[Federal Register Volume 72, Number 195 (Wednesday, October 10, 2007)]
[Notices]
[Pages 57625-57629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19909]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56601; File No. SR-NYSEArca-2007-79]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of a Proposed Rule Change as 
Modified by Amendment No. 1 Thereto To Trade Shares of Eight Funds of 
the ProShares Trust Based on International Indexes Pursuant to Unlisted 
Trading Privileges

October 2, 2007.
    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 July 31, 2007, NYSE Arca, Inc. (``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. On September 28, 
2007, the Exchange submitted Amendment No. 1 to the proposed rule 
change. This order provides notice of the proposed rule change as 
modified by Amendment No. 1 and approves the proposed rule change as 
amended on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through its wholly-owned subsidiary NYSE Arca 
Equities, proposes to trade pursuant to unlisted trading privileges 
(``UTP'') shares (``Shares'') of eight funds (``Funds'') of the 
ProShares Trust (``Trust'') based on four international equity indexes. 
The text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://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 III 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 trade the Shares of the Funds pursuant to 
UTP under NYSE Arca Equities Rule 5.2(j)(3).\3\ The Commission has 
approved the original listing and trading of the Shares on the American 
Stock Exchange LLC (``Amex'').\4\
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    \3\ In October 1999, the Commission approved NYSE Arca Equities 
Rule 5.2(j)(3), which sets forth the rules related to listing and 
trading criteria for Investment Company Units (``ICUs''). See 
Securities Exchange Act Release No. 41983 (October 6, 1999), 64 FR 
56008 (October 15, 1999) (SR-PCX-98-29). In July 2001, the 
Commission also approved the Exchange's generic listing standards 
for listing and trading, or the trading pursuant to UTP, of ICUs 
under NYSE Arca Equities Rule 5.2(j)(3). See Securities Exchange Act 
Release No. 44551 (July 12, 2001), 66 FR 37716 (July 19, 2001) (SR-
PCX-2001-14). The definition of an ICU is set forth in NYSE Arca 
Equities Rule 5.1(b)(15), which provides that an ICU is a security 
representing an interest in a registered investment company that 
could be organized as a unit investment trust, an open-end 
management investment company, or a similar entity.
    \4\ See Securities Exchange Act Release No. 56592 (October 1, 
2007) (SR-Amex-2007-60) (``Amex Order''). See also Securities 
Exchange Act Release No. 56223 (August 8, 2007), 72 FR 45837 (August 
15, 2007) (SR-Amex-2007-60) (``Amex Notice'').
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    The Funds are designated as Short Funds (``Short Funds'') and 
UltraShort Funds (``UltraShort Funds''), as described more fully 
below.\5\ Each of the

[[Page 57626]]

Funds will have a distinct investment objective. Each Fund will 
attempt, on a daily basis, to achieve its investment objective by 
corresponding to a specified multiple of the inverse performance of a 
particular equity securities index (each, an ``Underlying Index'' or 
``Index'') as briefly described below.
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    \5\ The Commission has previously approved trading certain Ultra 
Funds, Short Funds, and UltraShort Funds of the ProShares Trust on 
the Exchange pursuant to UTP under NYSE Arca Equities Rule 
5.2(j)(3). See Securities Exchange Act Release No. 34-55125 (January 
18, 2007), 72 FR 3462 (January 25, 2007) (SR-NYSEArca-2006-87). See 
also Securities Exchange Act Release No. 54026 (June 21, 2006), 71 
FR 36850 (June 28, 2006) (SR-PCX-2005-115).
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    Short Funds. The Short Funds seek daily investment results, before 
fees and expenses, that correspond to the inverse or opposite of the 
daily performance (-100%) of the Underlying Indexes. If a Short Fund is 
successful in meeting its objective, the net asset value (``NAV'') \6\ 
of the corresponding Shares should increase approximately as much (on a 
percentage basis) as the respective Underlying Index loses when the 
prices of the securities in the Index decline on a given day, or should 
decrease approximately as much as the respective Index gains when 
prices in the Index rise on a given day. The Short Funds include: (1) 
Short MSCI Emerging Markets ProShares, (2) Short MSCI Japan ProShares, 
(3) Short MSCI EAFE ProShares, and (4) Short FTSE/Xinhua China 25 
ProShares.
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    \6\ NAV per Share of each Fund is computed by dividing the value 
of the net assets of such Fund (i.e., the value of its total assets 
less total liabilities) by its total number of Shares outstanding. 
Expenses and fees are accrued daily and taken into account for 
purposes of determining NAV.
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    UltraShort Funds. UltraShort Funds seek daily investment results, 
before fees and expenses, that correspond to twice the inverse or 
opposite of the daily performance (-200%) of the Underlying Indexes. If 
an UltraShort Fund is successful in meeting its objective, the NAV of 
the corresponding Shares should increase approximately twice as much 
(on a percentage basis) as the respective Underlying Index loses when 
the prices of the securities in the Index decline on a given day, or 
should decrease approximately twice as much as the respective 
Underlying Index gains when such prices rise on a given day. The 
UltraShort Funds include: (1) UltraShort MSCI Emerging Markets 
ProShares, (2) UltraShort MSCI Japan ProShares, (3) UltraShort MSCI 
EAFE ProShares, and (4) UltraShort FTSE/Xinhua China 25 ProShares.
    No Fund will invest directly in the component securities of the 
relevant Underlying Index; instead, each Fund will create short 
exposure to the corresponding Index. Each Fund will establish positions 
in Financial Instruments (as defined below) that provide, on a daily 
basis, the inverse or opposite of, or twice the inverse or opposite of, 
the performance of the relevant Underlying Index. Normally 100% of the 
value of the portfolios of each Fund will be devoted to such Financial 
Instruments and certain money market instruments.
    The Financial Instruments to be held by any of the Funds may 
include stock index futures contracts, options on futures contracts, 
options on securities and indices, equity caps, collars and floors, as 
well as swap agreements, forward contracts, repurchase agreements, and 
reverse repurchase agreements (``Financial Instruments''). Money market 
instruments include certain U.S. government securities and repurchase 
agreements.
Availability of Information About the Shares and the Underlying Indexes
    The Trust's Web site, which is and will be publicly accessible at 
no charge, will contain the following information for each Fund's 
Shares: (1) The prior business day's closing NAV, the reported closing 
price, and a calculation of the premium or discount of such price in 
relation to the closing NAV; (2) data for a period covering at least 
the four previous calendar quarters (or the life of a Fund, if shorter) 
indicating how frequently each Fund's Shares traded at a premium or 
discount to NAV based on the daily closing price and the closing NAV, 
and the magnitude of such premiums and discounts; (3) its prospectus 
and/or product description; and (4) other quantitative information such 
as daily trading volume. The prospectus and/or product description for 
each Fund will inform investors that the Trust's Web site has 
information about the premiums and discounts at which the Fund's Shares 
have traded.
    According to the Amex Proposal, Amex will disseminate for each Fund 
on a daily basis by means of Consolidated Tape Association (``CTA'') 
and CQ High Speed Lines information with respect to an Indicative 
Intra-Day Value (``IIV''), recent NAV, shares outstanding, estimated 
cash amount, and total cash amount per Creation Unit. Amex will make 
available on its Web site daily trading volume, closing price, the NAV, 
and the final dividend amounts to be paid for each Fund. Amex 
represented in the Amex Proposal that it will obtain a representation 
from the Trust (for each Fund), prior to listing, that the NAV per 
share for each Fund will be calculated daily and made available to all 
market participants at the same time.\7\
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    \7\ If Amex halts trading in the Shares of the Funds because the 
NAV is not being disseminated to all market participants at the same 
time, then the Exchange would do so as well.
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    Each Fund's total portfolio composition will be disclosed on the 
Trust's Web site (http://www.proshares.com) or another relevant Web 
site as determined by the Trust and/or Amex. According to the Amex 
Proposal, the Web site disclosure of portfolio holdings will be made 
daily and will include, as applicable, the specific types of Financial 
Instruments and characteristics of such instruments, cash equivalents, 
and the amount of cash held in the portfolio of each Fund. This public 
disclosure of the portfolio composition of each Fund will coincide with 
the disclosure by ProShare Advisors LLC (``Advisor'') of the ``IIV 
File'' and the ``PCF.'' \8\ Therefore, the portfolio information 
(including accrued expenses and dividends) to be provided on the public 
Web site will be the same as the information in the IIV File and PCF 
(when applicable) provided to authorized participants. The format of 
the public Web site disclosure and the IIV File and PCF (when 
applicable) will differ because the public Web site will list all 
portfolio holdings while the IIV and PCF (when applicable) will 
similarly provide the portfolio holdings but in a format appropriate 
for authorized participants, i.e., the exact components of a Creation 
Unit.\9\ Each investor will have access to the current portfolio 
composition of each Fund through the Trust's Web site, at http://www.proshares.com, and/or at the Amex's Web site at http://www.amex.com.
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    \8\ According to the Amex Proposal, the Trust will create a 
portfolio composition file (``PCF'') for each Fund, which it will 
transmit to the National Securities Clearing Corporation (``NSCC'') 
before the open of business the next business day. The information 
in the PCF will be available to all participants in the NSCC system. 
Because the NSCC's system for the receipt and dissemination to its 
participants of the PCF is not currently capable of processing 
information with respect to Financial Instruments, the Advisor has 
developed an ``IIV File,'' which it will use to disclose the Funds' 
holdings of Financial Instruments. The IIV File will contain, for 
each Fund, information sufficient by itself or in connection with 
the PCF and other available information for market participants to 
calculate a Fund's IIV and effectively arbitrage the Fund. The Trust 
or the Advisor will post the IIV File to a password-protected Web 
site before the opening of business on each business day, and all 
authorized participants and Amex will have access to a password and 
the Web site containing the IIV File.
    \9\ The composition will be used to calculate the NAV later that 
day.
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    Beneficial owners of Shares (``Beneficial Owners'') will receive 
all of the statements, notices, and reports required under the 1940 Act 
and other applicable laws. They will receive, for example, annual and 
semi-annual Fund reports, written statements

[[Page 57627]]

accompanying dividend payments, proxy statements, annual notifications 
detailing the tax status of Fund distributions, and Form 1099-DIVs. 
Some of these documents will be provided to Beneficial Owners by their 
brokers, while others will be provided by the Fund through the brokers.
    The daily closing index value and the percentage change in the 
daily closing index value for each Underlying Index will be publicly 
available on various Web sites, e.g., http://www.bloomberg.com. Data 
regarding each Underlying Index are also available from the respective 
index provider to subscribers. Several independent data vendors also 
package and disseminate index data in various value-added formats 
(including vendors displaying both securities and index levels and 
vendors displaying index levels only). The value of each Underlying 
Index would be updated intra-day as its individual component securities 
change in price. These intra-day values of each Underlying Index will 
be disseminated at least every 60 seconds from 9:30 a.m. to 4:15 p.m. 
Eastern Time by Amex or another organization authorized by the relevant 
Underlying Index provider.\10\
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    \10\ During certain periods, the relevant Underlying Index value 
may be not updated or static.
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    According to the Amex Proposal, in order to provide updated 
information relating to each Fund for use by investors, professionals, 
and persons wishing to create or redeem Shares, Amex will disseminate 
through the facilities of the CTA: (1) Continuously from 9:30 a.m. to 
4:15 p.m. Eastern Time, the market value of a Share; and (2) at least 
every 15 seconds from 9:30 a.m. to 4:15 p.m. Eastern Time, the IIV as 
calculated by Amex (the ``IIV Calculator''). Comparing these two 
figures helps an investor to determine whether, and to what extent, the 
Shares may be selling at a premium or a discount to NAV.
    The IIV Calculator will calculate an IIV for each Fund in the 
manner discussed in the Amex Proposal. The IIV is designed to provide 
investors with a reference value that can be used in connection with 
other related market information. The IIV does not necessarily reflect 
the precise composition of the current portfolio held by each Fund at a 
particular point in time. Therefore, the IIV on a per-Share basis 
disseminated from 9:30 a.m. to 4:15 p.m. Eastern Time should not be 
viewed as a real-time update of the NAV of a particular Fund, which is 
calculated only once a day. While the IIV that will be disseminated by 
Amex is expected to be close to the most recently calculated Fund NAV 
on a per-Share basis, it is possible that the value of the portfolio 
held by a Fund may diverge from the IIV during any trading day. In such 
case, the IIV will not precisely reflect the value of the Fund 
portfolio.
Trading Halts
    The Exchange represents that it will cease trading the Shares of 
the Fund if the listing market stops trading the Shares because of a 
regulatory halt similar to a halt based on NYSE Arca Equities Rule 
7.12. UTP trading in the Shares is also governed by the trading halts 
provisions of NYSE Arca Equities Rule 7.34 relating to temporary 
interruptions in the calculation or wide dissemination of the IIV or 
the value of the underlying index.
    The Exchange may consider all relevant factors in exercising its 
discretion to halt or suspend trading in the Shares of a Fund. Trading 
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 the 
securities comprising an Underlying Index and/or the Financial 
Instruments of a Fund, 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 could be halted 
pursuant to the Exchange's ``circuit breaker'' rule \11\ or by the halt 
or suspension of trading of the underlying securities.
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    \11\ See NYSE Arca Equities Rule 7.12.
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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 NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern Time in 
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late 
Trading Sessions).\12\ The Exchange has appropriate rules to facilitate 
transactions in the Shares during all trading sessions.
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    \12\ Because NSCC does not disseminate the new basket amount to 
market participants until approximately 6 p.m. to 7 p.m. Eastern 
Time, an updated IIV is not possible to calculate during the 
Exchange's late trading session (from 4:15 p.m. to 8 p.m. Eastern 
Time). Official index sponsors for the Underlying Indexes currently 
do not calculate updated index values during the Exchange's late 
trading session; however, if the index sponsors do so in the future, 
the Exchange would not trade this product unless such official index 
value is widely disseminated.
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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 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.
    The Exchange may obtain information via the Intermarket 
Surveillance Group (``ISG'') from other exchanges who are members or 
affiliates of the ISG.\13\
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    \13\ A list of the current members and affiliate members of ISG 
is available at http://www.isgportal.com.
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    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders 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 Creation 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; \14\ (3) the risks involved in 
trading the Shares during the Opening and Late Trading Sessions when an 
updated IIV will not be calculated or publicly disseminated; (4) how 
information regarding the IIV is disseminated; (5) the requirement that

[[Page 57628]]

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.
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    \14\ NYSE Arca Equities Rule 9.2(a) provides that an ETP Holder, 
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 Holder 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. 54045 (June 26, 2006), 71 FR 37971 (July 3, 2006) (SR-PCX-2005-
115).
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    In addition, the Bulletin will reference that the Fund is subject 
to various fees and expenses described in the registration statement 
for the Fund.
    The Bulletin will also discuss any exemptive, no-action, and 
interpretive relief granted by the Commission from Section 11(d)(1) of 
the Act \15\ and certain rules under the Act, including Rule 10b-10, 
Rule 14e-5, Rule 10b-17, Rule 11d1-2, Rules 15c1-5 and 15c1-6, and 
Rules 101 and 102 of Regulation M under the Act.
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    \15\ 15 U.S.C. 78k(d)(1).
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    The Bulletin will also disclose that the NAV for the Shares will be 
calculated after 4 p.m. Eastern time each trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\16\ in general, and with 
Section 6(b)(5) of the Act,\17\ 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 a free 
and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \16\ 15 U.S.C. 78f.
    \17\ 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 would 
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 were neither solicited nor received.

III. 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-NYSEArca-2007-79 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-2007-79. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (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-2007-79 and should 
be submitted on or before October 31, 2007.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful consideration, 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.\18\ Specifically, the Commission finds that the proposed rule 
change is consistent with Section 6(b)(5) of the Act,\19\ which 
requires, among other things, that the rules of a national securities 
exchange be 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. The Commission believes that this proposal should 
benefit investors by increasing competition among markets that trade 
the Shares.
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    \18\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \19\ 15 U.S.C. 78f(b)(5).
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    In addition, the Commission finds that the proposal is consistent 
with Section 12(f) of the Act,\20\ which permits an exchange to trade, 
pursuant to UTP, a security that is listed and registered on another 
exchange.\21\ The Commission notes that it previously approved the 
listing and trading of the Shares on Amex.\22\ The Commission also 
finds that the proposal is consistent with Rule 12f-5 under the 
Act,\23\3 which provides that an exchange shall not extend UTP to a 
security unless the exchange has in effect a rule or rules providing 
for transactions in the class or type of security to which the exchange 
extends UTP. The Exchange has represented that it meets this 
requirement because it 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.
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    \20\ 15 U.S.C. 78l(f).
    \21\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally 
prohibits a broker-dealer from trading a security on a national 
securities exchange unless the security is registered on that 
exchange pursuant to Section 12 of the Act. Section 12(f) of the Act 
excludes from this restriction trading in any security to which an 
exchange ``extends UTP.'' When an exchange extends UTP to a 
security, it allows its members to trade the security as if it were 
listed and registered on the exchange even though it is not so 
listed and registered.
    \22\ See supra note 4.
    \23\ 17 CFR 240.12f-5.
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    The Commission further believes that the proposal is consistent 
with Section 11A(a)(1)(C)(iii) of the Act,\24\ which sets forth 
Congress' finding that it is in the public interest and appropriate for 
the protection of investors and the maintenance of fair and orderly 
markets to assure the availability to brokers, dealers, and investors 
of information with respect to quotations for and transactions in 
securities. Quotations for and last-sale information regarding the 
Shares are disseminated through the facilities of the CTA and the 
Consolidated Quotation System. In addition, from 9:30 a.m. to 4:15 p.m. 
Eastern Time, Amex will disseminate via the facilities of the CTA the 
IIV at

[[Page 57629]]

least every 15 seconds, the market value of a Share for each Fund, the 
most recent NAV for each Fund, the number of Shares outstanding for 
each Fund, and the estimated cash amount and total cash amount per 
Creation Unit. Amex will also make available on its Web site daily 
trading volume, the closing prices, the NAV, and the final dividend 
amounts to be paid for each Fund. Furthermore, the value of each 
Underlying Index will be updated intra-day as its individual component 
securities change in price and disseminated at least every 60 seconds 
from 9:30 a.m. to 4:15 p.m. Eastern Time by Amex or another 
organization authorized by the relevant Underlying Index provider. The 
Trust's Web site will contain a variety of other quantitative 
information for the Shares of each Fund. Finally, each Fund's total 
portfolio composition will be disclosed on the Web site of the Trust or 
another relevant Web site as determined by the Trust and/or Amex.
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    \24\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    Furthermore, the Commission believes that the proposal is 
reasonably designed to preclude trading of the Shares when transparency 
is impaired. Trading in the Shares will be subject to NYSE Arca 
Equities Rule 7.34, which provides that, if the listing market halts 
trading when the IIV is not being calculated or disseminated, the 
Exchange also would halt trading. The Exchange also may halt trading in 
the Shares of a Fund when trading is not occurring in the securities 
comprising an Underlying Index and/or the Financial Instruments of a 
Fund.
    The Commission notes that, if the Shares should be delisted by the 
listing exchange, the Exchange would no longer have authority to trade 
the Shares pursuant to this order.
    In support of this proposal, the Exchange has made the following 
representations:
    1. The Exchange's surveillance procedures are adequate to properly 
monitor Exchange trading of the Shares in all trading sessions and to 
deter and detect violations of Exchange rules.
    2. Prior to the commencement of trading, the Exchange would inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. In 
particular, the Information Bulletin will disclose that the procedures 
for purchases and redemptions of Shares in Creation Units are described 
in each Fund's prospectus, and that Shares are not individually 
redeemable, but are redeemable only in Creation Unit aggregations or 
multiples thereof. The Information Bulletin would also discuss the 
risks involved in trading the Shares during the Opening and Late 
Trading Sessions when an updated IIV will not be calculated or publicly 
disseminated.
    3. Prior to the commencement of trading, the Exchange would inform 
its ETP Holders in an Information Bulletin of the requirement that ETP 
Holders deliver a prospectus to investors purchasing newly issued 
Shares prior to or concurrently with the confirmation of a transaction.
    This approval order is conditioned on the Exchange's adherence to 
these representations.
    The Commission finds good cause for approving this proposal before 
the thirtieth day after the publication of notice thereof in the 
Federal Register. As noted previously, the Commission previously found 
that the listing and trading of the Shares on Amex is consistent with 
the Act. The Commission presently is not aware of any regulatory issue 
that should cause it to revisit that finding or would preclude the 
trading of the Shares on the Exchange pursuant to UTP. Therefore, 
accelerating approval of this proposal should benefit investors by 
creating, without undue delay, additional competition in the market for 
the Shares.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\25\ that the proposed rule change (SR-NYSEArca-2007-79), as 
amended, be and it hereby is, approved on an accelerated basis.
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    \25\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-19909 Filed 10-9-07; 8:45 am]
BILLING CODE 8011-01-P