Commodity Index (“S&P GSCI TM ”), which is a production-weighted index of the prices of a diversified group of futures contracts on physical commodities. Each Total Return Index reflects the return of the corresponding S&P GSCI TM Excess Return Index, described below, together with the return on specified U.S. Treasury securities that are deemed to have been held to collateralize a hypothetical long position in the futures contracts comprising the corresponding index. Each S&P GSCI TM Excess Return Index is calculated based on the same commodities as those in the respective Total Return Index and S&P GS Index (defined below), and reflects the returns that are potentially available through a rolling uncollateralized investment in the contracts comprising the applicable S&P GS Index, as described below. An S&P GSCI TM Excess Return Index does not reflect the return on U.S. Treasury securities used to collateralize positions in futures contracts comprising that index. 6 6 S&P acquired the S&P GSCI (formerly known as the “Goldman Sachs Commodity Index”), the S&P GSCI-ER and the Total Return Indexes from Goldman Sachs & Co., the prior Index Sponsor, effective May 2007. According to the Registration Statements, S&P has represented that it will not modify the determination methodology for the S&P GSCI Total Return Indexes from that existing on the date of transfer (May 9, 2007) for at least one year. Thereafter, there can be no assurance as to whether the methodology will be changed. To date, the Registration Statements for iShares GS Commodity Light Energy Indexed Trust and iShares GS Commodity Livestock Indexed Trust have not been updated to reflect S&P's index acquisitions from Goldman Sachs. The Sponsor of the Trusts, Barclays Global Investors International, Inc., has represented that the Registration Statements for iShares GS Commodity Light Energy Indexed Trust and iShares GS Commodity Livestock Indexed Trust will be updated to reflect S&P's acquisitions prior to commencement of secondary market trading of Shares of such Trusts. Each Trust will attempt to approximate its respective Total Return Index by holding interests in an Investing Pool (described below), which, in turn, holds futures contracts (referred to as CERFs) on the corresponding Excess Return Index, together with cash or other short-term securities used to collateralize the futures positions. a. The Trusts and Investing Pools Each Trust is a Delaware statutory trust that will issue units of beneficial interest called Shares, representing fractional undivided beneficial interests in its net assets. Substantially all of the assets of each Trust consist of holdings of the limited liability company interests of a specified commodity pool (“Investing Pool Interests”), which are the only securities in which the Trust may invest. Specifically, the Trusts will hold interests in the following commodity pools, respectively: iShares ® S&P GSCI TM Energy Commodity-Indexed Investing Pool; iShares ® S&P GSCI TM Natural Gas Commodity-Indexed Investing Pool; iShares ® S&P GSCI TM Industrial Metals Commodity-Indexed Investing Pool; iShares ® S&P GSCI TM Light Energy Commodity-Indexed Investing Pool; iShares ® S&P GSCI TM Livestock Commodity-Indexed Investing Pool; and iShares ® S&P GSCI TM Non-Energy Commodity-Indexed Investing Pool (collectively, “Investing Pools”). Each commodity pool holds long positions in futures contracts on the following indexes, respectively, (collectively, the “Excess Return Indexes”) and will post margin in the form of cash or short-term securities to collateralize these futures positions: S&P GSCI TM Energy Excess Return Index (“S&P GS Energy-ER”); S&P GSCI TM Natural Gas Excess Return Index (“S&P GS Natural Gas-ER”); S&P GSCI TM Industrial Metals Excess Return Index (“S&P GS Industrial Metals-ER”); S&P GSCI TM Light Energy Excess Return Index (“S&P GSLE-ER”); S&P GSCI TM Livestock Excess Return Index (“S&P GS-Livestock-ER”); and S&P GSCI TM Non-Energy Excess Return Index (“S&P GSNE-ER”). Trading on the Chicago Mercantile Exchange (“CME”) Globex electronic trading platform of CERFs based on the GSCI Excess Return Index commenced effective March 12, 2006 for trade date March 13, 2006. Trading in CERFs based on the other Excess Return Indexes is expected to begin shortly before the initial sale of the Shares to the public. The Trusts and the Investing Pools are each commodity pools managed by a commodity pool operator registered as such with the Commodity Futures Trading Commission (“CFTC”). According to the Registration Statements, neither the Trusts nor the Investing Pools are investment companies registered under the Investment Company Act of 1940 (“Investment Company Act”). 7 7 15 U.S.C. 80a *et seq.* According to the Registration Statements, the Shares are intended to constitute a relatively cost-effective means of achieving investment exposure to the performance of the respective Total Return Indexes, which are intended to reflect the performance of a specified group of commodities. Although the Shares will not be the exact equivalent of an investment in the underlying futures contracts and Treasury securities represented by the Total Return Indexes, the Shares are intended to provide investors with an alternative way of participating in the commodities market. b. The Sponsor and Trustee The Sponsor of the Trusts is Barclays Global Investors International, Inc. The Sponsor's primary business function is to act as Sponsor and commodity pool operator of the Trusts and Manager of the Investing Pools, as discussed below. 8 The Advisor to the Investing Pools is Barclays Global Fund Advisors, a California corporation and an indirect subsidiary of Barclays Bank PLC. 8 Barclays Global Investors International, Inc. is a commodity pool operator registered with the CFTC. Barclays Global Investors International, Inc. will also serve as the Manager of the Investing Pools, in which capacity it will serve as commodity pool operator of the Investing Pools and be responsible for their administration. The Manager will arrange for and pay the costs of organizing the Investing Pools. The Manager has delegated some of its responsibilities for administering the Investing Pools to the Administrator, State Street Bank and Trust Company which, in turn, has employed the Investing Pool Administrator and the Tax Administrator (PriceWaterhouse Coopers) to maintain various records on behalf of the Investing Pools. The Trustee is Barclays Global Investors, N.A., a national banking association affiliated with the Sponsor. The Trustee is responsible for the day-to-day administration of the Trusts. Day-to-day administration includes
(1)processing orders for the creation and redemption of Baskets (each Basket an aggregation of 50,000 Shares),
(2)coordinating with the Manager of the Investing Pools the receipt and delivery of consideration transferred to, or by, the Trusts in connection with each issuance and redemption of Baskets, and
(3)calculating the net asset value (“NAV”) of the Trusts on each Business Day. 9 The Trustee has delegated these responsibilities to the Trust Administrator, State Street Bank and Trust Company, a banking corporation that is not affiliated with the Sponsor or the Trustee. 10 Pursuant to NYSE Arca Equities Rule 8.203(e)(4)(ii), a change in the Trustee would require prior notice to and approval by the Exchange. 9 The Registration Statements define “Business Day” as any day
(1)on which none of the following occurs:
(a)the NYSE is closed for regular trading,
(b)the CME is closed for regular trading or
(c)the Federal Reserve transfer system is closed for cash wire transfers, or
(2)the Trustee determines that it is able to conduct business. 10 Except as otherwise specifically noted, the information provided in this proposed rule change relating to the Trusts and the Shares, commodities markets, and related information is based entirely on information included in the Registration Statements. c. The Investing Pools The Investing Pools will hold long positions in CERFs, which are cash-settled futures contracts listed on the CME that have a term of approximately five years after listing and whose settlement at expiration is based on the value of the respective Excess Return Indexes at that time. The Investing Pools will also earn interest on the assets used to collateralize its holdings of CERFs. d. The Total Return Indexes The S&P GSCI TM Industrial Metals Total Return Index is intended to reflect the performance of a group of industrial metal commodities (currently including copper, aluminum, zinc, nickel and lead). The S&P GSCI TM Light Energy Total Return Index is intended to reflect the performance of the same group of commodities included in the S&P GSCI®, but with a reduced weighting for energy commodities. The S&P GSCI TM Livestock Total Return Index is intended to reflect the performance of a group of commodities comprising the livestock component of the S&P GSCI TM (currently including live cattle, live hogs and feeder cattle). The S&P GSCI TM Non-Energy Total Return Index is intended to reflect the performance of a group of non-energy commodities. The S&P GSCI TM Energy Total Return Index is intended to reflect the performance of a group of commodities comprising the energy component of the S&P GSCI TM . The S&P GSCI TM Natural Gas Total Return Index is intended to reflect the performance of the performance of natural gas included in the S&P GSCI TM . Each relevant Index is administered, calculated and published by Standard & Poor's (the “Index Sponsor”). The Excess Return Indexes reflect the return of an uncollateralized investment in the contracts comprising the S&P GSCI TM Energy Index, the S&P GSCI TM Natural Gas Index, the S&P GSCI TM Industrial Metals Index, the S&P GSCI TM Light Energy Index, the S&P GSCI TM Livestock Index, and the S&P GSCI TM Non-Energy Index, respectively (collectively, the “S&P GS Indexes”). In addition, the Excess Return Indexes incorporate the economic effect of “rolling” the contracts included in the S&P GS Indexes as they near expiration. “Rolling” a futures contract means closing out a position in an expiring futures contract and establishing an equivalent position in the contract on the same commodity with the next expiration date. If S&P ceases to maintain the Total Return Indexes, the Trusts, through the Investing Pools, may seek investment results that correspond generally to the performance of a fully collateralized investment in a successor, or, in the opinion of the Manager, reasonably similar indexes to the Total Return Indexes. Each Trust, through its respective Investing Pool, will be a passive investor in CERFs and the cash or Short- Term Securities 11 posted as margin to collateralize the Investing Pool's CERF positions. Neither such Trust nor the respective Investing Pool will engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the value of CERFs or securities posted as margin. Each Investing Pool, and some other types of market participants, will be required to deposit margin with a value equal to 100% of the value of each CERF position at the time it is established. Those market participants not subject to the 100% margin requirement are required to deposit margin generally with a value of 3% to 5% of the established position. Interest paid on the collateral deposited as margin, net of expenses, will be reinvested by the Investing Pool or, at the Trustee's discretion, may be distributed from time to time to the Shareholders. The Investing Pool's profit or loss on its CERF positions should correlate with increases and decreases in the value of the applicable Excess Return Index, although this correlation will not be exact. The interest on the collateral deposited by the Investing Pool as margin, together with the returns corresponding to the performance of the applicable Excess Return Index, is expected to result in a total return for the Investing Pool that corresponds generally, but is not identical, to the applicable Index. Differences between the returns of the Investing Pool and the applicable Index may be based on, among other factors, any differences between the return on the assets used by the Investing Pool to collateralize its CERF positions and the U.S. Treasury rate used to calculate the return component of the Index, timing differences, differences between the weighting of the Investing Pool's proportion of assets invested in CERFs versus the Index, and the payment of expenses and liabilities by the Investing Pool. Each Trust's net asset value will reflect the performance of the applicable Investing Pool, such Trust's sole investment. 11 “Short-Term Securities” means U.S. Treasury Securities or other short-term securities and similar securities, in each case that are eligible as margin deposits under the rules of the CME. The Investing Pools will be managed by the Advisor, which will invest all of the Investing Pools' assets in long positions in respective CERFs and post margin in the form of cash or Short-Term Securities to collateralize the CERF positions. Any cash that the Investing Pool accepts as consideration from the Trusts for Investing Pool Interests will be used to purchase additional CERFs, in an amount that the Advisor determines will enable the Investing Pools to achieve investment results that correspond with the applicable Index, and to collateralize the CERFs. According to the Registration Statements, the Advisor will not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in value of any of the commodities represented by the S&P GSCI TM -ER Indexes or the positions or other assets held by the Investing Pool. e. Futures Contracts on the Excess Return Indexes The assets of the Investing Pools will consist of CERFs and cash or Short-Term Securities posted as margin to collateralize the Investing Pools' CERF positions. Futures contracts and options on futures contracts on the GSCI, which does not reflect the excess return embedded in the GSCI-ER, have been traded on the CME since 1992. CERFs are listed and traded separately from the S&P GSCI futures contracts and options on futures contracts. CERFs trading is subject to the rules of the CME. According to the Registration Statements, CERFs trade on GLOBEX, the CME's electronic trading system, and do not trade through open outcry on the floor of the CME. 12 Transactions in CERFs are cleared through the CME clearinghouse by the trader's futures commission merchant acting as its agent. Under these clearing arrangements, the CME clearinghouse becomes the buyer to each member futures commission merchant representing a seller of the contract and the seller to each member futures commission merchant representing a buyer of the contract. As a result of these clearing arrangements, each trader holding a position in CERFs is subject to the credit risk of the CME clearinghouse and the futures commission merchant carrying its position in CERFs. 12 Trading hours for CERFs on GLOBEX will be as follows: Sunday, 6 p.m. to 2:40 p.m. (next day) (New York Time); Monday to Thursday, 6 p.m. to 2:40 p.m. (next day) and 3 p.m. to 5 p.m. (New York Time). Each CERF is a contract that provides for cash settlement, at expiration, based upon the final settlement value of the applicable Excess Return Index at the expiration of the contract, multiplied by a fixed dollar multiplier. On a daily basis, most market participants with positions in CERFs are obligated to pay, or entitled to receive, cash (known as “variation margin”) in an amount equal to the change in the daily settlement level of the CERF from the preceding trading day's settlement level (or, initially, the contract price at which the position was entered into). Specifically, if the daily settlement price of the contract increases over the previous day's price, the seller of the contract must pay the difference to the buyer, and if the daily settlement price is less than the previous day's price, the buyer of the contract must pay the difference to the seller. Futures contracts also typically require deposits of initial margin as well as payments of daily variation margin as the value of the contracts fluctuate. For most market participants, the initial margin requirement for CERFs is generally expected to be 3% to 5%. Certain market participants (known as “100% margin participants”), however, will be required to deposit with their futures commission merchant (“FCM”) initial margin in an amount equal to 100% of the value of the CERF on the date the position is established. The FCM, in turn, will be required to deliver to the CME clearinghouse initial margin in a specified amount and pledge to the clearinghouse, pursuant to a separate custody arrangement, an amount equal to the remainder of the 100% margin amount posted by 100% margin participants, either from amounts posted by those 100% margin participants or from its own assets. The separate custody arrangement will be either an account with the FCM or a third party custody account. As a result of these arrangements, a 100% margin participant buying a CERF will be subject to substantially greater initial margin requirements than other market participants, but will not be required to pay any additional amounts to its futures commission merchant as variation margin if the value of the CERFs declines. Instead, the futures commission merchant will be obligated to make variation margin payments to the clearinghouse in respect of CERFs held by 100% margin participants, which it will withdraw from the separate custody account (and, in turn, from the 100% margin posted by those participants). If the daily settlement price increases, the futures commission merchant will receive variation margin from the clearinghouse for the account of the 100% margin participant, which it will hold in the separate custody account for the benefit of 100% margin participants. The buyer will not, however, be entitled to receive this variation margin from its futures commission merchant (until the liquidation or final settlement of its CERF position). The buyer will be entitled to receive interest or other income on the assets it has deposited as margin or that are credited to the custody account on its behalf from time to time. Upon liquidation or settlement of a CERF, a 100% margin participant will receive from its futures commission merchant its initial margin deposit, adjusted for variation margin paid or received by the futures commission merchant with respect to the contract during the time it was held by the participant (or the proceeds from liquidation of any investments made with such funds for the benefit of the participant under the terms of its custody arrangement with the carrying futures commission merchant). The 100% margin participants will include any market participant that is
(1)an investment company registered under the Investment Company Act or
(2)an investment fund, commodity pool, or other similar type of pooled trading vehicle (other than a pension plan or fund) that is offered to the public pursuant to an effective registration statement filed under the Securities Act of 1933, 13 regardless of whether it is also registered under the Investment Company Act, and that has its principal place of business in the United States. 13 15 U.S.C. 77a, *et seq.* The Investing Pools will be a 100% margin participants. The Investing Pools will satisfy the 100% margin requirement by depositing with the Clearing FCM 14 cash or Short-Term Securities with a value equal to 100% of the value of each long position in CERFs. 14 The term “Clearing FCM” is defined in the Registration Statement as Goldman, Sachs & Co. or any other futures commission merchant appointed by the Manager as clearing futures commission merchant for the Investing Pool. According to the Registration Statements, CERFs also differ from traditional futures contracts in another significant respect. In contrast to other types of futures contracts, which are typically listed with monthly, bimonthly or quarterly expirations, CERFs will be listed only with approximately five-year expirations. A buyer or seller of CERFs will be able to trade CERFs on the market maintained by the CME and will consequently be able to liquidate its position at any time, subject to the existence of a liquid market. If a party to a CERF wishes to hold its position to expiration, however, it will be necessary to maintain the position for up to five years. According to the Registration Statements, as a CERF nears expiration, it is anticipated, but there can be no assurance, that the CME will list an additional CERF with an approximately five-year expiration. f. The S&P GSCI TM and S&P GS Indexes The S&P GSCI TM itself is an index on a production-weighted basket of principal physical commodities that satisfy specified criteria. The S&P GSCI TM reflects the level of commodity prices at a given time and is designed to be a measure of the performance over time of the markets for these commodities. The commodities represented in the S&P GSCI TM are those physical commodities on which active and liquid contracts are traded on trading facilities in major industrialized countries. The commodities included in the S&P GSCI TM are weighted, on a production basis, to reflect the relative significance (in the view of the Index Sponsor) of those commodities to the world economy. The fluctuations in the level of the S&P GSCI TM are intended generally to correlate with changes in the prices of those physical commodities in global markets. The Index Sponsor makes the official calculations of the value of the S&P GSCI TM and S&P GS Indexes. At present, these calculations are performed continuously and are reported on Reuters Pages GSCI (for S&P GSCI), GSNG (for S&P GS Natural Gas), GSCO (for S&P GS Industrial Metals), GSLE (for S&P GS Light Energy), GSCL (for S&P GS Livestock), GSCN (for S&P GS Non-Energy), and GSCP (for S&P GS Energy), and is updated on Reuters at least every 15 seconds during NYSE Arca Core Trading Session and during business hours on each Business Day on which the offices of the Index Sponsor in New York City are open for business. The calculation for each applicable Index is also updated on Reuters at least every 15 seconds. The settlement price for each Excess Return Index is also reported on the Reuters Pages noted above. If Reuters ceases to publish the value of the S&P GSCI or applicable S&P GS Index or the settlement price of the S&P GSCI TM -ER or the Excess Return Indexes, the Index Sponsor has undertaken to use commercially reasonable efforts to ensure that a comparable reporting service publishes the S&P GSCI TM or applicable S&P GS Index and the applicable Excess Return Index so long as any Shares are outstanding. g. The Index Committee and Index Advisory Panel The Index Sponsor has established an Index Committee to oversee the daily management and operations of the S&P GSCI TM , and is responsible for all analytical methods and calculations. The Index Committee is comprised of three full-time professional members of S&P's staff and two members of Goldman Sachs Group. At each meeting, the Index Committee reviews any issues that may affect index constituents, statistics comparing the composition of the indices to the market, commodities that are being considered as candidates for addition to an index, and any significant market events. In addition, the Index Committee may revise index policy covering rules for selecting commodities, or other matters. S&P considers information about changes to its indices and related matters to be potentially market moving and material. Therefore, all Index Committee discussions are confidential. In addition, the Index Sponsor has established an Index Advisory Panel to assist it with the operation of the S&P GSCI TM . The principal purpose of the Index Advisory Panel is to advise the Index Sponsor with respect to, among other things, the calculation of the S&P GSCI TM , the effectiveness of the S&P GSCI TM as a measure of commodity futures market performance and the need for changes in the composition or the methodology of the S&P GSCI TM . The Index Advisory Panel acts solely in an advisory and consultative capacity. All decisions with respect to the composition, calculation and operation of the S&P GSCI TM are made by the Index Committee. The Index Advisory Panel generally meets in October of each year. Prior to the meeting, the Index Sponsor determines the commodities to be included in the S&P GSCI TM for the following calendar year and the weighting factors for each commodity. The Index Advisory Panel's members receive the proposed composition of the S&P GSCI TM in advance of the meeting and discuss the composition at the meeting. The Index Sponsor also consults the Index Advisory Panel on any other significant matters with respect to the calculation and operation of the S&P GSCI TM . The Index Advisory Panel may, if necessary or practicable, meet at other times during the year as issues arise that warrant its consideration. h. Composition of the S&P GSCI TM In order to be included in the S&P GSCI TM , and the S&P GS Indexes, a contract must satisfy the following eligibility criteria:
(1)The contract must:
(a)Be in respect of a physical commodity and not a financial commodity;
(b)have a specified expiration or term, or provide in some other manner for delivery or settlement at a specified time, or within a specified period, in the future; and
(c)be available, at any given point in time, for trading at least five months prior to its expiration or such other date or time period specified for delivery or settlement.
(2)The commodity must be the subject of a contract that:
(a)Is denominated in U.S. dollars; and
(b)Is traded on or through an exchange, facility or other platform, referred to as a “trading facility,” that has its principal place of business or operations in a country that is a member of the Organization for Economic Cooperation and Development and: i. Makes price quotations generally available to its members or participants (and, if the Index Sponsor is not such a member or participant, to the Index Sponsor) in a manner and with a frequency that is sufficient to provide reasonably reliable indications of the level of the relevant market at any given point in time; ii. Makes reliable trading volume information available to the Index Sponsor with at least the frequency required by the Index Sponsor to make the monthly determinations; iii. Accepts bids and offers from multiple participants or price providers; and iv. Is accessible by a sufficiently broad range of participants.
(3)The price of the relevant contract that is used as a reference or benchmark by market participants, referred to as the “daily contract reference price,” generally must have been available on a continuous basis for at least two years prior to the proposed date of inclusion in the S&P GSCI TM . In appropriate circumstances, however, the Index Sponsor may determine that a shorter time period is sufficient or that historical daily contract reference prices for that contract may be derived from daily contract reference prices for a similar or related contract. The daily contract reference price may be (but is not required to be) the settlement price or other similar price published by the relevant trading facility for purposes of margining transactions or for other purposes.
(4)At and after the time a contract is included in the S&P GSCI TM , the daily contract reference price for that contract must be published between 10:00 a.m. and 4:00 p.m., New York Time, on each Business Day relating to that contract by the trading facility on or through which it is traded and must generally be available to all members of, or participants in, that trading facility (and, if the Index Sponsor is not such a member or participant, to the Index Sponsor) on the same day from the trading facility or through a recognized third-party data vendor. Such publication must include, at all times, daily contract reference prices for at least one expiration or settlement date that is five months or more from the date the determination is made, as well as for all expiration or settlement dates during that five-month period.
(5)Volume data with respect to the contract must be available for at least the three months immediately preceding the date on which the determination is made.
(6)A contract that is not included in the S&P GSCI TM at the time of determination and that is based on a commodity that is not represented in the S&P GSCI TM at that time must, in order to be added to the S&P GSCI TM at that time, have a total dollar value traded, over the relevant period, as the case may be and annualized, of at least $15 billion. The total dollar value traded is the dollar value of the total quantity of the commodity underlying transactions in the relevant contract over the period for which the calculation is made, based on the average of the daily contract reference prices on the last day of each month during the period.
(7)A contract that is already included in the S&P GSCI TM at the time of determination and that is the only contract on the relevant commodity included in the S&P GSCI TM must, in order to continue to be included in the S&P GSCI TM after that time, have a total dollar value traded, over the relevant period, as the case may be and annualized, of at least $5 billion and at least $10 billion during at least one of the three most recent annual periods used in making the determination.
(8)A contract that is not included in the S&P GSCI TM at the time of determination and that is based on a commodity on which there are one or more contracts already included in the S&P GSCI TM at that time must, in order to be added to the S&P GSCI TM at that time, have a total dollar value traded, over the relevant period, as the case may be and annualized, of at least $30 billion.
(9)A contract that is already included in the S&P GSCI TM at the time of determination and that is based on a commodity on which there are one or more contracts already included in the S&P GSCI TM at that time must, in order to continue to be included in the S&P GSCI TM after that time, have a total dollar value traded, over the relevant period, as the case may be and annualized, of at least $10 billion and at least $20 billion during at least one of the three most recent annual periods used in making the determination.
(10)A contract that is:
(a)Already included in the S&P GSCI TM at the time of determination must, in order to continue to be included after that time, have a reference percentage dollar weight of at least 0.10%. The “reference percentage dollar weight” of a contract represents the current value of the quantity of the underlying commodity that is included in the Index at a given time. This figure is determined by multiplying the contract production weight of a contract, or “CPW,” by the average of its daily contract reference prices on the last day of each month during the relevant period. These amounts are summed for all contracts included in the S&P GSCI TM and each contract's percentage of the total is then determined. The CPW of a contract is its weight in the Index.
(b)not included in the S&P GSCI TM at the time of determination must, in order to be added to the S&P GSCI TM at that time, have a reference percentage dollar weight of at least 0.75%.
(11)In the event that two or more contracts on the same commodity satisfy the eligibility criteria:
(a)Such contracts will be included in the S&P GSCI TM in the order of their respective total quantity traded during the relevant period (determined as the total quantity of the commodity underlying transactions in the relevant contract), with the contract having the highest total quantity traded being included first, provided that no further contracts will be included if such inclusion would result in the portion of the S&P GSCI TM attributable to that commodity exceeding a particular level.
(b)if additional contracts could be included with respect to several commodities at the same time, that procedure is first applied with respect to the commodity that has the smallest portion of the S&P GSCI TM attributable to it at the time of determination. Subject to the other eligibility criteria described above, the contract with the highest total quantity traded on that commodity will be included. Before any additional contracts on the same commodity or on any other commodity are included, the portion of the S&P GSCI TM attributable to all commodities is recalculated. The selection procedure described above is then repeated with respect to the contracts on the commodity that then has the smallest portion of the S&P GSCI TM attributable to it. Beginning in 2007, in order for a contract to be included in the S&P GSCI TM ,
(1)the trading facility in which the contract is traded must allow market participants to execute spread transactions, through a single order entry, between the pairs of contract expirations included in the S&P GSCI TM that at any given point in time will be involved in the rolls to be effected in the next three roll periods and
(2)a contract that is not included in the S&P GSCI TM at the time of determination must, in order to be added to the S&P GSCI TM at that time, have a reference percentage dollar weight of at least 1.00%. The contracts currently included in the S&P GSCI TM are all futures contracts traded on the New York Mercantile Exchange, Inc. (“NYM”), the ICE Futures (“ICE”) and its subsidiary, the New York Board of Trade (“NYBOT”), the CME, the Chicago Board of Trade (“CBT”), the Coffee, Sugar & Cocoa Exchange, Inc. (“CSC”), the New York Cotton Exchange (“NYC”), the Kansas City Board of Trade (“KBT”), the COMEX Division of the New York Mercantile Exchange, Inc. (“CMX”) and the London Metal Exchange (“LME”). The futures contracts currently included in the S&P GSCI TM Energy Index, Average Daily Trading Volume (“ADTV”) for January 2007 through July 2007, percentage dollar weights (as of August 13, 2007), market symbols and the exchanges on which they are traded are as follows: Commodity Weight 8/13/07 (percent) ADTV (contracts) Market symbol Trading facility Units WTI Crude Oil 51.43 200,605 CL NYM 1,000 index points. Brent Crude Oil 20.86 235,918 LCO ICE 1,000 barrels. Natural Gas 10.23 111,548 NG NYM 42,000 U.S. gallons. Heating Oil 8.27 70,791 HO NYM 42,000 U.S. gallons. Gas Oil 7.39 88,417 LGO ICE 100 metric tons. RBOB Oil 1.82 79,665 RB NYM 50,000 X PADD. The futures contracts currently included in the S&P GSCI TM Natural Gas Index, ADTV for January 2007 through July 2007, percentage dollar weights (as of August 13, 2007), market symbols and the exchanges on which they are traded are as follows: Commodity Weight 8/13/07 (percent) ADTV (contracts) Market symbol Trading facility Units Natural Gas 100.00 111,548 NG NYM 42,000 U.S. gallons. The futures contracts currently included in the S&P GSCI TM Industrial Metals Index, ADTV for January 2007 through July 2007, percentage dollar weights (as of August 13, 2007), market symbols and the exchanges on which they are traded are as follows: Commodity Weight 8/13/07 (percent) ADTV (contracts) Market symbol Trading facility Units Copper 40.66 14,793 MCU NYM 25,000 lbs. Aluminum 30.14 155,886 MAL LME 25 metric tons. Primary Nickel 11.13 14,543 MNI LME 6 metric tons. Zinc 11.05 48,483 MZN LME 25 metric tons. Standard Lead 7.02 16,998 MPB LME 25 metric tons. The futures contracts currently included in the S&P GSCI TM Light Energy Index, ADTV for January 2007 through July 2007, percentage dollar weights (as of August 13, 2007), market symbols and the exchanges on which they are traded are as follows: Commodity Weight 8/13/07 (percent) ADTV (contracts) Market symbol Trading facility Units WTI Crude Oil 18.97 200,605 CL NYM 1,000 index points. Copper 8.56 14,793 MCU NYM 25,000 lbs. Chicago Wheat 8.10 75,587 W CBOT 5,000 bushels. Brent Crude Oil 7.69 235,918 LCO ICE 1,000 barrels. Aluminum 6.35 155,886 MAL LME 25 metric tons. Corn 6.24 244,756 C CBOT 5,000 bushels. Live Cattle 5.50 36,530 LC CME 40,000 lbs. Gold 4.21 89,976 GC NYM 100 troy ounces. Soybeans 4.17 121,036 S CBOT 5,000 bushels. Natural Gas 3.77 111,548 NG NYM 42,000 U.S. gallons. Lean Hogs 3.16 30,698 LH CME 40,000 lbs. Heating Oil 3.05% 70,791 HO NYM 42,000 U.S. gallons. Kansas City Wheat 2.76 17,238 KW KCE 5,000 bushels. Gas Oil 2.72 88,417 LGO ICE 100 metric tons. Nickel 2.34 14,543 MNI LME 6 metric tons. Zinc 2.33 48,483 MZN LME 25 metric tons. Sugar 2.17 90,166 SB NYBOT 112,000 lbs. Cotton 1.91 26,092 CT NYBOT 50,000 lbs. Coffee 1.51 20,383 KC NYBOT 37,500 lbs. Lead 1.48 16,998 MPB LME 25 metric tons. Feeder Cattle 1.32 4,416 FC CME 50,000 lbs. RBOB Gas 0.67 79,665 RB NYM 50,000 X PADD. Silver 0.57 24,292 SI NYM 5,000 troy ounces. Cocoa 0.45 13,397 CC NYBOT 10 metric tons. The futures contracts currently included in the S&P GSCI TM Livestock Index, ADTV for January 2007 through July 2007, percentage dollar weights (as of August 13, 2007), market symbols and the exchanges on which they are traded are as follows: Commodity Weight 8/13/07 (percent) ADTV (contracts) Market symbol Trading facility Units Live Cattle 55.08 36,530 LC CME 40,000 lbs. Lean Hogs 31.72 30,698 LH CME 40,000 lbs. Feeder Cattle 13.20 4,416 FC CME 50,000 lbs. The futures contracts currently included in the S&P GSCI TM Non-Energy Index, ADTV for January 2007 through July 2007, percentage dollar weights (as of August 13, 2007), market symbols and the exchanges on which they are traded are as follows: Commodity Weight 8/13/07 (percent) ADTV (contracts) Market symbol Trading facility Units Copper 13.56 14,793 MCU NYM 25,000 lbs. Chicago Wheat 12.83 75,587 W CBOT 5,000 bushels. Aluminum 10.06 155,886 MAL LME 25 metric tons. Corn 9.89 244,756 C CBOT 5,000 bushels. Live Cattle 8.71 36,530 LC CME 40,000 lbs. Gold 6.66 89,976 GC NYM 100 troy ounces. Soybeans 6.61 121,036 S CBOT 5,000 bushels. Lean Hogs 5.01 30,698 LH CME 40,000 lbs. Kansas City Wheat 4.37 17,238 KW KCE 5,000 bushels. Nickel 3.71 14,543 MNI LME 6 metric tons. Zinc 3.69 48,483 MZN LME 25 metric tons. Sugar 3.44 90,166 SB NYBOT 112,000 lbs. Cotton 3.03 26,092 CT NYBOT 50,000 lbs. Coffee 2.39 20,383 KC NYBOT 37,500 lbs. Lead 2.34 16,998 MPB LME 25 metric tons. Feeder Cattle 2.09 4,416 FC CME 50,000 lbs. Silver 0.90 24,292 SI NYM 5,000 troy ounces. Cocoa 0.71 13,397 CC NYBOT 10 metric tons. The hours of trading (New York Time) of the commodities in the charts above are as follows: Commodity Trading facility Trading hours (NY time) Crude Oil NYM 10 a.m.-2:30 p.m. Brent Crude Oil ICE 8 p.m.-5 p.m. (next day). Natural Gas NYM 10 a.m.-2:30 p.m. Heating Oil NYM 10:05 a.m.-2:30 p.m. RBOB Gasoline NYM 10:05 a.m.-2:30 p.m. Gas Oil ICE 8 p.m.-5 p.m. (next day). Live Cattle CME 10:05 a.m.-2 p.m. Wheat CBT 10:30 a.m.-2:15 p.m. Aluminum LME 6:55 a.m.-12 p.m. Corn CBT 10:30 a.m.-2:15 p.m. Copper LME 7 a.m.-12 p.m. Soybeans CBT 10:30 a.m.-2:15 p.m. Lean Hogs CME 9:10 a.m.-1 p.m. Gold CMX 8:20 a.m.-1:30 p.m. Sugar CSC 9 a.m.-12 p.m. Cotton NYC 10:30 a.m.-2:15 p.m. Red Wheat KBT 10:30 a.m.-2:15 p.m. Coffee CSC 9:15 a.m.-12:30 p.m. Standard Lead LME 7:05 a.m.-11:50 a.m. Feeder Cattle CME 10:05 a.m.- 2 p.m. Zinc LME 7:10 a.m.-11:55 a.m. Primary Nickel LME 7:10 a.m.-11:55 a.m. Cocoa CSC 8 a.m.-11:50 a.m. Silver CMX 8:25 a.m.-1:25 p.m. The quantity of each of the contracts included in the S&P GSCI TM is determined on the basis of a five-year average, referred to as the “world production average,” of the production quantity of the underlying commodity as published by the United Nations Statistical Yearbook, the Industrial Commodity Statistics Yearbook and other official sources. However, if a commodity is primarily a regional commodity, based on its production, use, pricing, transportation or other factors, the Index Sponsor, may calculate the weight of that commodity based on regional, rather than world, production data. At present, natural gas is the only commodity the weights of which are calculated on the basis of regional production data, with the relevant region defined as North America. The five-year moving average is updated annually for each commodity included in the S&P GSCI TM , based on the most recent five-year period (ending approximately two years prior to the date of calculation and moving backwards) for which complete data for all commodities is available. The CPWs used in calculating the S&P GSCI TM are derived from world or regional production averages, as applicable, of the relevant commodities, and are calculated based on the total quantity traded for the relevant contract and the world or regional production average, as applicable, of the underlying commodity. However, if the volume of trading in the relevant contract, as a multiple of the production levels of the commodity, is below specified thresholds, the CPW of the contract is reduced until the threshold is satisfied. This is designed to ensure that trading in each contract is sufficiently liquid relative to the production of the commodity. In addition, the Index Sponsor performs this calculation on a monthly basis and, if the multiple of any contract is below the prescribed threshold, the composition of the S&P GSCI TM is reevaluated, based on the criteria and weighting procedure described above. This procedure is undertaken to allow the S&P GSCI TM to shift from contracts that have lost substantial liquidity into more liquid contracts during the course of a given year. As a result, it is possible that the composition or weighting of the S&P GSCI TM will change on one or more of these monthly evaluation dates. The likely circumstances under which the Index Sponsor would be expected to change the composition of the Index during a given year, however, are
(1)a substantial shift of liquidity away from a contract included in the Index or its subsidiaries as described above, or
(2)an emergency, such as a natural disaster or act of war or terrorism, that causes trading in a particular contract to cease permanently or for an extended period of time. In either event, the Index Sponsor will consult with the Index Committee in connection with the changes to be made and will publish the nature of the changes, through Web sites, news media or other outlets, with as much prior notice to market participants as is reasonably practicable. Moreover, regardless of whether any changes have occurred during the year, the Index Sponsor reevaluates the composition of the S&P GSCI TM , in consultation with its Index Committee, at the conclusion of each year, based on the above criteria. Other commodities that satisfy that criteria, if any, will be added to the S&P GSCI TM . Commodities included in the S&P GSCI TM that no longer satisfy that criteria, if any, will be deleted. The Index Sponsor also determines whether modifications in the selection criteria or the methodology for determining the composition and weights of and for calculating the S&P GSCI TM are necessary or appropriate in order to assure that the S&P GSCI TM represents a measure of commodity market performance. The Index Sponsor has the discretion to make any such modifications. i. Total Dollar Weight of the S&P GSCI and S&P GS Indexes The total dollar weight of the S&P GSCI TM and each S&P GS Index is the sum of the dollar weight of each of the underlying commodities. The dollar weight of each such commodity on any given day is equal to: • The daily contract reference price; • Multiplied by the appropriate CPW; and • During a roll period, the appropriate “roll weights”(discussed below). The daily contract reference price used in calculating the dollar weight of each commodity on any given day is the most recent daily contract reference price made available by the relevant trading facility, except that the daily contract reference price for the most recent prior day will be used if the exchange is closed or otherwise fails to publish a daily contract reference price on that day. In addition, if the trading facility fails to make a daily contract reference price available or publishes a daily contract reference price that, in the reasonable judgment of the Index Sponsor, reflects manifest error, the relevant calculation will be delayed until the price is made available or corrected; provided, that, if the price is not made available or corrected by 4 p.m. New York Time, the Index Sponsor may, if it deems that action to be appropriate under the circumstances, determine the appropriate daily contract reference price for the applicable futures contract in its reasonable judgment for purposes of the relevant Index calculation. j. Calculation of Total Return Indexes The Total Return Indexes to which the performance of the Shares is linked were established in May of 1991, with the exception of the S&P GSCI TM Light Energy Total Return Index, which was established in April, 2004. Each Total Return Index reflects the return of the applicable Excess Return Index, together with the return on specified U.S. Treasury securities that are deemed to have been held to collateralize a hypothetical long position in the futures contracts comprising the applicable S&P GS Index. k. Calculation of the Excess Return Indexes Because futures contracts have scheduled expirations, or delivery months, as one contract nears expiration it becomes necessary to close out the position in that delivery month and establish a position in the next available delivery month. This process is referred to as “rolling” the position forward. Each Excess Return Index is designed to reflect the return from rolling each contract included in the S&P GSCI TM or applicable S&P GS Index in this manner into the next available delivery month as it nears expiration. This is accomplished by selling the position in the first delivery month and purchasing a position of equivalent value in the second delivery month. If the price of the second contract is lower than the price of the first contract, the “rolling” process results in a greater quantity of the second contract being acquired for the same value. Conversely, if the price of the second contract is higher than the price of the first contract, the “rolling” process results in a smaller quantity of the second contract being acquired for the same value. The value of each Excess Return Index on any S&P GSCI TM Business Day is equal to the product of
(1)the value of the applicable Excess Return Index on the immediately preceding S&P GSCI TM Business Day multiplied by
(2)one plus the contract daily return on the S&P GSCI TM Business Day on which the calculation is made. The value of each Total Return Index on any S&P GSCI TM Business Day is equal to the product of
(1)the value of the Index on the immediately preceding S&P GSCI TM Business Day multiplied by
(2)one plus the sum of the contract daily return 15 and the Treasury bill return on the S&P GSCI TM Business Day on which the calculation is made, multiplied by
(3)one plus the Treasury bill return for each non-S&P GSCI TM Business Day since the immediately preceding S&P GSCI TM Business Day. The Treasury bill return is the return on a hypothetical investment at a rate equal to the interest rate on a specified U.S. Treasury bill. 15 The contract daily return on any given day is equal to the sum, for each of the commodities included in the S&P GSCI TM or the applicable S&P GS Index, of the applicable daily contract reference price on the relevant contract multiplied by the appropriate CPW and the appropriate “roll weight,” divided by the total dollar weight of the such Index on the preceding day, minus one. The “roll weight” of each commodity reflects the fact that the positions in contracts must be liquidated or rolled forward into more distant contract expirations as they near expiration. If actual positions in the relevant markets were rolled forward, the roll would likely need to take place over a period of days. Since the S&P GSCI TM and S&P GS Indexes are designed to replicate the performance of actual investments in the underlying contracts, the rolling process incorporated in such Indexes also takes place over a period of days at the beginning of each month, referred to as the “roll period.” On each day of the roll period, the “roll weights” of the first nearby contract expirations on a particular commodity and the more distant contract expiration into which it is rolled are adjusted, so that the hypothetical position in the contract on the commodity that is included in the applicable Index is gradually shifted from the first nearby contract expiration to the more distant contract expiration. 2. Valuation of CERFs; Computation of Trusts' Net Asset Value On each Business Day on which the NYSE is open for regular trading, as soon as practicable after the close of regular trading of the Shares on the NYSE (normally, 4:15 p.m., New York Time), the Trustee will determine the NAV of the Trusts as of that time. The Trustee will value the Trusts' assets based upon the determination by the Manager, which may act through the Investing Pool Administrator, of the net asset value of the Investing Pool. The Manager will determine the net asset value of the Investing Pool as of the same time that the Trustee determines the net asset value of the Trusts. The Manager will value the Investing Pools' long position in CERFs on the basis of that day's announced CME settlement price for the CERFs. The value of the Investing Pools' CERF position (including any related margin) will equal the product of
(a)the number of CERF contracts owned by the particular Investing Pool and
(b)the settlement price on the date of calculation. If there is no announced CME settlement price for the CERF on a Business Day, the Manager will use the most recently announced CME settlement price unless the Manager determines that that price is inappropriate as a basis for evaluation. 16 The daily settlement price for the CERF is established by the CME shortly after the close of trading in Chicago on each trading day. 16 The Exchange states that the Manager's use of a price that is not the most recently announced CME settlement price, other than on a temporary basis based on extraordinary circumstances, would require Commission approval of an Exchange proposed rule change pursuant to Rule 19b-4. Once the value of the CERFs and interest earned on any assets posted as margin and any other assets of the Investing Pool has been determined, the Manager will subtract all accrued expenses and liabilities of each Investing Pool as of the time of calculation in order to calculate the net asset value of the Investing Pool. The Manager, or the Investing Pool Administrator on its behalf, will then calculate the value of the applicable Trust's Investing Pool Interest and provide this information to the Trustee. Once the value of the Trusts' Investing Pool Interests have been determined and provided to the Trustee, the Trustee will subtract all accrued expenses and other liabilities of each Trust from the total value of the assets of the Trust, in each case as of the calculation time. The resulting amount is the net asset value of the Trust. The Trustee will determine the NAV by dividing the net asset value of the Trust by the number of Shares outstanding at the time the calculation is made. The NAV for each Business Day on which the NYSE is open for regular trading will be distributed through major market data vendors and will be published online at *http://www.ishares.com* , or any successor thereto. The Trusts will update the NAV as soon as practicable after each subsequent NAV is calculated. 3. Creations of Baskets According to the Registration Statements, creation and redemption of interests in the Trusts, and the corresponding creation and redemption of interests in the respective Investing Pools, will generally be effected through transactions in “exchanges of futures for physicals,” or “EFPs.” EFPs involve contemporaneous transactions in futures contracts and the underlying cash commodity or a closely related commodity. In a typical EFP, the buyer of the futures contract sells the underlying commodity to the seller of the futures contract in exchange for a cash payment reflecting the value of the commodity and the relationship between the price of the commodity and the related futures contract. According to the Registration Statements, in the context of CERFs, CME rules permit the execution of EFPs consisting of simultaneous purchases (sales) of CERFs and sales (purchases) of Shares. This mechanism will generally be used by the Trusts in connection with the creation and redemption of Baskets. Specifically, it is anticipated that an Authorized Participant (as described below) requesting the creation of additional Baskets typically will transfer CERFs and cash (or, in the discretion of the Trustee, Short-Term Securities in lieu of cash) to the Trusts in return for Shares. Baskets may be created and redeemed only by Authorized Participants. Each Authorized Participant must:
(1)Be a registered broker-dealer and, if required in connection with its activities, a registered futures commission merchant;
(2)be a DTC Participant;
(3)have entered into an Authorized Participant Agreement; and
(4)be in a position to transfer CERFs and the required cash or Short-Term Securities to, and take delivery of these assets from, the Trustee through one or more accounts. The Trusts will simultaneously contribute to the Investing Pools the CERFs (and any cash or securities) received from the Authorized Participant in return for an increase in its Investing Pool Interests. If an EFP is executed in connection with the redemption of one or more Baskets, an Authorized Participant will transfer to the applicable Trust the interests being redeemed and the Trust will transfer to the Authorized Participant CERFs, cash or Short-Term Securities. In order to obtain the CERFs, cash or Short-Term Securities to be transferred to the Authorized Participant, the Trust will redeem an equivalent portion of its interest in the Investing Pool Interests. The Trusts will offer Shares on a continuous basis on each Business Day, but only in Baskets consisting of 50,000 Shares. Baskets will be typically issued only in exchange for an amount of CERFs and cash (or, in the discretion of the Trustee, Short-Term Securities in lieu of cash) equal to the Basket Amount 17 for the Business Day on which the creation order was received by the Trustee. The Basket Amount for a Business Day will have a per Share value equal to the NAV as of such day. However, orders received by the Trustee after 2:40 p.m., New York Time, will be treated as received on the next following Business Day. The Trustee will notify the Authorized Participants of the Basket Amount on each Business Day. 17 The Basket Amount represents the amount of CERFs and cash (or, in the discretion of the Sponsor, Short-Term Securities in lieu of cash), that an Authorized Participant must transfer in exchange for one Basket, or that an Authorized Participant is entitled to receive in exchange for each Basket surrendered for redemption. The value of the Basket Amount will equal the product of the NAV per Share and the number of Shares constituting a Basket, in each case as of the time of determination. Before the Trusts will issue any Baskets to an Authorized Participant, that Authorized Participant must deliver to the Trustee a creation order indicating the number of Baskets it intends to purchase and providing other details with respect to the procedures by which the Baskets will be transferred. The Trustee will acknowledge the creation order unless it or the Sponsor decides to refuse the order as described in the prospectus. Upon the transfer of
(1)the required consideration of CERFs and cash (or, in the discretion of the Trustee, Short-Term Securities in lieu of cash) in the amounts, and to the accounts, specified by the Trustee, and
(2)the Trustee's transaction fee per Basket (described below), the Trustee will deliver the appropriate number of Baskets to the Depository Trust Company (“DTC”) account of the Authorized Participant. In limited circumstances and with the approval of the Trustee, Baskets may be created for cash, in which case the Authorized Participant will be required to pay any additional issuance costs, including the costs to the applicable Investing Pool of establishing the corresponding CERF position. Only Authorized Participants can transfer the required consideration and receive Baskets in exchange. Authorized Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants that wish to create or redeem Baskets. An Authorized Participant will have no obligation to create or redeem Baskets for itself or on behalf of other persons. An order for one or more baskets may be placed by an Authorized Participant on behalf of multiple clients. The Sponsor and the Trustee will maintain a current list of Authorized Participants. No Shares will be issued unless and until the Trustee receives confirmation that
(1)the required consideration has been received in the account or accounts specified by the Trustee and
(2)the Manager confirms that Investing Pool Interests with an initial value equal to the consideration received for the Shares have been issued to the Trust. It is expected that delivery of the Shares will be made against transfer of consideration on the next Business Day (T+1) following the Business Day on which the creation order is received by the Trustee. If the Trustee has not received the required consideration for the Shares to be delivered on the delivery date, by 11 a.m., New York Time, the Trustee may cancel the creation order. 18 18 The price at which the Shares trade should be disciplined by arbitrage opportunities created by the ability to purchase or redeem shares of the Trust in Basket size. This should help ensure that the Shares will not trade at a material discount or premium to their net asset value or redemption value. 4. Redemptions of Baskets Authorized Participants may typically surrender Baskets in exchange only for an amount of CERFs and cash (or, in the discretion of the Trustee, Short-Term Securities in lieu of cash) equal to the Basket Amount on the Business Day the redemption request is received by the Trustee. However, redemption requests received by the Trustee after 2:40 p.m., New York Time (or, on any day on which the CME is scheduled to close early, after the close of trading of CERFs on the CME on such day), will be treated as received on the next following Business Day. Holders of Baskets who are not Authorized Participants will be able to redeem their Baskets only through an Authorized Participant. It is expected that Authorized Participants may redeem Baskets for their own accounts or on behalf of Shareholders who are not Authorized Participants, but they are under no obligation to do so. Before surrendering Baskets for redemption, an Authorized Participant must deliver to the Trustee a written request indicating the number of Baskets it intends to redeem and providing other details with respect to the procedures by which the required Basket Amount will be transferred. The Trustee will acknowledge the redemption order unless it or the Sponsor decides to refuse the redemption order as described in the Trusts' prospectuses. After the delivery by the Authorized Participant to the Trustee's DTC account of the total number of Shares to be redeemed by an Authorized Participant, the Trustee will deliver to the order of the redeeming Authorized Participant redemption proceeds consisting of CERFs and cash (or, in the discretion of the Trustee, Short-term Securities in lieu of cash). In connection with a redemption order, the redeeming Authorized Participant authorizes the Trustee to deduct from the proceeds of redemption a transaction fee per Basket (described below). In limited circumstances and with the approval of the Trustee, Baskets may be redeemed for cash, in which case the Authorized Participants will be required to pay any additional redemption costs, including the costs to the Investing Pool of liquidating the corresponding CERF position. The Trust will receive these redemption proceeds pursuant to the Trust's contemporaneous redemption of Investing Pool Interests of corresponding value. Shares can be surrendered for redemption only in Baskets consisting of 50,000 Shares each. It is expected that delivery of the CERFs, cash or Short-term Securities to the redeeming Shareholder will be made against transfer of the Baskets on the next Business Day following the Business Day on which the redemption request is received by the Trustee. If the Trustee's DTC account has not been credited with the total number of Shares to be redeemed pursuant to the redemption order by 11 a.m., New York Time, on the delivery date, the Trustee may cancel the redemption order. DTC will accept the Shares for settlement through its book-entry settlement system. Shares do not have any voting rights. 5. Fees and Expenses of the Trustee Each order for the creation of Baskets must be accompanied by a payment to the Trustee of a transaction fee per Basket of $6.50 multiplied by the number of CERFs included in the Basket Amount. For redemption orders, the redeeming Authorized Participant will authorize the Trustee to deduct from the proceeds of the redemption a transaction fee per Basket equal to $6.50 multiplied by the number of CERFs included in the Basket Amount, plus any expenses, taxes or charges (such as stamp taxes or stock transfer taxes or fees) related to the creation or surrender for redemption. The creation and redemption transaction fee per basket is subject to modification from time to time. The Trustee will be entitled to reimburse itself from the assets of the Trusts for all expenses and disbursements incurred by it for extraordinary services it may provide to the Trusts or in connection with any discretionary action the Trustee may take to protect the Trusts or the interests of the holders to the extent not paid by the Sponsor. 6. Dissemination of Information Relating to the Shares The Web site for the Trusts ( *http://www.ishares.com* ), which will be publicly accessible at no charge, will contain the following information:
(a)The prior Business Day's NAV on a per Share basis and the reported closing price;
(b)the mid-point of the bid-ask price 19 in relation to the NAV as of the time the NAV is calculated (the “Bid-Ask Price”);
(c)calculation of the premium or discount of such price against such NAV;
(d)data in chart form displaying the frequency distribution of discounts and premiums of the Bid-Ask Price against the NAV, within appropriate ranges for each of the four previous calendar quarters;
(e)the prospectus;
(f)the holdings of the Trusts, including CERFs, cash and Treasury securities;
(g)the Basket Amount, and
(h)other applicable quantitative information. The Exchange on its Web site at *http://www.nyse.com* will include a hyperlink to the Trusts' Web site at *http://www.ishares.com.* 19 The bid-ask price of Shares is determined using the highest bid and lowest offer as of the time of calculation of the NAV. As described above, the NAV for the Fund will be calculated and disseminated daily. In addition, during the NYSE Arca Core Trading Session (9:30 a.m. to 4:15 p.m., New York Time) for the Trusts, one or more major market data vendors will disseminate information with respect to the Indicative Intra-day Value (as discussed below), recent NAV, and Shares outstanding on a daily basis. The Sponsor for the Trusts (Barclays Global Investors International, Inc.) has represented to the Exchange that the Trustee for the Trusts will make the NAV per Share available to all market participants at the same time. At present, official calculation by the Index Sponsor of the value of each GS Index is performed continuously and is updated on Reuters at least every 15 seconds during NYSE trading hours for the Shares and during business hours on each Business Day (as defined above) on which the offices of the Index Sponsor in New York City are open for business. In the event that the Exchange is open for business on a day that is not an S&P GSCI Business Day, the Exchange will not permit trading of the Shares on that day. In addition, values updated at least every 15 seconds are disseminated on Reuters for the Total Return Indexes during Exchange trading hours. Daily settlement values for the S&P GSCI and S&P GS Indexes, Total Return Indexes and Excess Return Indexes are also widely disseminated. If the relevant trading facility fails to make a daily contract reference price available or publishes a daily contract reference price that, in the reasonable judgment of the Index Sponsor, reflects manifest error, the relevant calculation will be delayed until the price is made available or corrected; provided, that, if the price is not made available or corrected by 4 p.m. New York Time, the Index Sponsor may, if it deems that action to be appropriate under the circumstances, determine the appropriate daily contract reference price for the applicable futures contract in its reasonable judgment for purposes of the relevant calculation. If such actions by the Index Sponsor are implemented on more than a temporary basis, the Exchange will contact the Commission Staff and, as necessary, make an appropriate filing under Rule 19b-4. Various data vendors and news publications publish futures prices and data. Futures quotes and last sale information for the commodities underlying the Index are widely disseminated through a variety of market data vendors worldwide, including Bloomberg and Reuters. In addition, complete real-time data for such futures is available by subscription from Reuters and Bloomberg. The futures exchanges or which the underlying commodities and CERFs trade also provide delayed futures information on current and past trading sessions and market news generally free of charge on their respective Web sites. The specific contract specifications for the futures contracts are also available from the futures exchanges on their Web sites as well as other financial informational sources. 7. Indicative Intra-day Value In order to provide updated information relating to the Trusts for use by investors, professionals, and other persons, one or more major market data vendors will disseminate an updated Indicative Intra-day Value (“IIV”) on a per Share basis. The IIV will be disseminated at least every 15 seconds from 9:30 a.m. to 4:15 p.m., New York Time. The IIV will be calculated based on the cash and collateral in a Basket Amount divided by 50,000, adjusted to reflect the market value of the investments held by the applicable Investing Pool, *i.e.* CERFs. The IIV will not reflect price changes to the price of an underlying commodity between the close of trading of the futures contract at the relevant futures exchange and the close of the Core Trading Session on NYSE Arca at 4:15 p.m. New York Time. The value of a Share may accordingly be influenced by non-concurrent trading hours between NYSE Arca and the various futures exchanges on which the futures contracts based on the Index commodities are traded. The table above lists the trading hours for each of the Index commodities underlying the futures contracts. When the market for futures trading for each of the relevant Index commodities is open, the IIV can be expected to approximate the value per Share of the Basket Amount. IIV on a per Share basis disseminated during the NYSE Arca Core Trading Session should not be viewed as a real time update of the NAV, which is calculated only once a day. 8. Other Characteristics of the Shares General Information. A minimum of two Baskets, representing 100,000 Shares, will be outstanding for each Trust at the commencement of trading on the Exchange. The trading hours for the Shares on the Exchange are the same as those set forth in NYSE Arca Equities Rule 7.34 (Opening, Core Trading, and Late Trading Sessions, 4 a.m. to 8 p.m., New York Time). The minimum trading increment for Shares on the Exchange will be $0.01. Continued Listing Criteria. Under the applicable continued listing criteria, the Shares may be delisted as follows:
(1)Following the initial twelve-month period beginning upon the commencement of trading of the Shares, there are fewer than 50 record and/or beneficial holders of the Shares for 30 or more consecutive trading days;
(2)the value of the Total Return Indexes cease to be calculated by or available from a major market data vendor on at least a 15-second basis from a source unaffiliated with the Sponsor, the Trust or the Trustee;
(3)the IIV ceases to be available on at least a 15-second delayed basis from a major market data vendor; or
(4)such other event shall occur or condition exist that, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. The Exchange will remove Shares from listing and trading upon termination of the Trust. In addition, the Exchange will file a proposed change pursuant to Rule 19b-4 under the Act seeking approval to continue trading the Shares and, unless approved, the Exchange will commence delisting the Shares, if:
(1)The Index Sponsor substantially changes either the applicable Index component selection methodology or the weighting methodology;
(2)a new component is added to the Index (or pricing information is used for a new or existing component) that constitutes more than 10% of the weight of the Index with whose principal trading market the Exchange does not have a comprehensive surveillance sharing agreement;
(3)the Manager uses a price to value the Investing Pool's long position in CERFs based on a price other than the most recently announced CME settlement price, other than on a temporary basis based on extraordinary circumstances; or
(4)a successor or substitute index is used in connection with the Shares. With respect to the successor or substitute index, the Rule 19b-4 filing will address, among other things, the listing and trading characteristics of such index and the Exchange's surveillance procedures applicable thereto. 9. Trading Rules The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. Trading in the Shares on the Exchange will occur in accordance with NYSE Arca Equities Rule 7.34(a). The Exchange has appropriate rules to facilitate transactions in the Shares during this time. Further, NYSE Arca Equities Rules 8.203(g)-(i) sets forth certain restrictions on equity trading permit holders (“ETP Holders”) acting as registered Market Makers in Commodity Index Trust Shares to facilitate surveillance. NYSE Arca Equities Rule 8.203(h) requires that the ETP Holder acting as a registered Market Maker in the Shares provide the Exchange with information relating to its trading in the applicable physical commodities included in, or options, futures or options on futures on, the applicable Index or any other derivatives based on the Index. NYSE Arca Equities Rule 8.203(i) prohibits the ETP Holder acting as a registered Market Maker in the Shares from using any material nonpublic information received from any person associated with an ETP Holder or employee of such person regarding trading by such person or employee in the applicable physical commodities included in, or options, futures or options on futures on, the Index or any other derivatives based on the Index (including the Shares). In addition, as stated above, NYSE Arca Equities Rule 8.203(g) prohibits the ETP Holder acting as a registered Market Maker in the Shares from being affiliated with a market maker in the applicable physical commodities included in, or options, futures or options on futures on, the Index or any other derivatives based on the Index unless adequate information barriers are in place, as provided in NYSE Arca Equities Rule 7.26. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. Trading on the Exchange in the Shares may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include:
(1)The extent to which trading is not occurring in CERFs or the futures contracts included in the applicable Index or Indexes; or
(2)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in Shares will be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange's “circuit breaker” rule. 20 If the value of the Total Return Index associated with a Trust's Shares or the applicable IIV 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 IIV or the Index value occurs. If the interruption to the dissemination of the IIV or the Index 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. Additionally, if the Exchange becomes aware that the NAV is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants. 20 *See* NYSE ARCA Equities Rule 7.12. As a general matter, the Exchange has regulatory jurisdiction over its ETP Holders and any person or entity controlling an ETP Holder. The Exchange also has regulatory jurisdiction over a subsidiary or affiliate of an ETP Holder that is in the securities business. A subsidiary or affiliate of an ETP Holder that does business only in commodities or futures contracts would not be subject to Exchange jurisdiction, but the Exchange could obtain certain information regarding the activities of such subsidiary or affiliate through surveillance sharing agreements with regulatory organizations of which such subsidiary or affiliate is a member. 10. Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products to monitor trading in the Shares. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules. The Exchange's current trading surveillances focus 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 is able to obtain information regarding trading in the Shares, the physical commodities included in, or options, futures or options on futures on, an index underlying an issue of Commodity Index Trust Shares or any other derivatives based on such index, through ETP Holders, in connection with such ETP Holders' proprietary or customer trades which they effect on any relevant market. With regard to the Index components, the Exchange can obtain market surveillance information, including customer identity information, with respect to transactions occurring on the NYM, the Kansas City Board of Trade, ICE and the LME, pursuant to its comprehensive information sharing agreements with each of those exchanges. All of the other trading venues on which current Index components are traded are members of the Intermarket Surveillance Group (“ISG”) and the Exchange therefore has access to all relevant trading information with respect to those contracts without any further action being required on the part of the Exchange. A list of ISG members and affiliate members is available at *http://www.isgportal.com.* In addition, the Exchange will file a proposed change pursuant to Rule 19b-4 under the Act seeking approval to continue trading the Shares if the Index Sponsor adds a new component to an Index (or pricing information is used for a new or existing component) that constitutes more than 10% of the weight of the Index where the principal trading market for such component is not a member or affiliate of ISG or where the Exchange does not have a comprehensive surveillance sharing agreement with such market. 11. Information Bulletin Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares, including risks inherent with trading the Shares during the Opening and Late Trading Sessions when the updated IIV is not calculated and disseminated and suitability recommendation requirements. Specifically, the Information Bulletin will discuss the following:
(1)The procedures for purchases and redemptions of Shares in Baskets;
(2)NYSE Arca Equities Rule 9.2(a), 21 which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares;
(3)how information regarding the IIV is disseminated;
(4)the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and
(5)trading information. For example, the Information Bulletin will advise ETP Holders, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Trusts. The Exchange notes that investors purchasing Shares directly from the Trusts (by delivery of the Basket Amount) will receive a prospectus. ETP Holders purchasing Shares from the Trusts for resale to investors will deliver a prospectus to such investors. 21 NYSE Arca Equities Rule 9.2(a) (“Diligence as to Accounts”) provides that ETP Holders, before recommending a transaction, must have reasonable grounds to believe that the recommendation is suitable for the customer based on any facts disclosed by the customer as to his other security holdings and as to his financial situation and needs. Further, the rule provides, with a limited exception, that prior to the execution of a transaction recommended to a non-institutional customer, the ETP Holders shall make reasonable efforts to obtain information concerning the customer's financial status, tax status, investment objectives, and any other information that they believe would be useful to make a recommendation. *See* Securities Exchange Act Release No. 54026 (June 21, 2006), 71 FR 36850 (June 28, 2006) (SR-PCX-2005-115). In addition, the Information Bulletin will reference that the Trusts are subject to various fees and expenses described in the Registration Statements. The Information Bulletin will also reference the fact that there is no regulated source of last sale information regarding physical commodities, that the Commission has no jurisdiction over the trading of physical commodities or the futures contracts on which the value of the Shares is based. 12. Statutory Basis The basis under the Act for this proposed rule change is the requirement under section 6(b)(5) 22 that an Exchange have rules that are 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, 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. 22 15 U.S.C. 78f(b)(5). 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 has neither solicited nor received written comments on 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 self-regulatory organization 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. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15-day comment period. 23 23 NYSE Arca requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof. 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-2007-91 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-2007-91. 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-NYSEArca-2007-91 and should be submitted on or before March 6, 2008. 24 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 24 Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3042 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57320; File No. SR-NYSEArca-2008-15] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Continue To List and Trade the Shares of the iShares MSCI Mexico Index Fund February 13, 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 January 28, 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. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to continue to list and trade the shares (“Shares”) of the iShares MSCI Mexico Index Fund (“Fund”). The Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Mexican market, as represented by the MSCI Mexico Investable Market Index (“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, 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 continue to list and trade the Shares of the Fund under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing standards for Investment Company Units (“ICUs”). 5 Although the Shares are currently listed and traded on NYSE Arca, the Exchange submits this proposed rule change because, as a result of revisions to the methodology for calculating the Index that were implemented on December 1, 2007, the Shares no longer satisfy all of the “generic” listing requirements of Commentary .01(a)(B) to NYSE Arca Equities Rule 5.2(j)(3) applicable to ICUs based on an international or global index or portfolio. 6 5 ICUs are securities that represent an interest in a registered investment company or similar entity that
(1)holds securities comprising, or otherwise based on or representing an interest in, an index or portfolio of securities, or
(2)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)(i). 6 The generic listing requirements under NYSE Arca Equities Rule 5.2(j)(3) permit the listing and trading of ICUs 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. Specifically, the revised Index fails to satisfy the provisions of Commentary .01(a)(B)(3) to NYSE Arca Equities Rule 5.2(j)(3), which requires that:
(1)The most heavily weighted component shall not exceed 25% of the weight of the Index; and
(2)the five most heavily weighted component stocks shall not exceed 60% of the weight of the Index. 7 The Exchange represents that, except for Commentary .01(a)(B)(3) to NYSE Arca Equities Rule 5.2(j)(3), the Shares currently satisfy all of the generic listing standards under NYSE Arca Equities Rule 5.2(j)(3), and the continued listing standards under NYSE Arca Equities Rules 5.2(j)(3) and 5.5(g)(2) applicable to ICUs continue to apply to the Shares. The Exchange further represents that iShares, Inc. is required to comply with Rule 10A-3 under the Act 8 for the initial and continued listing of the Shares. 7 The Exchange represents that, as of December 3, 2007, the most heavily weighted component of the Index represented 32.2% of the Index weight, and the five most heavily weighted component stocks represented 65.2% of the Index weight. 8 17 CFR 240.10A-3. Detailed descriptions of the Fund, Index (including the methodology used to determine the composition of the Index), procedures and payment requirements 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 Registration Statement 9 or on the Internet Web site for the Fund (http://www.iShares.com), as applicable. 9 *See* Registration Statement on Form N-1A (Post-Effective Amendment) filed by iShares, Inc. with the Commission on December 28, 2007 (File Nos. 033-97598 and 811-09102) (“Registration Statement”). Availability of Information Regarding the Shares and the Index Morgan Stanley Capital International, Inc. (“MSCI”) calculates the Index value for each trading day in the Mexican exchange market, the Bolsa Mexicana de Valores, based on official closing prices in such exchange market and publicly disseminates the Index values for the previous day's close. 10 The Index values are reported periodically in major financial publications and are also available through vendors of financial information. MSCI or another third-party major market data vendor makes available at least every 60 seconds an updated Index value when the Mexican exchange market trading hours overlap with the NYSE Arca Marketplace (as defined in NYSE Arca Equities Rule 1.1(e)) Core Trading Session (9:30 a.m. to 4:15 p.m. Eastern Time or “ET”). 11 Otherwise, when the Bolsa Mexicana de Valores is closed during NYSE Arca Marketplace trading hours, the Fund provides closing Index values on *http://www.ishares.com.* iShares, Inc. causes to be made available daily the names and required number of shares of each of the securities to be deposited in connection with the issuance of the Shares, 12 as well as information relating to the required cash payment representing, in part, the amount of accrued dividends for the Fund. 10 The Exchange notes that, when a broker-dealer or its affiliate, such as MSCI, is involved in the development and maintenance of a stock index upon which a product such as iShares is based, the broker-dealer or its affiliate should have procedures designed specifically to address the improper sharing of information. *See* Securities Exchange Act Release No. 52178 (July 29, 2005), 70 FR 46244, 46246 n.18 (August 9, 2005) (SR-NYSE-2005-41) (describing the procedures which must be in place to prevent the improper sharing of information). The Exchange represents that MSCI has procedures in place that comply with the requirements of Commentary .01(b)(1) to NYSE Arca Equities Rule 5.2(j)(3), which relate to restricted access of information concerning changes and adjustments to the Index. 11 *See* Commentary .01(b)(2)(b) to NYSE Arca Equities Rule 5.2(j)(3) (providing that index values for ICUs based on international or global equity portfolios will be widely disseminated by one or more major market data vendors at least every 60 seconds during the Core Trading Session). *See also* NYSE Arca Equities Rule 7.34 (describing the hours of trading during three trading sessions on the Exchange: Opening Session; Core Trading Session; and Late Trading Session). 12 The closing prices of the securities to be deposited are readily available from, as applicable, the relevant exchanges, automated quotation systems, published or other public sources in Mexico, or online information services such as Bloomberg or Reuters. The exchange rate information required to convert such information into U.S. dollars is also readily available in newspapers and other publications and from a variety of on-line services. In addition, an independent third party calculates and disseminates the Indicative Optimized Portfolio Value or “IOPV” on a per-Share basis through the facilities of the Consolidated Tape Association (“CTA”) at least every 15 seconds during the Core Trading Session. 13 The Fund administrator, State Street Bank and Trust Company, calculates the net asset value (“NAV”) for the Fund once a day on each day that the New York Stock Exchange, LLC is open for trading, generally at 4 p.m. ET. The NAV is also available to the public on *http://www.iShares.com,* from the Fund distributor by means of a toll-free phone number, and to participants of the National Securities Clearing Corporation. 13 The Exchange notes that there is an overlap in trading hours between the Mexican and U.S. markets for the Fund; trading hours on the Bolsa Mexicana de Valores, where the Index stocks are traded, are from 8:30 a.m. to 3 p.m. Central Standard Time. Therefore, the IOPV calculator updates the applicable IOPV at least every 15 seconds to reflect price changes in the Mexican market, and converts such prices into U.S. dollars based on the currency exchange rate. When the Mexican market is closed, but U.S. markets are open from 9:30 a.m. to 4:15 p.m. ET, the IOPV is updated at least every 15 seconds to reflect changes in currency exchange rates after the Mexican market closes. There is also disseminated a variety of data with respect to the Fund on a daily basis by means of CTA and Consolidated Quote High Speed Lines, which is made available prior to the opening of the Core Trading Session on the NYSE Arca Marketplace. Specifically, information with respect to recent NAV, number of shares outstanding, and the estimated and total cash amount per Creation Unit 14 aggregation are made available prior to the opening of the Core Trading Session. The Exchange disseminates quotation and last-sale information for the Shares through the facilities of the CTA. In addition, the Web site for the Fund, which is publicly accessible at no charge, contains the following information, on a per-Share basis, for the Fund:
(1)The prior business day's NAV and the mid-point of the bid-ask price at the time of calculation of such NAV (“Bid/Ask Price”) 15 and a calculation of the premium or discount of such price against such NAV; and
(2)data in chart format displaying the frequency distribution of discounts and premiums of the Bid/Ask Price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. The Fund's holdings are available on the Fund's Web site, and components of the Index are available to subscribers at *http://www.mscibarra.com.* The information on the Fund's Web site will be available to all market participants at the same time. If the Exchange becomes aware that the NAV is not being disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants. 16 14 *See* Registration Statement, *supra* note 9 (defining Creation Unit). 15 The Bid-Ask Price of the Fund is determined using the highest bid and lowest offer on the NYSE Arca Marketplace as of the time of calculation of the Fund's NAV. 16 E-mail from Michael Cavalier, Assistant General Counsel, NYSE Euronext, to Edward Cho and Christopher Chow, Special Counsels, Division of Trading and Markets, Commission, dated February 12, 2008. Trading Rules The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. Shares will trade on the Exchange from 4 a.m. to 8 p.m. ET in accordance with NYSE Arca Equities Rule 7.34. The Exchange represents that it has appropriate rules to facilitate transactions in the Shares during all trading sessions, including rules governing trading halts, as provided in NYSE Arca Equities Rules 5.5(g)(2) and 7.12. Surveillance The Exchange intends to utilize its existing surveillance procedures applicable to derivative products, including ICUs, to monitor trading in the Shares. 17 The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules. The Exchange's current trading surveillance focuses on detecting when securities trade 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. 17 Telephone conversation between Michael Cavalier, Assistant General Counsel, NYSE Euronext, and Christopher Chow, Special Counsel, Division of Trading and Markets, Commission, dated February 12, 2008. The Exchange states that it may obtain information via the Intermarket Surveillance Group (“ISG”) from other exchanges who are members or affiliate members of ISG. In addition, the Exchange has a general policy prohibiting the distribution of material, non-public information by its employees. Information Bulletin The Exchange will inform its ETP Holders 18 in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following:
(1)The procedures for purchases and redemptions of Shares in required unit aggregations (and that Shares are not individually redeemable);
(2)NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares;
(3)how information regarding the IOPV is disseminated;
(4)the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated Index value and IOPV will not be calculated or publicly available;
(5)the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and
(6)trading information. 18 *See* NYSE Arca Equities Rule 1.1 (defining ETP Holder as a registered broker or dealer that is a sole proprietorship, partnership, corporation, limited liability company, or other organization in good standing that has been issued an Equity Trading Permit or “ETP”). In addition, the Bulletin will reference that the Fund is subject to various fees and expenses described in the Registration Statement for the Fund and discuss any exemptive, no-action, or interpretive relief granted by the Commission from the provisions of the Act and the rules thereunder. The Bulletin will also disclose that the NAV for the Shares will be calculated after 4 p.m. ET each trading day. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 19 in general, and furthers the objectives of Section 6(b)(5) of the Act, 20 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. 19 15 U.S.C. 78f(b). 20 15 U.S.C. 78f(b)(5). 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 21 and Rule 19b-4(f)(6) thereunder. 22 21 15 U.S.C. 78s(b)(3)(A). 22 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. 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 continue to list and trade the Shares without interruption. The Exchange states that it has developed adequate trading rules, procedures, surveillance programs, and listing standards for the continued listing and trading of the Shares. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. 23 Given that the Shares, which are currently listed and trading on the Exchange, comply with all of NYSE Arca's initial generic listing standards for ICUs (except for narrowly missing two requirements of Commentary .01(a)(B)(3) to NYSE Arca Equities Rule 5.2(j)(3)), the continued listing and trading of the Shares 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. 23 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). 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-2008-15 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-2008-15. 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-2008-15 and should be submitted on or before March 12, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 24 24 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3081 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57313; File No. SR-Phlx-2008-10] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Payment for Order Flow and Linkage P/A Orders February 12, 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 January 31, 2008, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) 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 substantially prepared by the Exchange. Phlx has designated this proposal as one establishing or changing a due, fee, or other charge imposed by Phlx under section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) 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. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to amend the Exchange's payment for order flow program to eliminate the payment for order flow fee on transactions executed on the Exchange that correspond with an outbound Linkage Principal Acting as Agent (“P/A”) order. This proposal is scheduled to become effective for transactions settling on or after February 1, 2008. Also, the Exchange notes that consistent with its current payment for order flow program, this proposal would remain in effect as a pilot program that is scheduled to expire on the same date as the one-year pilot program in effect in connection with the provisions of Exchange Rule 1080(l) relating to Directed Orders. 5 The current pilot program is scheduled to expire on May 27, 2008. 5 *See* Securities Exchange Act Release No. 55803 (May 23, 2007), 72 FR 30413 (May 31, 2007) (SR-Phlx-2007-37). The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.phlx.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, 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. Phlx 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 Currently, the following payment for order flow fees are in effect at the Exchange: 6
(1)Equity options (other than those equity options that trade as part of the Exchange's Penny Pilot Program) 7 and options on the Russell 2000® Index 8 traded under the symbol RUT, and options on the one-tenth value Russell 2000® Index traded under the symbol RMN, are all assessed $0.70 per contract; and
(2)equity options that trade as part of the Exchange's Penny Pilot Program are assessed $0.25 per contract. Trades resulting from either Directed or non-Directed Orders that are delivered electronically and executed on the Exchange are assessed a payment for order flow fee, 9 while non-electronically-delivered orders ( *i.e.* , represented by a floor broker) are not assessed a payment for order flow fee. 10 6 *See* Securities Exchange Act Release Nos. 53841 (May 19, 2006), 71 FR 30461 (May 26, 2006) (SR-Phlx-2006-33); 54297 (August 9, 2006), 71 FR 47280 (August 16, 2006) (SR-Phlx-2006-47); 54485 (September 22, 2006), 71 FR 57017 (September 28, 2006) (SR-Phlx-2006-56); 55290 (February 13, 2007), 72 FR 8051 (February 22, 2007) (SR-Phlx-2007-05); 55473 (March 14, 2007), 72 FR 13338 (March 21, 2007) (SR-Phlx-2007-12); and 55891 (June 11, 2007), 72 FR 33271 (June 15, 2007) (SR-Phlx-2007-39). 7 The current Penny Pilot Program, in effect through March 27, 2009, permits certain options series to be quoted and traded in increments of $0.01. *See* Securities Exchange Act Release No. 56563 (September 27, 2007), 72 FR 56429 (October 3, 2007) (SR-Phlx-2007-62). 8 The Exchange states that Russell 2000® is a trademark and service mark of the Frank Russell Company, used under license. Neither Frank Russell Company's publication of the Russell Indexes nor its licensing of its trademarks for use in connection with securities or other financial products derived from a Russell Index in any way suggests or implies a representation or opinion by Frank Russell Company as to the attractiveness of investment in any securities or other financial products based upon or derived from any Russell Index. Frank Russell Company is not the issuer of any such securities or other financial products and makes no express or implied warranties of merchantability or fitness for any particular purpose with respect to any Russell Index or any data included or reflected therein, nor as to results to be obtained by any person or any entity from the use of the Russell Index or any data included or reflected therein. 9 Specialists and Directed ROTs who participate in the Exchange's payment for order flow program are assessed a payment for order flow fee, in addition to ROTs. Therefore, the payment for order flow fee is assessed, in effect, on equity option transactions between a customer and an ROT, a customer and a Directed ROT, or a customer and a specialist. 10 Electronically-delivered orders do not include orders delivered through the Floor Broker Management System pursuant to Exchange Rule 1063. Presently, a payment for order flow fee is charged in connection with Linkage P/A orders. For example, if there is an order resting on the Exchange's options limit order book, which is part of the Exchange's trading system, Phlx XL, and a better price is posted at an away market or the requisite volume is available at an away market, that order will be sent through Linkage as a P/A order. When the specialist receives confirmation that the order has been executed, that specialist then completes the transaction by filling the order of the requesting customer. When such order is filled in this way, the specialist must pay a payment for order flow fee. 11 11 For example, if an order is sent to the Exchange and an away market is displaying a better price, that order would be sent to the away market for execution. Specifically, that order would be sent through Linkage as a P/A order. Under the Exchange's current payment for order flow program, no payment for order flow fee would be assessed on this transaction. However, after confirmation is received that the order has been executed, the order of the requesting customer would be filled. Currently, the Exchange states that it would assess the specialist a payment for order flow fee when the customer order is filled; however, this proposal seeks to eliminate the payment for order flow fee for such transaction. *See* E-mail from Cynthia K. Hoekstra, Vice President, Exchange, to Michou Nguyen, Special Counsel, Division of Trading and Markets, Commission, on February 7, 2008. The Exchange states that the purpose of this proposal is to eliminate an undue financial burden that is placed on the specialists as a result of these transactions. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act 12 in general, and furthers the objectives of section 6(b)(4) of the Act 13 in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members. The Exchange believes, at this time, that the specialists should not pay a payment for order flow fee on these transactions as they are merely facilitating this order and they receive little benefit from this order. 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(4). 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 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 The foregoing proposed rule change has been designated as a fee change pursuant to section 19(b)(3)(A)(ii) of the Act 14 and Rule 19b-4(f)(2) 15 thereunder, because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission. At any time within 60 days of the filing of such 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. 14 15 U.S.C. 78s(b)(3)(A)(ii). 15 17 CFR 240.19b-4(f)(2). 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-Phlx-2008-10 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-Phlx-2008-10. 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-Phlx-2008-10 and should be submitted on or before March 12, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-3037 Filed 2-19-08; 8:45 am] BILLING CODE 8011-01-P SELECTIVE SERVICE SYSTEM Form Submitted to the Office of Management and Budget for Extension of Clearance AGENCY: Selective Service System. ACTION: Notice. The following form has been submitted to the Office of Management and Budget
(OMB)for extension of clearance in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35): SSS FORM—404 *Title:* Potential Board Member Information. *Need and/or Use:* Is used to identify individuals willing to serve as members of local, appeal or review boards in the Selective Service System. *Respondents:* Potential board members. *Burden:* A burden of 15 minutes or less on the individual respondent. Copies of the above identified form can be obtained upon written request to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425. Written comments and recommendations for the proposed extension of clearance of the form should be sent within 30 days of the publication of this notice to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425. A copy of the comments should be sent to the Office of Information and Regulatory Affairs, Attention: Desk Officer, Selective Service System, Office of Management and Budget, New Executive Office Building, Room 3235, Washington, DC 20503. Dated: February 4, 2008. Ernest E. Garcia, Deputy Director. [FR Doc. 08-762 Filed 2-19-08; 8:45 am]
Connectionstraces to 14
7 references not yet in our index
  • 15 USC 80a
  • 17 CFR 270.27
  • 17 CFR 274.127
  • Pub. L. 94-409
  • 17 CFR 240.19
  • 17 CFR 240.12
  • 17 CFR 240.10
Citation graph
cites case law
Notices
Notice
U.S.C.§ 3501
C.F.R.§ 230.163
U.S.C.§ 77e
U.S.C.§ 77a
C.F.R.§ 230.173
C.F.R.§ 230.433
U.S.C.§ 78s
U.S.C.§ 552
C.F.R.§ 200.30-3
Cite15 USC 80a
Cite17 CFR 270.27
Cite17 CFR 274.127
Cites 21 · showing 12Cited by 0 across 0 sources
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