[Federal Register Volume 75, Number 87 (Thursday, May 6, 2010)]
[Notices]
[Pages 25005-25007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10592]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61990; File No. SR-NYSEArca-2010-25]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Amending the Listing and Trading of ETFS
Palladium Trust and ETFS Platinum Trust
April 27, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 8, 2010, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
[[Page 25006]]
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 certain rules in order to enable the
listing and trading on the Exchange of options on the ETFS Palladium
Trust and the ETFS Platinum Trust. The text of the proposed rule change
is available on the Commission's Web Site at http://www.sec.gov. 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 IV 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Recently, the U.S. Securities and Exchange Commission (``SEC'' or
``Commission'') authorized the Exchange to list and trade options on
the SPDR Gold Trust (``GLD'') \4\ and on the iShares COMEX Gold Trust
(``IAU'') and the iShares Silver Trust (``SLV''),\5\ the ETFS Silver
Trust (``SIVR'') and the ETFS Gold Trust (``SGOL'').\6\ Now, the
Exchange proposes to list and trade options on the ETFS Palladium Trust
(``PALL'') and the ETFS Platinum Trust (``PPLT'').
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 57894 (May 30,
2008), 73 FR 32061 (June 5, 2008) (order approving SR-NYSEArca-2008-
52).
\5\ See Securities Exchange Act Release No. 59055 (December 4,
2008), 73 FR 238 [sic] (December 10, 2008) (order approving SR-
NYSEArca-2008-66).
\6\ See Securities Exchange Act Release No. 61483 (February 3,
2010), 75 FR 6753 (February 10, 2010).
---------------------------------------------------------------------------
Currently, Rule 5.3 deems appropriate for options trading Exchange-
Traded Fund Shares (``ETFs'' or ``Fund Shares'' or ``Units'') that are
traded on a national securities exchange and are defined as an ``NMS
stock'' in Rule 600(b)(47) of Regulation NMS and that represent (i)
interests in registered investment companies (or series thereof)
organized as open-end management investment companies, unit investment
trusts or similar entities that hold portfolios of securities and/or
financial instruments including, but not limited to, options on
securities and indexes, equity caps, collars and floors, swap
agreements, forward contracts, repurchase agreements and reverse
purchase agreements (the ``Financial Instruments''), and money market
instruments, including, but not limited to, U.S. government securities
and repurchase agreements (the ``Money Market Instruments'') comprising
or otherwise based on or representing investments in indexes or
portfolios of securities and/or Financial Instruments and Money Market
Instruments (or that hold securities in one or more other registered
investment companies that themselves hold such portfolios of securities
and/or Financial Instruments and Money Marker Instruments); or (ii)
interests in a trust or similar entity that holds a specified non-U.S.
currency deposited with the trust or similar entity when aggregated in
some specified minimum number may be surrendered to the trust by the
beneficial owner to receive the specified non-U.S. currency, and pays
the beneficial owner interest and other distributions on deposited non-
U.S. currency, if any, declared and paid by the trust; or (iii)
commodity pool interests principally engaged, directly or indirectly,
in holding and/or managing portfolios or baskets of securities,
commodity futures contracts, options on commodity futures contracts,
swaps, forward contracts and/or options on physical commodities and/or
non-U.S. currency (``Commodity Pool Units''), or (iv) represent
interests in the SPDR Gold Trust, are eligible as underlying securities
for options traded on the Exchange or (iv) represent interests in the
SPDR Gold Trust, or (v) represent interests in the iShares COMEX Gold
Trust, or (vi) represent interests in the iShares Silver Trust, or,
(vii) represents an interest in a registered investment company
(``Investment Company'') organized as an open-end management investment
company or similar entity, that invests in a portfolio of securities
selected by the Investment Company's investment adviser consistent with
the Investment Company's investment objectives and policies, which is
issued in a specified aggregate minimum number in return for a deposit
of a specified portfolio of securities and/or a cash amount with a
value equal to the next determined net asset value (``NAV''), and when
aggregated in the same specified minimum number, may be redeemed at a
holder's request, which holder will be paid a specified portfolio of
securities and/or cash with a value equal to the next determined NAV
(``Managed Fund Share'') or, (viii) represents interest in the ETFS
Silver Trust or the ETFS Gold Trust.\7\ This rule change proposes to
expand the types of ETFs that may be approved for options trading on
the Exchange to include the ETFS Palladium Trust and the ETFS Platinum
Trust.
---------------------------------------------------------------------------
\7\ See Rule 5.3(g).
---------------------------------------------------------------------------
Apart from allowing the ETFS Palladium Trust and ETFS Platinum
Trust to be underlyings for options traded on the Exchange as described
above, the listing standards for ETFs will remain unchanged from those
that apply under current Exchange rules. ETFs on which options may be
listed and traded must still be listed and traded on a national
securities exchange and must satisfy the other listing standards set
forth in Rule 5.3(g).
Specifically, in addition to satisfying the aforementioned listing
requirements, Units must meet either (1) the criteria and guidelines
under Rule 5.3(a) and (b) or (2) they must be available for creation or
redemption each business day from or through the issuer in cash or in
kind at a price related to net asset value, and the issuer must be
obligated to issue Units in a specified aggregate number even if some
or all of the investment assets required to be deposited have not been
received by the issuer, subject to the condition that the person
obligated to deposit the investments has undertaken to deliver the
investment assets as soon as possible and such undertaking is secured
by the delivery and maintenance of collateral consisting of cash or
cash equivalents satisfactory to the issuer, as provided in the
respective prospectus.
The Exchange states that the current continued listing standards
for options on ETFs will apply to options on the ETFS Palladium Trust
and ETFS Platinum Trust. Specifically, under Rule 5.4(k), options on
Units may be subject to the suspension of opening transactions as
follows: (1) Following the initial twelve-month period beginning upon
the commencement of trading of the Units, there are fewer than 50
record and/or beneficial holders of the Units for 30 or more
consecutive
[[Page 25007]]
trading days; (2) the value of the underlying silver or underlying gold
[sic] is no longer calculated or available; or (3) such other event
occurs or condition exists that in the opinion of the Exchange makes
further dealing on the Exchange inadvisable.
Additionally, the ETFS Palladium Trust and ETFS Platinum Trust
shall not be deemed to meet the requirements for continued approval,
and the Exchange shall not open for trading any additional series of
option contracts of the class covering the ETFS Palladium Trust or the
ETFS Platinum Trust, respectively, if the ETFS Palladium Trust or the
ETFS Platinum Trust ceases to be an ``NMS stock'' as provided for in
Rule 5.4(b)(5) or the ETFS Palladium Trust or the ETFS Platinum Trust
is halted from trading on its primary market.
The addition of the ETFS Palladium Trust and ETFS Platinum Trust to
Rule 5.3(g) will not have any effect on the rules pertaining to
position and exercise limits \8\ or margin.\9\
---------------------------------------------------------------------------
\8\ See Rule 6.8 regarding positions limits, and Rule 6.9
regarding exercise limits.
\9\ See Rules 4.15 and 4.16 regarding margins.
---------------------------------------------------------------------------
The Exchange represents that its surveillance procedures applicable
to trading in options on the ETFS Palladium Trust and ETFS Platinum
Trust will be similar to those applicable to all other options on other
ETFs currently traded on the Exchange. Also, the Exchange may obtain
information from the New York Mercantile Exchange, Inc. (``NYMEX'') (a
member of the Intermarket Surveillance Group) related to any financial
instrument traded there that is based, in whole or part, upon an
interest in or performance of silver or gold [sic].
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \10\ of
the Securities Exchange Act of 1934 (the ``Act''), in general, and
furthers the objectives of Section 6(b)(5) \11\ 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 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. 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 the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File No. SR-NYSEArca-2010-25 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-NYSEArca-2010-25. 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 Web site viewing and
printing 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 NYSE Arca. 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 No. SR-NYSEArca-2010-25 and should be
submitted on or before May 27, 2010.
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. 2010-10592 Filed 5-5-10; 8:45 am]
BILLING CODE 8011-01-P