Federal Register: January 6, 2009 (Volume 74, Number 3)
DOCID: fr06ja09-84 FR Doc E8-31352
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-59173; File No. SR-NYSEArca-2008-125]
NOTICE: NOTICES
DOCID: fr06ja09-84
ACTION: Self-Regulatory Organizations; Proposed Rule Changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to the Listing of Units of the United States Short Oil Fund
DOCUMENT SUMMARY:
December 29, 2008.
On November 18, 2008, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder,\2\ a
proposed rule change to list and trade units (``Units'') of the United
States Short Oil Fund, LP (``USSO'' or ``Partnership''). The proposed
rule change was published in the Federal Register on December 1, 2008
for a 15day comment period.\3\ The Commission received no comments on
the proposal. On December 29, 2008, the Exchange filed Amendment No. 1
to the proposed rule change.\4\ This order provides notice of the
filing of Amendment No. 1 and approves the proposed rule change, as
modified by Amendment No. 1 thereto, on an accelerated basis. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ Securities Exchange Act Release No. 58994 (November 21, 2008), 73 FR 72892 (``Notice'').
\4\ In Amendment No. 1, NYSE Arca: (1) Represented that the
Units satisfy the requirements of NYSE Arca Equities Rule 8.300 and
thereby qualify for listing on the Exchange; (2) designated the
Futures Contracts (as defined herein) as the sole underlying
benchmark investment, commodity, or asset for purposes of NYSE Arca
Equities Rule 8.300(d)(2)(ii); and (3) clarified that price
information for the Futures Contracts is calculated or available on at least a 15second delayed basis.
I. Description of the Proposal
NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities,
Inc. (``NYSE Arca Equities''), proposes to list and trade the Units of
USSO pursuant to NYSE Arca Equities Rule 8.300, which governs the
trading of Partnership Units.\5\ USSO, a Delaware limited partnership,
is managed and controlled by United States Commodity Funds LLC
(``General Partner''), a single member limited liability company that
is (1) registered as a commodity pool operator with the Commodity
Futures Trading Commission (``CFTC'') and (2) a member of the National
Futures Association. The General Partner is not affiliated with a
brokerdealer. USSO will comply with the requirements of Rule 10A3 under the Act \6\ as it applies to limited partnerships.
\5\ USSO has filed with the Commission Amendment No. 1 to Form
S1, dated September 29, 2008 (File No. 333152386) (``Registration Statement'').
\6\ 17 CFR 240.10A3.
The investment objective of USSO is to have the changes in
percentage terms of the Units' net asset value (``NAV'') inversely
reflect the changes in percentage terms of the spot price of light,
sweet crude oil delivered to Cushing, Oklahoma, as measured by the
changes in the price of the futures contract on light, sweet crude oil
as traded on the New York Mercantile Exchange (``NYMEX''). The futures
contract employed is the near month expiration contract, except when
the near month contract is within two weeks of expiration, in which
case the futures contract will be the next month contract to expire
(``Benchmark Futures Contract''), less USSO's expenses.\7\ In pursuing
this objective, the primary focus of the General Partner will be taking
short positions in futures contracts \8\ and the management of
investments in shortterm obligations of the United States of two years
or less (``Treasuries''), and cash and/or cash equivalents for margining purposes and as collateral.
\7\ The Benchmark Futures Contract will be changed or ``rolled''
from the near month contract to expire to the next month contract to expire during one day.
\8\ The net assets of USSO will consist primarily of short
positions in futures contracts for crude oil, heating oil, gasoline,
natural gas, and other petroleumbased fuels that are traded on NYMEX, ICE Futures, or other U.S. and foreign exchanges
(collectively, ``Futures Contracts''). USSO may also take short
positions in other crude oilrelated investments such as cash
settled options on Futures Contracts, forward contracts for crude
oil, and overthecounter transactions that are based on the price
of crude oil and other petroleumbased fuels, Futures Contracts, and
indices based on the foregoing (collectively, ``Other Crude Oil Related Investments'').
Additional information about USSO, including its investing strategy and holdings, Basket Amount calculation, creations and redemptions of Units, dissemination and availability of information, trading rules, trading halts, surveillance, and information bulletin, among other things, is contained in the Notice and the Registration Statement.\9\ \9\ See supra notes 3 and 5. Terms referred to, but not defined herein, have the same meaning set forth in the Notice.
II. Discussion and Commission Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act \10\ and the rules and regulations thereunder applicable to a
national securities exchange.\11\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\12\
which requires, among other things, that the Exchange's rules be
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.
\10\ 15 U.S.C. 78f.
\11\ 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).
\12\ 15 U.S.C. 78f(b)(5).
The Exchange proposes to list and trade the Units pursuant to NYSE Arca Equities Rule 8.300. NYSE Arca represents that the Units satisfy the applicable requirements of Rule 8.300, which includes initial and continued listing criteria.\13\
\13\ See supra note 4.
The Commission believes that the proposal to list and trade the
Units on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of
the Act,\14\ which sets forth Congress' finding that it is in the
public interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities. Quotation and lastsale
information regarding the Units will be disseminated through the
facilities of the CTA. The value of the underlying benchmark
investment, commodity, or asset of the Units (the price information for
applicable Futures Contracts) will be calculated and available on a
realtime basis at least every 15 seconds between 10 a.m. and 2:30 p.m.
Eastern Time (``ET''), the normal NYMEX trading hours for the Futures Contracts.\15\
\14\ 15 U.S.C. 78k1(a)(1)(C)(iii).
\15\ See supra note 4.
In addition, USSO's total portfolio composition will be disclosed
each business day that the NYSE Arca is open for trading on USSO's Web
site, which is publicly accessible at no charge. This disclosure will
include, as applicable, the name and value of each Crude Oil Interest,
the specific types of Other Crude OilRelated Investments and
characteristics of such Other Crude OilRelated Investments, Treasuries, and the amount of cash and cash equivalents
[[Page 491]]
held in USSO's portfolio. NYSE Arca will calculate and disseminate
through the facilities of CTA/CQ High Speed Lines an IPV, on a per Unit
basis, updated every 15 seconds between 10 a.m. and 2:30 p.m. ET.\16\
Additionally, the IPV will be published on the NYSE Arca's Web site and
will be available through online information services such as Bloomberg and Reuters.
\16\ See Notice supra note 3, 73 FR at 72896, n.16, and accompanying text.\
Lastly, the Administrator will calculate NAV once each trading day and the NAV for a particular trading day will be released after 4 p.m. ET. The Administrator will calculate NAV as of the earlier of the close of the New York Stock Exchange or 4 p.m. ET. USSO will use the NYMEX closing price (determined at the earlier of the close of that Exchange or 2:30 p.m. ET) for the contracts held on NYMEX, but will calculate or determine the value of all other USSO investments as of the earlier of the close of the NYSE Arca Core Trading Session or 4 p.m. ET.
The Commission also believes that the proposal to list and trade the Units is reasonably designed to promote fair disclosure of information that may be necessary to price the Units appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. NYSE Arca Equities Rule 8.300(d)(2)(ii) provides that NYSE Arca Equities will consider removing from listing Partnership Units if the value of the underlying benchmark investment, commodity or asset is no longer calculated or available on at a least a 15second delayed basis or NYSE Arca Equities stops providing a hyperlink on its Web site to any such investment, commodity or asset value. In addition, if the value of the underlying benchmark investment, commodity or asset or IPV applicable to the Units is not being disseminated as required, the Exchange may halt trading in the Units during the day on which the interruption first occurs. If such interruption persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. Under NYSE Arca Equities Rule 7.34(a)(5), if the Exchange becomes aware that the NAV for the Units is not being disseminated to all market participants at the same time, it will halt trading in the Units on the Exchange until such time as the NAV is available to all market participants. Further, if the portfolio composition applicable to the Units (disseminated via USSO's Web site) is not disseminated to all market participants at the same time, the Exchange will halt trading in the affected Units. Moreover, NYSE Arca Equities Rule 8.300(e) limits certain dealings and trading activity of ETP Holders acting as registered Market Makers in Units, prescribes various recordkeeping and disclosure requirements for ETP Holders, and prohibits the use of any material nonpublic information regarding trading in the underlying physical asset or commodity, futures or options on futures, or any other related derivatives.
The Commission further believes that the trading rules and procedures to which the Units will be subject pursuant to this proposal are consistent with the Act. The Exchange has represented that the Units are equity securities subject to NYSE Arca's rules governing the trading of equity securities.
In support of this proposal, the Exchange has made the following representations:
1. The Units satisfy the requirements of NYSE Arca Equities Rule 8.300, which includes the initial and continued listing criteria for Partnership Units.\17\
\17\ See supra note 4.
2. The Exchange's surveillance procedures are adequate to properly monitor trading of the Units in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws.
3. The Exchange will distribute an Information Bulletin, the contents of which are more fully described in the Notice, to ETP Holders in connection with the trading of the Units.
4. USSO will comply with the requirements of Rule 10A3 under the Act \18\ as it applies to limited partnerships.
\18\ 17 CFR 240.10A3.
This order is based on the Exchange's representations.
The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\19\ for approving the proposed rule change, as modified by
Amendment No. 1 thereto, prior to the 30th day after the date of
publication of notice in the Federal Register. The Commission notes
that it has previously approved the listing and trading, or trading
pursuant to unlisted trading privileges (``UTP''), of Partnership Units
that are similar to the Units.\20\ The Commission also notes that it
has previously approved the listing and trading of certain funds that
are based on underlying commodity or currency benchmarks that seek
daily investment results, before fees and expenses, that correspond to
twice (200%) the daily performance of the underlying benchmark or twice
the inverse (200%) of the daily performance of the underlying
benchmark.\21\ No comments were received on the proposed rule change
during the 15day comment period, and the Commission believes that the
Exchange's proposal to list and trade the Units, as modified by
Amendment No. 1 thereto, does not present any novel or significant
regulatory issues. As such, the Commission believes that accelerating
approval of this proposal should benefit investors by creating, without
undue delay, additional competition in the market for such products. \19\ 15 U.S.C. 78s(b)(2).
\20\ See, e.g., Securities Exchange Act Release Nos. 53582
(March 31, 2006), 71 FR 17510 (April 6, 2006) (SRAmex2005127)
(approving the listing of units of the United States Oil Fund, LP);
56831 (November 21, 2007), 72 FR 67612 (November 29, 2007) (SRAmex
200798) (approving the listing of units of the United States 12
Month Oil Fund, LP and United States 12 Month Natural Gas Fund, LP);
55632 (April 13, 2007), 72 FR 19987 (April 20, 2007) (SRAmex2006
112) (approving the listing of units of the United States Natural
Gas Fund, LP); and 57188 (January 23, 2008), 73 FR 5607 (January 30,
2008) (SRAmex200770) (approving the listing of units of the
United States Heating Oil Fund, LP and United States Gasoline Fund,
LP). See also, e.g., Securities Exchange Act Release Nos. 56832
(November 21, 2007), 72 FR 67328 (November 28, 2007) (SRNYSEArca
2007102) (approving the trading of units of the United States 12
Month Oil Fund, LP and United States 12 Month Natural Gas Fund, LP
pursuant to UTP); 56042 (July 11, 2007), 72 FR 39118 (July 17, 2007)
(SRNYSEArca200745) (approving the trading of units of the United
States Natural Gas Fund, LP pursuant to UTP); and 57294 (February 8, 2008), 73 FR 8917 (February 15, 2008) (SRNYSEArca200778)
(approving the trading of units of the United States Heating Oil
Fund, LP and United States Gasoline Fund, LP pursuant to UTP).
\21\ See, e.g., Securities Exchange Act Release Nos. 58161 (July
15, 2008), 73 FR 42380 (July 21, 2008) (SRAmex200839) (approving
the listing of shares of the ProShares Ultra DJAIG Commodity,
ProShares UltraShort DJAIG Commodity, ProShares Ultra DJAIG
Agriculture, ProShares UltraShort DJAIG Agriculture, ProShares
Ultra DJAIG Crude Oil, ProShares UltraShort DJAIG Crude Oil,
ProShares Ultra Gold, ProShares UltraShort Gold, ProShares Ultra
Silver, ProShares UltraShort Silver, ProShares Ultra Euro, ProShares
UltraShort Euro, ProShares Ultra Yen, and ProShares UltraShort Yen
Funds (collectively, the ``Funds'')); and 58457 (September 3, 2008),
73 FR 52711 (September 10, 2008) (SRNYSEArca200891) (approving the listing of shares of the Funds on the Exchange).
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1 to the proposed rule change,
including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
[[Page 492]]
Electronic Comments
Paper Comments
All submissions should refer to File Number SRNYSEArca2008125. This file number should be included on the subject line if email 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 available publicly. All submissions should refer to File Number SRNYSEArca2008125 and should be submitted on or before January 26, 2009.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\22\ that the proposed rule change (SRNYSEArca2008125), as modified by Amendment No. 1 thereto, be, and it hereby is, approved on an accelerated basis.
\22\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\
\23\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Acting Secretary.
[FR Doc. E831352 Filed 1509; 8:45 am]
BILLING CODE 801101P
SUMMARY:
NYSE Arca, Inc.,
DOCUMENT BODY 2:
December 29, 2008.
On November 18, 2008, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder,\2\ a
proposed rule change to list and trade units (``Units'') of the United
States Short Oil Fund, LP (``USSO'' or ``Partnership''). The proposed
rule change was published in the Federal Register on December 1, 2008
for a 15day comment period.\3\ The Commission received no comments on
the proposal. On December 29, 2008, the Exchange filed Amendment No. 1
to the proposed rule change.\4\ This order provides notice of the
filing of Amendment No. 1 and approves the proposed rule change, as
modified by Amendment No. 1 thereto, on an accelerated basis. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ Securities Exchange Act Release No. 58994 (November 21, 2008), 73 FR 72892 (``Notice'').
\4\ In Amendment No. 1, NYSE Arca: (1) Represented that the
Units satisfy the requirements of NYSE Arca Equities Rule 8.300 and
thereby qualify for listing on the Exchange; (2) designated the
Futures Contracts (as defined herein) as the sole underlying
benchmark investment, commodity, or asset for purposes of NYSE Arca
Equities Rule 8.300(d)(2)(ii); and (3) clarified that price
information for the Futures Contracts is calculated or available on at least a 15second delayed basis.
I. Description of the Proposal
NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities,
Inc. (``NYSE Arca Equities''), proposes to list and trade the Units of
USSO pursuant to NYSE Arca Equities Rule 8.300, which governs the
trading of Partnership Units.\5\ USSO, a Delaware limited partnership,
is managed and controlled by United States Commodity Funds LLC
(``General Partner''), a single member limited liability company that
is (1) registered as a commodity pool operator with the Commodity
Futures Trading Commission (``CFTC'') and (2) a member of the National
Futures Association. The General Partner is not affiliated with a
brokerdealer. USSO will comply with the requirements of Rule 10A3 under the Act \6\ as it applies to limited partnerships.
\5\ USSO has filed with the Commission Amendment No. 1 to Form
S1, dated September 29, 2008 (File No. 333152386) (``Registration Statement'').
\6\ 17 CFR 240.10A3.
The investment objective of USSO is to have the changes in
percentage terms of the Units' net asset value (``NAV'') inversely
reflect the changes in percentage terms of the spot price of light,
sweet crude oil delivered to Cushing, Oklahoma, as measured by the
changes in the price of the futures contract on light, sweet crude oil
as traded on the New York Mercantile Exchange (``NYMEX''). The futures
contract employed is the near month expiration contract, except when
the near month contract is within two weeks of expiration, in which
case the futures contract will be the next month contract to expire
(``Benchmark Futures Contract''), less USSO's expenses.\7\ In pursuing
this objective, the primary focus of the General Partner will be taking
short positions in futures contracts \8\ and the management of
investments in shortterm obligations of the United States of two years
or less (``Treasuries''), and cash and/or cash equivalents for margining purposes and as collateral.
\7\ The Benchmark Futures Contract will be changed or ``rolled''
from the near month contract to expire to the next month contract to expire during one day.
\8\ The net assets of USSO will consist primarily of short
positions in futures contracts for crude oil, heating oil, gasoline,
natural gas, and other petroleumbased fuels that are traded on NYMEX, ICE Futures, or other U.S. and foreign exchanges
(collectively, ``Futures Contracts''). USSO may also take short
positions in other crude oilrelated investments such as cash
settled options on Futures Contracts, forward contracts for crude
oil, and overthecounter transactions that are based on the price
of crude oil and other petroleumbased fuels, Futures Contracts, and
indices based on the foregoing (collectively, ``Other Crude Oil Related Investments'').
Additional information about USSO, including its investing strategy and holdings, Basket Amount calculation, creations and redemptions of Units, dissemination and availability of information, trading rules, trading halts, surveillance, and information bulletin, among other things, is contained in the Notice and the Registration Statement.\9\ \9\ See supra notes 3 and 5. Terms referred to, but not defined herein, have the same meaning set forth in the Notice.
II. Discussion and Commission Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act \10\ and the rules and regulations thereunder applicable to a
national securities exchange.\11\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\12\
which requires, among other things, that the Exchange's rules be
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.
\10\ 15 U.S.C. 78f.
\11\ 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).
\12\ 15 U.S.C. 78f(b)(5).
The Exchange proposes to list and trade the Units pursuant to NYSE Arca Equities Rule 8.300. NYSE Arca represents that the Units satisfy the applicable requirements of Rule 8.300, which includes initial and continued listing criteria.\13\
\13\ See supra note 4.
The Commission believes that the proposal to list and trade the
Units on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of
the Act,\14\ which sets forth Congress' finding that it is in the
public interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities. Quotation and lastsale
information regarding the Units will be disseminated through the
facilities of the CTA. The value of the underlying benchmark
investment, commodity, or asset of the Units (the price information for
applicable Futures Contracts) will be calculated and available on a
realtime basis at least every 15 seconds between 10 a.m. and 2:30 p.m.
Eastern Time (``ET''), the normal NYMEX trading hours for the Futures Contracts.\15\
\14\ 15 U.S.C. 78k1(a)(1)(C)(iii).
\15\ See supra note 4.
In addition, USSO's total portfolio composition will be disclosed
each business day that the NYSE Arca is open for trading on USSO's Web
site, which is publicly accessible at no charge. This disclosure will
include, as applicable, the name and value of each Crude Oil Interest,
the specific types of Other Crude OilRelated Investments and
characteristics of such Other Crude OilRelated Investments, Treasuries, and the amount of cash and cash equivalents
[[Page 491]]
held in USSO's portfolio. NYSE Arca will calculate and disseminate
through the facilities of CTA/CQ High Speed Lines an IPV, on a per Unit
basis, updated every 15 seconds between 10 a.m. and 2:30 p.m. ET.\16\
Additionally, the IPV will be published on the NYSE Arca's Web site and
will be available through online information services such as Bloomberg and Reuters.
\16\ See Notice supra note 3, 73 FR at 72896, n.16, and accompanying text.\
Lastly, the Administrator will calculate NAV once each trading day and the NAV for a particular trading day will be released after 4 p.m. ET. The Administrator will calculate NAV as of the earlier of the close of the New York Stock Exchange or 4 p.m. ET. USSO will use the NYMEX closing price (determined at the earlier of the close of that Exchange or 2:30 p.m. ET) for the contracts held on NYMEX, but will calculate or determine the value of all other USSO investments as of the earlier of the close of the NYSE Arca Core Trading Session or 4 p.m. ET.
The Commission also believes that the proposal to list and trade the Units is reasonably designed to promote fair disclosure of information that may be necessary to price the Units appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. NYSE Arca Equities Rule 8.300(d)(2)(ii) provides that NYSE Arca Equities will consider removing from listing Partnership Units if the value of the underlying benchmark investment, commodity or asset is no longer calculated or available on at a least a 15second delayed basis or NYSE Arca Equities stops providing a hyperlink on its Web site to any such investment, commodity or asset value. In addition, if the value of the underlying benchmark investment, commodity or asset or IPV applicable to the Units is not being disseminated as required, the Exchange may halt trading in the Units during the day on which the interruption first occurs. If such interruption persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. Under NYSE Arca Equities Rule 7.34(a)(5), if the Exchange becomes aware that the NAV for the Units is not being disseminated to all market participants at the same time, it will halt trading in the Units on the Exchange until such time as the NAV is available to all market participants. Further, if the portfolio composition applicable to the Units (disseminated via USSO's Web site) is not disseminated to all market participants at the same time, the Exchange will halt trading in the affected Units. Moreover, NYSE Arca Equities Rule 8.300(e) limits certain dealings and trading activity of ETP Holders acting as registered Market Makers in Units, prescribes various recordkeeping and disclosure requirements for ETP Holders, and prohibits the use of any material nonpublic information regarding trading in the underlying physical asset or commodity, futures or options on futures, or any other related derivatives.
The Commission further believes that the trading rules and procedures to which the Units will be subject pursuant to this proposal are consistent with the Act. The Exchange has represented that the Units are equity securities subject to NYSE Arca's rules governing the trading of equity securities.
In support of this proposal, the Exchange has made the following representations:
1. The Units satisfy the requirements of NYSE Arca Equities Rule 8.300, which includes the initial and continued listing criteria for Partnership Units.\17\
\17\ See supra note 4.
2. The Exchange's surveillance procedures are adequate to properly monitor trading of the Units in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws.
3. The Exchange will distribute an Information Bulletin, the contents of which are more fully described in the Notice, to ETP Holders in connection with the trading of the Units.
4. USSO will comply with the requirements of Rule 10A3 under the Act \18\ as it applies to limited partnerships.
\18\ 17 CFR 240.10A3.
This order is based on the Exchange's representations.
The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\19\ for approving the proposed rule change, as modified by
Amendment No. 1 thereto, prior to the 30th day after the date of
publication of notice in the Federal Register. The Commission notes
that it has previously approved the listing and trading, or trading
pursuant to unlisted trading privileges (``UTP''), of Partnership Units
that are similar to the Units.\20\ The Commission also notes that it
has previously approved the listing and trading of certain funds that
are based on underlying commodity or currency benchmarks that seek
daily investment results, before fees and expenses, that correspond to
twice (200%) the daily performance of the underlying benchmark or twice
the inverse (200%) of the daily performance of the underlying
benchmark.\21\ No comments were received on the proposed rule change
during the 15day comment period, and the Commission believes that the
Exchange's proposal to list and trade the Units, as modified by
Amendment No. 1 thereto, does not present any novel or significant
regulatory issues. As such, the Commission believes that accelerating
approval of this proposal should benefit investors by creating, without
undue delay, additional competition in the market for such products. \19\ 15 U.S.C. 78s(b)(2).
\20\ See, e.g., Securities Exchange Act Release Nos. 53582
(March 31, 2006), 71 FR 17510 (April 6, 2006) (SRAmex2005127)
(approving the listing of units of the United States Oil Fund, LP);
56831 (November 21, 2007), 72 FR 67612 (November 29, 2007) (SRAmex
200798) (approving the listing of units of the United States 12
Month Oil Fund, LP and United States 12 Month Natural Gas Fund, LP);
55632 (April 13, 2007), 72 FR 19987 (April 20, 2007) (SRAmex2006
112) (approving the listing of units of the United States Natural
Gas Fund, LP); and 57188 (January 23, 2008), 73 FR 5607 (January 30,
2008) (SRAmex200770) (approving the listing of units of the
United States Heating Oil Fund, LP and United States Gasoline Fund,
LP). See also, e.g., Securities Exchange Act Release Nos. 56832
(November 21, 2007), 72 FR 67328 (November 28, 2007) (SRNYSEArca
2007102) (approving the trading of units of the United States 12
Month Oil Fund, LP and United States 12 Month Natural Gas Fund, LP
pursuant to UTP); 56042 (July 11, 2007), 72 FR 39118 (July 17, 2007)
(SRNYSEArca200745) (approving the trading of units of the United
States Natural Gas Fund, LP pursuant to UTP); and 57294 (February 8, 2008), 73 FR 8917 (February 15, 2008) (SRNYSEArca200778)
(approving the trading of units of the United States Heating Oil
Fund, LP and United States Gasoline Fund, LP pursuant to UTP).
\21\ See, e.g., Securities Exchange Act Release Nos. 58161 (July
15, 2008), 73 FR 42380 (July 21, 2008) (SRAmex200839) (approving
the listing of shares of the ProShares Ultra DJAIG Commodity,
ProShares UltraShort DJAIG Commodity, ProShares Ultra DJAIG
Agriculture, ProShares UltraShort DJAIG Agriculture, ProShares
Ultra DJAIG Crude Oil, ProShares UltraShort DJAIG Crude Oil,
ProShares Ultra Gold, ProShares UltraShort Gold, ProShares Ultra
Silver, ProShares UltraShort Silver, ProShares Ultra Euro, ProShares
UltraShort Euro, ProShares Ultra Yen, and ProShares UltraShort Yen
Funds (collectively, the ``Funds'')); and 58457 (September 3, 2008),
73 FR 52711 (September 10, 2008) (SRNYSEArca200891) (approving the listing of shares of the Funds on the Exchange).
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1 to the proposed rule change,
including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
[[Page 492]]
Electronic Comments
Paper Comments
All submissions should refer to File Number SRNYSEArca2008125. This file number should be included on the subject line if email 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 available publicly. All submissions should refer to File Number SRNYSEArca2008125 and should be submitted on or before January 26, 2009.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\22\ that the proposed rule change (SRNYSEArca2008125), as modified by Amendment No. 1 thereto, be, and it hereby is, approved on an accelerated basis.
\22\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\
\23\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Acting Secretary.
[FR Doc. E831352 Filed 1509; 8:45 am]
BILLING CODE 801101P