[Federal Register Volume 75, Number 61 (Wednesday, March 31, 2010)]
[Notices]
[Pages 16217-16219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7110]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61775; File No. SR-NYSEArca-2010-17]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Regarding the
Listing of the ProShares Ultra MSCI Mexico Investable Market Fund
March 24, 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 March 18, 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 and II
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 et seq.
\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, through its wholly-owned subsidiary NYSE Arca
Equities, Inc. (``NYSE Arca Equities''), proposes to list and trade
shares (``Shares'') of the following fund of the ProShares Trust
(``Trust''): ProShares Ultra MSCI Mexico Investable Market. 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 following
fund under NYSE Arca Equities Rule 5.2(j)(3), the Exchange's listing
standards for Investment Company Units (``ICUs''): \4\ ProShares Ultra
MSCI Mexico Investable Market (the ``Fund'').
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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 is an ``index fund'' that seeks to provide daily
investment results that, before fees and expenses, correspond to twice
(200%) of the daily performance of the MSCI Mexico Investable Market
Index (``Index''). The Fund does not seek to achieve its stated
objective over a period of time greater than one day.
According to the Trust's Registration Statement,\5\ the Index
measures the performance of the Mexican equity market. The Index is a
capitalization-weighted index that aims to capture 99% of the publicly
available total market capitalization. Component companies are adjusted
for available float and must meet objective criteria for inclusion in
the Index, taking into consideration unavailable strategic
shareholdings and limitations to foreign ownership. As of February 26,
2010, the Index was concentrated in the telecommunications services
industry group, which comprised 35.84% of the market capitalization of
the Index, and included companies with capitalizations between $124.10
million and 44.68 billion. The average capitalization of the companies
comprising the Index was approximately $5.84 billion.
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\5\ See the Trust's Registration Statement on Form N-1A, dated
February 26, 2010 (File Nos. 333-89822 and 811-21114)
(``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)(B) to NYSE Arca Equities Rule
5.2(j)(3) applicable to listing of ICUs based on international or
[[Page 16218]]
global indexes. The Index meets all such requirements except for those
set forth in Commentary .01(a)(B)(3).\6\ The Exchange represents that
(1) except for the requirement under Commentary .01(a)(B)(3) to NYSE
Arca Equities Rule 5.2(j)(3) that the most heavily weighted component
stock shall not exceed 25% of the weight of the Index, 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
ICUs shall apply to the Shares; and (3) the Trust is required to comply
with Rule 10A-3 \7\ under the Securities Exchange Act of 1934 (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 ICUs including, but not limited to,
requirements relating to the dissemination of key information such as
the Index value and Intraday Indicative Value, rules governing the
trading of equity securities, trading hours, trading halts,
surveillance,\8\ and Information Bulletin to ETP Holders, as set forth
in Exchange rules for ICUs and in prior Commission orders approving the
generic listing rules applicable to the listing and trading of ICUs.\9\
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\6\ Specifically, the Index fails to meet the requirement that
the most heavily weighted component stock shall not exceed 25% of
the weight of the Index. As of February 26, 2010, the most heavily
weighted component stock (America Movil S.A.B. de C.V.) represented
27.50% of the Index weight.
\7\ 17 CFR 240.10A-3.
\8\ The Exchange may obtain information for surveillance
purposes via the Intermarket Surveillance Group (``ISG'') from other
exchanges who are members of ISG. For a list of current members of
ISG, see http://www.isgportal.org. However, the Exchange does not
have in place a comprehensive surveillance agreement with the Bolsa
Mexicana de Valores and such exchange is not an ISG member.
\9\ See, e.g. Securities Exchange Act Release Nos. 55621 (April
12, 2007), 72 FR 19571 (April 18, 2007) (SR-NYSEArca-2006-86) (order
approving generic listing standards for ICUs based on international
or global indexes); 44551 (July 12, 2001), 66 FR 37716 (July 19,
2001) (SR-PCX-2001-14) (order approving generic listing standards
for ICUs and Portfolio Depositary Receipts); 41983 (October 6,
1999), 64 FR 56008 (October 15, 1999) (SR-PCX-98-29) (order
approving rules for listing and trading of ICUs).
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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 Trust's
Registration Statement or on the Web site for the Fund (http://www.proshares.com), as applicable.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \10\ of
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. 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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\10\ 15 U.S.C. 78f(b).
\11\ 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
states that the proposed rule change does not significantly affect the
protection of investors or the public interest and does not impose any
significant burden on competition. In addition, the Exchange believes
that it has developed adequate trading rules, procedures, surveillance
programs, and listing standards for the continued listing and trading
of the Shares.
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The Commission notes that the Index fails to meet only one of the
requirements set forth in Commentary .01(a)(B)(3) to NYSE Arca Equities
Rule 5.2(j)(3) by only a small amount and that the Exchange has
represented that the Shares of the Fund currently satisfy all of the
other generic listing standards under NYSE Arca Equities Rule 5.2(j)(3)
and all other requirements applicable to ICUs, as set forth in Exchange
rules and prior Commission orders approving the generic listing rules
applicable to the listing and trading of ICUs. Therefore, the
Commission believes that the listing and trading of the Shares do not
present any novel or significant issues or impose any significant
burden on competition, and that waiving the 30-day operative delay will
benefit the market and investors by providing market participants with
additional investing choices. For these reasons, the Commission
designates the proposed rule change as operative under upon filing.\18\
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\18\ 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).
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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
[[Page 16219]]
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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-2010-17 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 Number SR-NYSEArca-2010-17. 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-2010-17 and
should be submitted on or before April 21, 2010.
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\19\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7110 Filed 3-30-10; 8:45 am]
BILLING CODE 8011-01-P