[Federal Register Volume 75, Number 135 (Thursday, July 15, 2010)]
[Notices]
[Pages 41252-41254]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17192]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62471; File No. SR-NYSEArca-2010-64]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by NYSE Arca, Inc. Relating to Listing of the Wilshire Micro-Cap
ETF
July 8, 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 July 1, 2010, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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 prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 proposes to list and trade shares of the Wilshire
Micro-Cap ETF under NYSE Arca Equities Rule 5.2(j)(3). 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 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
The Exchange proposes to list and trade the Shares of the Wilshire
Micro-Cap ETF (the ``Fund'') under NYSE Arca Equities Rule 5.2(j)(3),
the Exchange's listing standards for Investment Company Units
(``Units'').\4\ The Fund is a series of the Claymore Exchange-Traded
Fund Trust.
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\4\ An Investment Company Unit is a security that represents an
interest in a registered investment company that holds securities
comprising, or otherwise based on or representing an interest in, an
index or portfolio of securities (or 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).
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The Fund seeks investment results that correspond generally to the
performance, before the Fund's fees and expenses, of the Wilshire US
Micro-Cap Index\SM\ (the ``Wilshire Micro-Cap'' or the ``Index'').\5\
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\5\ See the Claymore Exchange-Traded Fund Trust's registration
statement on Form N-1A, dated May 18, 2010 (File Nos. 333-134551;
811-21906) (``Registration Statement''). Statements herein regarding
the Fund, the Shares and the Wilshire US Micro-Cap Index are based
on the Registration Statement.
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The Exchange is submitting this proposed rule change because the
Index for the Fund does not meet all of the ``generic'' listing
requirements of Commentary .01(a)(A) to NYSE Arca Equities Rule
5.2(j)(3) applicable to listing of ICUs based on US indexes. The Index
meets all such requirements except for those set forth in Commentary
.01(a)(A)(1) \6\ and
[[Page 41253]]
.01(a)(A)(5).\7\ Specifically, as of April 21, 2010, 76.93% of the
weight of the Index components have a market capitalization greater
than $75 million. In addition, as of April 21, 2010, the Index included
201 non-NMS stocks out of a total of approximately 1,564 components in
the Index. Thus, non-NMS stocks comprised approximately 12.8% of the
number of stocks in the Index. Stocks comprising 97.3% of the weight of
the Index were NMS stocks.\8\
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\6\ Commentary .01(a)(A)(1) to NYSE Arca Equities Rule 5.2(j)(3)
provides that component stocks (excluding Units and securities
defined in Section 2 of Rule 8, collectively, ``Derivative
Securities Products'') that in the aggregate account for at least
90% of the weight of the index or portfolio (excluding such
Derivative Securities Products) each shall have a minimum market
value of at least $75 million.
\7\ Commentary .01(a)(A)(5) to NYSE Arca Equities Rule 5.2(j)(3)
provides that all securities in the index or portfolio shall be US
Component Stocks listed on a national securities exchange and shall
be NMS Stocks as defined in Rule 600 of Regulation NMS under the
Securities Exchange Act of 1934 (17 U.S.C. 78a) (``Act''). NYSE Arca
Equities Rule 5.2(j)(3) defines the term ``US Component Stock'' as
an equity security that is registered under Sections 12(b) or 12(g)
of the Act or an American Depositary Receipt, the underlying equity
security of which is registered under Sections 12(b) or 12(g) of the
Act.
\8\ Non-NMS stocks are traded either on the OTC Bulletin Board
or the Pink OTC Markets.
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According to the Registration Statement, the Fund, using a low cost
``passive'' or ``indexing'' investment approach, will seek to
replicate, before the Fund's fees and expenses, the performance of the
Wilshire Micro-Cap. The Wilshire Micro-Cap is a rules-based index
comprised of approximately 1,564 securities of micro-capitalization
companies as of March 31, 2010, as defined by Wilshire Associates
Incorporated (``Wilshire'' or the ``Index Provider''). The Wilshire
Micro-Cap is designed to represent micro-sized companies and is a
subset of the Wilshire 5000 Total Market Index\SM\ (the ``Wilshire
5000''). The Wilshire Micro-Cap represents a float-adjusted, market
capitalization-weighted index of the issues ranked below 2500 by market
capitalization of the Wilshire 5000.
The Exchange represents that: (1) Except for Commentary
.01(a)(A)(1) and .01(a)(A)(5) to NYSE Arca Equities Rule 5.2(j)(3), the
Shares of the Fund currently satisfy all of the generic listing
standards under NYSE Arca Equities Rule 5.2(j)(3); (2) the continued
listing standards under NYSE Arca Equities Rules 5.2(j)(3) and
5.5(g)(2) applicable to Units shall apply to the Shares; and (3) the
Trust is required to comply with Rule 10A-3 \9\ under the Act for the
initial and continued listing of the Shares. In addition, the Exchange
represents that the Shares will comply with all other requirements
applicable to Units including, but not limited to, requirements
relating to the dissemination of key information such as the value of
the Index and Intraday Indicative Value, rules governing the trading of
equity securities, trading hours, trading halts, surveillance, and
Information Bulletin to ETP Holders, as set forth in Exchange rules
applicable to Units and prior Commission orders approving the generic
listing rules applicable to the listing and trading of Units.\10\
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\9\ 17 CFR 240.10A-3.
\10\ See, e.g., Securities Exchange Act Release No. 44551 (July
12, 2001), 66 FR 37716 (July 19, 2001) (SR-PCX-2001-14) (order
approving generic listing standards for Units and Portfolio
Depositary Receipts); Securities Exchange Act Release No. 41983
(October 6, 1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29)
(order approving rules for listing and trading of Units).
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The Exchange believes that, notwithstanding the fact that the Index
does not meet certain generic listing criteria in NYSE Arca Equities
Rule 5.2(j)(3), Commentary .01, the Index is sufficiently broad-based,
and the Index stocks are sufficiently liquid to deter potential
manipulation. As of June 9, 2010, the average market capitalization of
Index stocks was $82.52 million, 62.82% of the Index weight was
comprised of stocks with a global monthly trading volume of greater
than one million shares, and 77.82% of the Index weight was comprised
of stocks with a global monthly trading volume of greater than 500,000
shares. The average global monthly trading volume for Index stocks for
the period December 2009 through May 2010 ranged from 3.7 million to
9.7 million shares. In addition, as of April 21, 2010, stocks
comprising only 2.7% of the Index weight were non-NMS stocks.
Detailed descriptions of the Fund, the Index, procedures for
creating and redeeming Shares, transaction fees and expenses,
dividends, distributions, taxes, risks, and reports to be distributed
to beneficial owners of the Shares can be found in the Registration
Statement or on the Web site for the Fund (http://www.claymore.com), as
applicable.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \11\ of
the Act, in general, and furthers the objectives of Section
6(b)(5),\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 facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system. The Exchange believes that the
proposed rule change will facilitate the listing and trading of an
additional type of exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace.
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\11\ 15 U.S.C. 78f(b).
\12\ 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
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 Number SR-NYSEArca-2010-64 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.
[[Page 41254]]
All submissions should refer to File Number SR-NYSEArca-2010-64. 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 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-2010-64 and should be submitted on or before August 5, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17192 Filed 7-14-10; 8:45 am]
BILLING CODE 8010-01-P