[Federal Register Volume 74, Number 164 (Wednesday, August 26, 2009)]
[Notices]
[Pages 43182-43184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20539]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60535; File No. SR-NYSEAmex-2009-55]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change 
Amending Section 107(H) of the NYSE Amex Company Guide

August 19, 2009.
    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 10, 2009, NYSE Amex LLC (``NYSE Amex'' or the ``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 Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons and is approving the proposed rule change on an accelerated 
basis.
---------------------------------------------------------------------------

    \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 Section 107(H) of the NYSE Amex 
Company Guide in order to add the CBOE Volatility Index[supreg] 
(VIX[supreg]) Futures (``VIX Futures'') to the definition of Futures 
Reference Asset. The text of the proposed rule change is attached as 
Exhibit 5 to the 19b-4 form. A copy of this filing is available on the 
Exchange's Web site at http://www.nyse.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 self-regulatory organization 
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 those 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 parts of such statements.

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

1. Purpose
    Rule 19b-4(e) \3\ under the Securities Exchange Act of 1934 
(``Act'') \4\ 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 section (c)(1) of 
Rule 19b-4,\5\ if the Commission has approved, pursuant to Section 
19(b) of the Act,\6\ the SRO's trading rules, procedures, and listing 
standards for the product class that would include the new derivative 
securities product,\7\ and the SRO has a surveillance program for the 
product class.\8\ This proposal is substantially similar to the 
previously approved NYSE Arca Equities Rule 5.2(j)(6)(v).\9\
---------------------------------------------------------------------------

    \3\ 17 CFR 240.19b-4(e).
    \4\ 17 U.S.C. 78a.
    \5\ 17 CFR 240.19b-4(c)(1).
    \6\ 15 U.S.C. 78s(b).
    \7\ E-mail from Timothy Malinowski, Director, NYSE Euronext, to 
Edward Cho, Special Counsel, Division of Trading and Markets, 
Commission, dated August 11, 2009 (``Exchange Confirmation'').
    \8\ See Securities Exchange Act Release No. 40761 (December 8, 
1998), 63 FR 70952 (December 22, 1998) [sic].
    \9\ See Securities Exchange Act Release No. 34-58968 (November 
17, 2008), 73 FR 64647 [sic] (SR-NYSEArca-2008-111).
---------------------------------------------------------------------------

    The Commission has approved the listing pursuant to Section 107(H) 
of the Amex Company Guide, including listing pursuant to Rule 19b-4(e), 
of Futures-Linked Securities.\10\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 34-57739 (April 30, 
2008), 73 FR 25061 [sic] (SR-Amex-2008-17).
---------------------------------------------------------------------------

    The Exchange is proposing to amend its generic listing standards 
under Section 107(H) of the NYSE Amex Company Guide \11\ for Futures-
Linked Securities pursuant to which it will be able to trade securities 
linked to VIX Futures without Commission approval of each individual 
product pursuant to

[[Page 43183]]

Section 19(b)(2) of the Act.\12\ Specifically, the Exchange proposes to 
amend Section 107(H) of the NYSE Amex Company Guide to add the VIX 
Futures as an underlying financial instrument of Futures-Linked 
Securities and include VIX Futures within the definition of a Futures 
Reference Asset.\13\ The Exchange represents that any securities it 
lists and/or trades pursuant to Section 107(H) of the NYSE Amex Company 
Guide will satisfy the standards set forth therein, and all applicable 
Exchange and federal securities rules. The Exchange states that within 
five business days after commencement of trading of a Futures-Linked 
Security in reliance on Section 107(H) of the NYSE Amex Company Guide, 
the Exchange will file a Form 19b-4(e).\14\
---------------------------------------------------------------------------

    \11\ See Exchange Confirmation, supra note 7.
    \12\ 15 U.S.C. 78s(b)(2).
    \13\ See Exchange Confirmation, supra note 7.
    \14\ 17 CFR 240.19b-4(e)(2)(ii); 17 CFR 249.820.
---------------------------------------------------------------------------

    The Commission has previously approved the listing and trading of 
options on the VIX.\15\
---------------------------------------------------------------------------

    \15\ See Securities Exchange Release No. 48807 (November 19, 
2003), 68 FR 66516 (November 26, 2003) (SR-CBOE-2003-40).
---------------------------------------------------------------------------

a. The VIX
    The information in this filing relating to the VIX was taken from 
the Web site of the Chicago Board Options Exchange (the ``CBOE'').
    The VIX was originally developed by the CBOE in 1993 and was 
calculated using S&P 100[supreg] Index options. The current methodology 
for the VIX was introduced by the CBOE in September 2003 and it is now 
an index that uses the quotes of certain S&P 500[supreg] Index 
(``SPX'') option series to derive a measure of the volatility of the 
U.S. equity market. The VIX measures market expectations of near term 
volatility conveyed by the prices of options on the SPX. It provides 
investors with up-to-the-minute market estimates of expected stock 
market volatility over the next 30 calendar days by extracting implied 
volatilities from real-time index option bid/ask quotes.
b. VIX Futures
    Information regarding VIX Futures can be found on the Web site of 
the CBOE Futures Exchange (the ``CFE'').
    The CFE began listing and trading VIX Futures since March 26, 2004 
under the ticker symbol VX. VIX Futures trade between the hours of 8:30 
a.m.-3:15 p.m. Central Time (Chicago Time). The CFE is a member of the 
Intermarket Surveillance Group (``ISG'').\16\
---------------------------------------------------------------------------

    \16\ For a list of the current members and affiliate members of 
ISG, see http://www.isgportal.org.
---------------------------------------------------------------------------

    The Exchange believes that the proposed criteria to add VIX Futures 
as an underlying Futures Reference asset will facilitate the listing 
and trading of additional Futures-Linked Security that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \17\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \18\ in particular in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanisms of 
a free and open market and a national market system, and, in general, 
to protect investors and the public interest. The Exchange believes 
that the proposed rule change will facilitate the listing and trading 
of additional Futures-Linked Security that will enhance competition 
among market participants, to the benefit of investors and the 
marketplace.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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-NYSEAmex-2009-55 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2009-55. 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 publicly available. All 
submissions should refer to File Number SR-NYSEAmex-2009-55 and should 
be submitted on or before September 16, 2009.

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.\19\ In particular, the Commission believes that the proposal 
is consistent with Section 6(b)(5) of the Act \20\ 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,

[[Page 43184]]

settling, processing information with respect to, and facilitating 
transaction in securities, and, in general to protect investors and the 
public interest. The Commission notes that it has previously approved a 
proposal submitted by another exchange to similarly include VIX Futures 
as a Futures Reference Asset underlying Futures-Linked Securities.\21\
---------------------------------------------------------------------------

    \19\ 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).
    \20\ 15 U.S.C. 78f(b)(5).
    \21\ See supra note 9. See also NYSE Arca Equities Rule 
5.2(j)(6)(v).
---------------------------------------------------------------------------

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\22\ for approving the proposed rule change prior to the 30th 
day after the date of publication of notice in the Federal Register. 
The Commission believes that the Exchange's proposal to add VIX Futures 
in the definition of Futures Reference Asset under Section 107(H) of 
the NYSE Amex Company Guide does not present any novel or significant 
regulatory issues. The Commission believes that accelerating approval 
of this proposal should benefit investors by creating, without undue 
delay, additional competition in the market for Futures-Linked 
Securities based on VIX Futures.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\23\ that the proposed rule change (SR-NYSEAmex-2009-55) be, and it 
hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(2).

    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. E9-20539 Filed 8-25-09; 8:45 am]
BILLING CODE 8010-01-P