[Federal Register Volume 71, Number 32 (Thursday, February 16, 2006)]
[Notices]
[Pages 8328-8329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-2198]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53261; File No. SR-PCX-2006-02]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
streetTRACKS[reg] Gold Shares Trading Hours

February 9, 2006.
    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 24, 2006, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the PCX. The PCX has filed 
the proposed rule change, pursuant to Section 19(b)(3)(A) of the Act 
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX, through its wholly owned subsidiary PCX Equities, Inc. 
(``PCXE''), proposes to amend its rules governing the Archipelago 
Exchange (``ArcaEx''), the equity trading facility of PCXE. With this 
filing, the Exchange proposes to expand the hours under PCXE Rule 7.34 
that the streetTRACKS[reg] Gold Shares (``Gold Shares'') are eligible 
to trade on ArcaEx pursuant to unlisted trading privileges (``UTP''). 
The Exchange has designated this proposal as non-controversial and has 
requested that the Commission waive the 30-day pre-operative waiting 
period contained in Rule 19b-4(f)(6)(iii) under the Act.\5\
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    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available on the Exchange's 
Internet Web site (http://www.pacificex.com), at the Exchange's 
principal office, 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 PCX 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 Commission previously approved a proposal to trade the Gold 
Shares pursuant to UTP during ArcaEx's core trading session from 9:30 
a.m. Eastern Time (``ET'') until 4:15 p.m. ET.\6\ The Exchange seeks to 
expand the Gold Shares' trading hours, proposing that they should be 
eligible to trade on ArcaEx during the early, core and late trading 
sessions (4 a.m. ET to 8 p.m. ET), in accordance with PCXE Rule 7.34.
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    \6\ See Securities Exchange Act Release No. 51245 (February 23, 
2005), 70 FR 10731 (March 4, 2005) (SR-PCX-2004-117) (``PCX Approval 
Order'').
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    In addition, the Exchange, via a link to the Trust's 
streetTRACKS[reg] Gold Trustsm (``Trust'') Web site (http://www.streettracksgoldshares.com), will provide at no charge, 
continuously updated bids and offers indicative of the spot price of 
gold on its own public Web site: (http://www.pacificex.com), and on 
ArcaEx's Web site at (http://www.archipelago.com).\7\ The Trust Web 
site also provides an intraday calculation of the estimated Net Asset 
Value (``NAV'') (also known as the Intraday Indicative Value or 
``IIV'') of a Gold Share as calculated by multiplying the indicative 
spot price of gold by the quantity of gold backing each Gold Share. The 
indicative spot price and IIV per Gold Share are provided on an 
essentially real-time basis (updated at least every 15 seconds) and are 
available during ArcaEx's early, core and late trading sessions.\8\
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    \7\ The Trust web site's gold spot price will be provided by The 
Bullion Desk (http://www.thebulliondesk.com). The Bullion Desk is 
not affiliated with the Trust, its sponsor, its custodian or the 
Exchange. See Securities Exchange Act Release No. 50603 (October 28, 
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (``NYSE 
Approval Order'')
    \8\ Additionally, each day, the Sponsor updates the IIV per Gold 
Share shortly after calculation of the net asset value per Gold 
Share. Telephone conversation between Stuart Thomas, Managing 
Director, World Gold Council, and David Strandberg, Archipelago 
Exchange, and Florence Harmon, Senior Special Counsel, Division of 
Market Regulation (``Division''), Commission dated January 12, 2006. 
See also NYSE Approval Order at p. 14 (the Trust's Web site will 
disseminate these values subject to an average delay of 5 to 10 
seconds).
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    In support of this proposed rule change, the Exchange states that 
the representations in the PCX Approval Order regarding trading in Gold 
Shares are applicable to all trading sessions, in particular:
    1. The Exchange has appropriate rules to facilitate transactions in 
Gold Shares during all trading sessions.
    2. The Exchange's surveillance procedures are adequate to properly 
monitor trading of the Gold Shares in all trading sessions.
    3. The Exchange has distributed an Information Circular to Equity 
Trading Permit (``ETP'') Holders prior to the commencement of trading 
of the Gold Shares on the Exchange that explains the terms, 
characteristics, and risks of trading such shares.
    4. The Exchange will require ETP Holders with a customer who 
purchases newly issued Gold Shares in any trading session on ArcaEx to 
provide that customer with a product prospectus and has noted this 
prospectus delivery requirement in the Information Circular.
    5. Because ArcaEx is trading Gold Shares pursuant to UTP, the 
Exchange will cease trading in the Gold Shares during all ArcaEx 
trading sessions if: (a) The primary market stops trading the Gold 
Shares because of a regulatory halt similar to a halt based on PCXE 
Rule 7.12 and/or a halt because dissemination of the IIV and/or the 
unaffiliated gold value has ceased or the Exchange no longer provides a 
hyperlink to the Trust's Web site; or (b) the primary market delists 
the Gold

[[Page 8329]]

Shares. Additionally, the Exchange may cease trading the Gold Shares if 
such other event shall occur or condition exists which in the opinion 
of the Exchange makes further dealings on the Exchange inadvisable.
    6. Because ArcaEx is trading pursuant to UTP the Gold Shares during 
its early and late trading sessions, when the primary market is closed, 
the Exchange will monitor the unaffiliated value of gold and IIV per 
Gold Share and ensure that trading of the Gold Shares on ArcaEx will 
cease during the early and late trading sessions, if the unaffiliated 
value of gold and IIV per Gold Share (used by the primary listing 
exchange) is no longer calculated or available during the early and 
late trading sessions, or the Exchange stops providing a hyperlink on 
the Exchange's Web site to such unaffiliated gold value or IIV per Gold 
Share.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \9\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it 
is designed to facilitate transactions in securities, 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    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 proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative prior to 30 days after the date of filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interests, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \11\ 
and Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6). As required by Rule 19b-
4(f)(6)(iii) under the Act, the Exchange also provided the 
Commission with written notice of intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five days (or such time as designated by the 
Commission) prior to doing so.
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    PCX requests that the Commission waive the 30-day pre-operative 
period specified in Rule 19b-4(f)(6)(iii).\13\ The Commission hereby 
grants that request and finds that waiving the 30-day pre-operative 
period is consistent with the protection of investors and public 
interest because PCX has addressed regulatory issues herein by ensuring 
that the Gold Shares will trade in all ArcaEx trading sessions with the 
relevant IIV and indicative spot price of gold available. The waiver 
will permit the Exchange to implement the proposed rule change without 
delay and thereby providing ETP Holders and the public greater 
liquidity and opportunities to trade, helping to reduce trading costs 
and promote competition among marketplaces.\14\ For these reasons, the 
Commission designates the proposal to be effective and operative upon 
filing with the Commission.\15\
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    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \15\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors or otherwise in 
furtherance of the purposes of the Act.\16\
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    \16\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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 [email protected]. Please include 
File Number SR-PCX-2006-02 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-PCX-2006-02. The 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. 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-PCX-2006-02 and should be submitted on or before March 
9, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-2198 Filed 2-15-06; 8:45 am]
BILLING CODE 8010-01-P