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 \7\ and, in particular, the requirements of Section 6 of the Act.\8\ Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,\9\ which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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.
\7\ 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).
\8\ 15 U.S.C. 78f.

\9\ 15 U.S.C. 78f(b)(5).

The Commission notes that the proposal to delete the requirement that the Equity Reference Asset be calculated based on certain specified methodologies would conform the Exchange's requirements to the current listing standards for Equity IndexLinked Securities of another national securities exchange.\10\ The Commission further believes that the proposal to require Equity Reference Assets that are based on the equaldollar or modified equaldollar weighting methods to be rebalanced at least semiannually should benefit investors by providing a wider
[[Page 67776]]
selection of derivative products based on such Equity Reference Assets. The Commission believes that the proposal to adjust the minimum rebalancing frequency requirement is reasonable, given the increasing number of equaldollar or modified equaldollar weighted indexes that are rebalanced on a semiannualbasis, and should allow for the listing and trading of certain Equity IndexLinked Securities that would otherwise not be able to be listed and traded on the Exchange. \10\ See supra note 4.

The Commission finds good cause for approving the proposed rule change prior to the 30th day after the date of publication of the notice of filing thereof in the Federal Register. With respect to the deletion of the provision requiring Equity Reference Assets to be based on certain specified calculation methodologies, the Commission notes that it has approved the deletion of a similar requirement under NYSE listing standards for Equity IndexLinked Securities \11\ and does not believe that this proposal raises any novel regulatory issues. With respect to the Exchange's proposal to adjust the minimum rebalancing frequency for certain Equity Reference Assets, accelerating approval of this proposal should benefit investors by providing, without undue delay, additional Equity IndexLinked Securities products for investors and fostering competition in the market for such products. Therefore, the Commission finds good cause, consistent with Section 19(b)(2) of the Act,\12\ to approve the proposed rule change on an accelerated basis.
\11\ Id.
\12\ 15 U.S.C. 78s(b)(2).

V. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\13\ that the proposed rule change (SRNYSEArca2007118) be, and it hereby is, approved on an accelerated basis.
\13\ Id.

\14\ 17 CFR 200.303(a)(12).

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
[FR Doc. E723204 Filed 112907; 8:45 am]
BILLING CODE 801101P

SUMMARY: NYSE Arca, Inc.,

DOCUMENT BODY 2: November 26, 2007.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that on November 13, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``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. This order provides notice of the proposed rule change and approves the proposed rule change on an accelerated basis.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange proposes to amend NYSE Arca Equities Rule 5.2(j)(6) to amend certain requirements relating to indexes underlying Equity Index Linked Securities.\3\ The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and http://www.nyse.com. \3\ The Exchange defines Equity IndexLinked Securities as securities that provide for the payment at maturity of a cash amount based on the performance of an underlying index or indexes of equity securities (each such index, an ``Equity Reference Asset''). See NYSE Arca Equities Rule 5.2(j)(6).
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(d) currently provides that each Equity Reference Asset (i) must be calculated based on either a capitalization, modified capitalization, price, equaldollar, or modified equaldollar weighting methodology, and (ii) if based upon the equaldollar or modified equaldollar weighting method, must be rebalanced at least quarterly. The Exchange proposes to amend NYSE Arca Equities Rule 5.2(j)(6)(B)(I)(2)(d) to delete the requirement that the Equity Reference Asset used in connection with an issuance of Equity IndexLinked Securities must be calculated based on either a capitalization, modified capitalization, price, equaldollar, or modified equaldollar weighting
[[Page 67775]]
methodology. In addition, the Exchange proposes to provide that Equity Reference Assets based upon the equaldollar or modified equaldollar weighting method must be rebalanced at least semiannually, rather than quarterly, as is currently the case.

The Exchange states that the elimination of the limitations as to weighting methodologies permitted for Equity Reference Assets underlying Equity IndexLinked Securities would make NYSE Arca Equities Rule 5.2(j)(6) consistent with the Equity IndexLinked Securities listing standards of other national securities exchanges, such as the New York Stock Exchange LLC (``NYSE''),\4\ which has no such requirements. The Exchange further states that a significant number of currently existing equity indexes that utilize the equaldollar or modified equaldollar weighting methodology are rebalanced semiannually rather than quarterly. Because the issuer of Equity IndexLinked Securities generally licenses the right to utilize the underlying index from a thirdparty index sponsor, it is often not within the issuer's control to have the index rebalanced more frequently. As such, it is not possible currently to list Equity IndexLinked Securities under NYSE Arca Equities Rule 5.2(j)(6) based on such indexes. The Exchange believes, however, that, because these types of indexes are relatively common and detailed information concerning the procedures governing the construction of the underlying index will be available to investors either in the issuer's prospectus or on the index sponsor's Internet Web site, it would be appropriate to allow investors to make their own decisions as to the sufficiency of a semiannual rebalancing of an equaldollar or modified equaldollar index underlying an issuance of Equity IndexLinked Securities. The Exchange further states that investors and issuers would benefit from NYSE Arca's ability to list, without delay, Equity IndexLinked Securities based on a broader group of such indexes.
\4\ See Section 703.22 of the NYSE Listed Company Manual. 2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\5\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\6\ 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, 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.
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others

The Exchange has neither solicited nor received written comments on 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

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 \7\ and, in particular, the requirements of Section 6 of the Act.\8\ Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,\9\ which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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.
\7\ 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).
\8\ 15 U.S.C. 78f.

\9\ 15 U.S.C. 78f(b)(5).

The Commission notes that the proposal to delete the requirement that the Equity Reference Asset be calculated based on certain specified methodologies would conform the Exchange's requirements to the current listing standards for Equity IndexLinked Securities of another national securities exchange.\10\ The Commission further believes that the proposal to require Equity Reference Assets that are based on the equaldollar or modified equaldollar weighting methods to be rebalanced at least semiannually should benefit investors by providing a wider
[[Page 67776]]
selection of derivative products based on such Equity Reference Assets. The Commission believes that the proposal to adjust the minimum rebalancing frequency requirement is reasonable, given the increasing number of equaldollar or modified equaldollar weighted indexes that are rebalanced on a semiannualbasis, and should allow for the listing and trading of certain Equity IndexLinked Securities that would otherwise not be able to be listed and traded on the Exchange. \10\ See supra note 4.

The Commission finds good cause for approving the proposed rule change prior to the 30th day after the date of publication of the notice of filing thereof in the Federal Register. With respect to the deletion of the provision requiring Equity Reference Assets to be based on certain specified calculation methodologies, the Commission notes that it has approved the deletion of a similar requirement under NYSE listing standards for Equity IndexLinked Securities \11\ and does not believe that this proposal raises any novel regulatory issues. With respect to the Exchange's proposal to adjust the minimum rebalancing frequency for certain Equity Reference Assets, accelerating approval of this proposal should benefit investors by providing, without undue delay, additional Equity IndexLinked Securities products for investors and fostering competition in the market for such products. Therefore, the Commission finds good cause, consistent with Section 19(b)(2) of the Act,\12\ to approve the proposed rule change on an accelerated basis.
\11\ Id.
\12\ 15 U.S.C. 78s(b)(2).

V. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\13\ that the proposed rule change (SRNYSEArca2007118) be, and it hereby is, approved on an accelerated basis.
\13\ Id.

\14\ 17 CFR 200.303(a)(12).

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
[FR Doc. E723204 Filed 112907; 8:45 am]
BILLING CODE 801101P