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Federal Register / Vol. 73, No.

14 / Tuesday, January 22, 2008 / Notices 3765

investing in such products and SECURITIES AND EXCHANGE addition, the Exchange proposes a
competition in the market for Index COMMISSION conforming revision to Commentary .05
Securities, while maintaining to Amex Rule 411 to apply the
[Release No. 34–57150; File No. SR–Amex– suitability standard to all derivative
transparency of the underlying 2007–130]
components comprising an index. As securities that seek investment results
such, the Commission believes it is Self-Regulatory Organizations; based on a multiple of the direct or
reasonable and consistent with the Act American Stock Exchange LLC; Notice inverse performance of an underlying
for the Exchange to eliminate the 331⁄3% of Filing and Order Granting asset. The text of the proposed rule
requirement from the listing standards Accelerated Approval of a Proposed change is available at the Exchange, the
Rule Change, as Modified by Commission’s Public Reference Room,
for Index Securities in the manner
Amendment Nos. 1 and 2 Thereto, and http://www.amex.com.
described in the proposal.
The Commission finds good cause for Relating to Certain Modifications to the II. Self-Regulatory Organization’s
Initial Listing Standards for Index- Statement of the Purpose of, and
approving the proposed rule change
Linked Securities, Commodity-Linked Statutory Basis for, the Proposed Rule
before the 30th day after the date of
Securities, and Currency-Linked Change
publication of notice of filing thereof in
Securities In its filing with the Commission, the
the Federal Register. With respect to the
Exchange’s proposals to: (i) Eliminate January 15, 2008. Exchange included statements
the requirement that an eligible index Pursuant to section 19(b)(1) of the concerning the purpose of, and basis for,
for Index Securities be calculated and Securities Exchange Act of 1934 the proposed rule change and discussed
weighted following a specified (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 any comments it received on the
notice is hereby given that on November proposed rule change. The text of these
methodology; (ii) provide that indexes
30, 2007, the American Stock Exchange statements may be examined at the
based on the equal-dollar or modified
LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with places specified in Item IV below. The
equal-dollar weighting methods be Exchange has prepared summaries, set
rebalanced semi-annually rather than the Securities and Exchange
Commission (‘‘Commission’’) the forth in sections A, B, and C below, of
quarterly, as is currently the case; and the most significant aspects of such
(iii) eliminate the continued listing proposed rule change as described in
Items I and II below, which Items have statements.
requirement prohibiting an index from
increasing or decreasing by more than been substantially prepared by the A. Self-Regulatory Organization’s
331⁄3% from the number of index Exchange. On December 5, 2007, the Statement of the Purpose of, and
components initially listed rule change, Exchange filed Amendment No. 1 to the Statutory Basis for, the Proposed Rule
proposed rule change. On December 21, Change
the Commission notes that it has
2007, the Exchange filed Amendment
recently approved substantially similar 1. Purpose
No. 2 to the proposed rule change. This
proposals for other national securities order provides notice of the proposed The purpose of the proposed rule
exchanges.21 The Commission does not rule change, as amended, and approves change is to amend the generic listing
believe that these proposals raise any the proposed rule change, as modified standards of sections 107D, 107E, and
novel regulatory issues. Therefore, the by Amendment Nos. 1 and 2 thereto, on 107F of the Amex Company Guide so
Commission finds good cause, an accelerated basis. that section 107 Securities may be listed
consistent with section 19(b)(2) of the where the positive and/or negative
Act,22 to approve the proposed rule I. Self-Regulatory Organization’s payment at maturity may be accelerated
change on an accelerated basis. Statement of the Terms of Substance of by a multiple of the performance of the
the Proposed Rule Change underlying Reference Asset. The
V. Conclusion
The Exchange proposes to amend Exchange believes that liberalizing the
It is therefore ordered, pursuant to sections 107D, 107E, and 107F of the existing listing criteria for section 107
section 19(b)(2) of the Act,23 that the Amex Company Guide to revise the Securities will benefit the marketplace
proposed rule change (SR–Amex–2007– initial listing standards applicable to and investors by providing additional
137), as modified by Amendment No. 1, Index-Linked Securities, Commodity- risk/return alternative structures.
Linked Securities, and Currency-Linked Sections 107D, 107E, and 107F of the
be, and it hereby is, approved on an
Securities (collectively, the ‘‘Section Amex Company Guide set forth the
accelerated basis.
107 Securities’’),3 respectively. In generic listing standards that permit the
For the Commission, by the Division of Exchange to list and trade Index-Linked
Trading and Markets, pursuant to delegated 1 15 U.S.C. 78s(b)(1). Securities, Commodity-Linked
authority.24 2 17 CFR 240.19b–4. Securities, and Currency-Linked
3 Index-Linked Securities are securities that
Florence E. Harmon, Securities, respectively, pursuant to
provide for the payment at maturity of a cash
Deputy Secretary. amount based on the performance of an underlying
Rule 19b–4(e) under the Act.4 Currently,
[FR Doc. E8–995 Filed 1–18–08; 8:45 am] index or indexes of equity securities (‘‘Underlying
Index’’). See Section 107D of the Amex Company currency derivatives or Currency Trust Shares (as
BILLING CODE 8011–01–P Guide. Commodity-Linked Securities are securities defined in Amex Rule 1200B), or a basket or index
that provide for the payment at maturity of a cash of any of the foregoing (‘‘Currency Reference
amount based on the performance of one or more Asset,’’ and, together with the Underlying Index
physical commodities or commodity futures, and Commodity Reference Asset, collectively, the
options or other commodity derivatives or ‘‘Reference Asset’’). See Section 107F of the Amex
Commodity-Based Trust Shares (as defined in Company Guide.
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Amex Rule 1200A), or a basket or index of any of 4 See 17 CFR 240.19b–4(e). Rule 19b–4(e)

the foregoing (‘‘Commodity Reference Asset’’). See provides that the listing and trading of a new
21 See supra notes 12 and 14. Section 107E of the Amex Company Guide. derivative securities product by a self-regulatory
22 15
Currency-Linked Securities are securities that organization (‘‘SRO’’) shall not be deemed a
U.S.C. 78s(b)(2).
provide for the payment at maturity of a cash proposed rule change, pursuant to paragraph (c)(1)
23 15 U.S.C. 78s(b)(2).
amount based on the performance of one or more of Rule 19b–4, if the Commission has approved,
24 17 CFR 200.30–3(a)(12). currencies, or options or currency futures or other Continued

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3766 Federal Register / Vol. 73, No. 14 / Tuesday, January 22, 2008 / Notices

the respective generic listing standards Commentary .05 to Amex Rule 411 to all registered representative in making
for such securities state, among other section 107 Securities that seek recommendations to the customer.
requirements, that the payment at investment results based on a multiple
2. Statutory Basis
maturity may or may not provide for a of the direct or inverse performance of
multiple of the positive performance of an underlying Reference Asset. The Exchange believes that the
the applicable underlying Reference Currently, Commentary .05 to Amex proposed rule change is consistent with
Asset, and in no event may payment at Rule 411 is limited to Index Fund Section 6(b) of the Act,6 in general, and
maturity be based on a multiple of the Shares, listed pursuant to Amex Rule furthers the objectives of Section 6(b)(5)
negative performance of the applicable 1000A(b)(2), that seek to provide of the Act,7 in particular, in that it is
underlying Reference Asset. investment results that either exceed the designed to prevent fraudulent and
Amex seeks to clarify and amend the performance of a specified foreign or manipulative acts and practices, to
generic listing standards for each of the domestic stock index by a specified promote just and equitable principles of
section 107 Securities such that, with multiple or that correspond to the trade, to foster cooperation and
respect to the listing and trading of an inverse (opposite) of the performance of coordination with persons engaged in
issue of such securities pursuant to Rule such index by a specified multiple. The facilitating transactions in securities,
19b–4(e): (1) The payment at maturity proposed revision would apply and to remove impediments to and
may or may not provide for a multiple Commentary .05 to Amex Rule 411 to all perfect the mechanism of a free and
of the direct or inverse performance of derivative securities, including Index- open market and a national market
the applicable Reference Asset; and (2) Linked Securities, Commodity-Linked system.
in no event may a loss or negative Securities, and Currency-Linked
payment at maturity be accelerated by a B. Self-Regulatory Organization’s
Securities, that seek to provide Statement on Burden on Competition
multiple that exceeds twice the investment results that either exceed the
performance of the applicable Reference performance of an underlying reference The Exchange believes the proposed
Asset. The Exchange believes that the asset by a specified multiple or that rule change will impose no burden on
current restriction in the generic listing correspond to the inverse (opposite) of competition that is not necessary or
standards for each of the section 107 the performance of an underlying appropriate in furtherance of the
Securities is unnecessarily limiting, reference asset by a specified multiple. purposes of the Act.
given the changes in the market for
Prior to commencement of trading, C. Self-Regulatory Organization’s
these securities and the demand for
differing structures. In addition, the the Exchange will issue an Information Statement on Comments on the
Exchange notes that certain exchange- Circular to its members and member Proposed Rule Change Received From
traded funds (‘‘ETFs’’) seeking to organizations providing guidance with Members, Participants or Others
provide (a) investment results that regard to member firm compliance The Exchange states that no written
correspond to or exceed twice (200%) responsibilities (including suitability comments were solicited or received
the direct performance of a specified obligations) when effecting transactions with respect to the proposed rule
stock index, or (b) investment results in section 107 Securities that seek change.
that correspond to twice (¥200%) the investment results based on a multiple
of the direct or inverse performance of III. Solicitation of Comments
inverse or opposite of the index’s
performance, are currently listed and an underlying Reference Asset and Interested persons are invited to
traded on the Exchange.5 highlighting the special risks and submit written data, views, and
The Exchange also seeks to amend characteristics of the securities and arguments concerning the foregoing,
Commentary .05 to Amex Rule 411 applicable Exchange rules. This including whether the proposed rule
(Duty to Know and Approve Information Circular will set forth the change is consistent with the Act.
Customers). Section 107 Securities are requirements relating to Commentary Comments may be submitted by any of
subject to the general eligibility or .05 to Amex Rule 411. Specifically, the the following methods:
suitability requirements existing for all Information Circular will remind
members of their obligations in Electronic Comments
products listed and traded on Amex, as
set forth in Amex Rule 411. The recommending transactions in the • Use the Commission’s Internet
Exchange specifically seeks to apply securities so that members have a comment form (http://www.sec.gov/
reasonable basis to believe that (1) the rules/sro.shtml); or
pursuant to Section 19(b) of the Act, the SRO’s recommendation is suitable for a • Send an e-mail to rule-
trading rules, procedures, and listing standards for customer given reasonable inquiry comments@sec.gov. Please include File
the product class that would include the new concerning the customer’s investment Number SR–Amex–2007–130 on the
derivatives securities product, and the SRO has a objectives, financial situation and
surveillance program for the product class.
subject line.
5 See, e.g., Securities Exchange Act Release Nos. needs, and any other information
known by such member, and (2) the Paper Comments
52553 (October 3, 2005), 70 FR 59100 (October 11,
2005) (SR–Amex–2004–62) (approving the listing customer can evaluate the special • Send paper comments in triplicate
and trading of shares of the xtraShares Trust); 54040 characteristics, and is able to bear the to Nancy M. Morris, Secretary,
(June 23, 2006), 71 FR 37629 (June 30, 2006) (SR–
Amex–2006–41) (approving the listing and trading
financial risks, of such investment. In Securities and Exchange Commission,
of shares of the ProShares Trust); 55117 (January 17, connection with the suitability 100 F Street, NE., Washington, DC
2007), 72 FR 3442 (January 25, 2007) (SR–Amex– obligation, the Information Circular will 20549–1090.
2006–101) (approving the listing and trading of also provide that members make
shares of the ProShares Trust based on various
All submissions should refer to File
sector indexes); 56592 (October 1, 2007), 72 FR
reasonable efforts to obtain the Number SR–Amex–2007–130. This file
following information: (1) The number should be included on the
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57364 (October 9, 2007) (SR–Amex–2007–60)


(approving the listing and trading of shares of the customer’s financial status; (2) the subject line if e-mail is used. To help the
ProShares Trust based on various international customer’s tax status; (3) the customer’s
equity indexes); and 56713 (October 29, 2007), 72
Commission process and review your
FR 61915 (November 1, 2007) (SR–Amex–2007–74)
investment objectives; and (4) such
(approving the listing and trading of shares of funds other information used or considered to 6 15 U.S.C. 78f(b).
of the Rydex ETF Trust). be reasonable by such member or 7 15 U.S.C. 78f(b)(5).

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Federal Register / Vol. 73, No. 14 / Tuesday, January 22, 2008 / Notices 3767

comments more efficiently, please use Commission notes that a variety of proposed rule change (SR–Amex–2007–
only one method. The Commission will exchange-traded funds seeking to 130), as modified by Amendment Nos.
post all comments on the Commission’s provide (a) investment results that 1 and 2 thereto, be, and it hereby is,
Internet Web site (http://www.sec.gov/ correspond to or exceed twice (200%) approved on an accelerated basis.
rules/sro.shtml). Copies of the the direct performance of a specified For the Commission, by the Division of
submission, all subsequent stock index, or (b) investment results Trading and Markets, pursuant to delegated
amendments, all written statements that correspond to twice (¥200%) the authority.13
with respect to the proposed rule inverse or opposite of the index’s Florence E. Harmon,
change that are filed with the performance, are currently listed and Deputy Secretary.
Commission, and all written traded on the Exchange.10 In addition,
[FR Doc. E8–996 Filed 1–18–08; 8:45 am]
communications relating to the the Commission further believes that
BILLING CODE 8011–01–P
proposed rule change between the heightened suitability standards are
Commission and any person, other than appropriate for derivative securities
those that may be withheld from the products, including section 107
SECURITIES AND EXCHANGE
public in accordance with the Securities, that seek to provide
COMMISSION
provisions of 5 U.S.C. 552, will be investment results that correspond to
available for inspection and copying in the direct or inverse performance of an
the Commission’s Public Reference underlying reference asset by a specified [Release No. 34–57152; File No. SR–BSE–
Room, 100 F Street, NE., Washington, multiple and allow for a loss or negative 2007–55]
DC 20549, on official business days payment at maturity to be accelerated by
Self-Regulatory Organizations; Boston
between the hours of 10 a.m. and 3 p.m. a specified multiple. Before
Stock Exchange, Inc.; Notice of Filing
Copies of such filing also will be recommending transactions in these
and Immediate Effectiveness of a
available for inspection and copying at types of leveraged products, Exchange
Proposed Rule Change and
the principal office of the Exchange. All members must have a reasonable basis
Amendment No. 1 Thereto Relating to
comments received will be posted to believe that the customer can
Exchange Fees and Charges To Be
without change; the Commission does evaluate the special characteristics, and
Assessed in Connection With the
not edit personal identifying is able to bear the financial risks, of
Implementation of an Electronic
information from submissions. You such investment. The Commission
Registration Process
should submit only information that expects the Exchange to continue to
you wish to make available publicly. All monitor the application of its suitability January 15, 2008.
submissions should refer to File requirements, including those under
Number SR–Amex–2007–130 and Commentary .05 to Amex Rule 411, as Pursuant to section 19(b)(1) of the
should be submitted on or before proposed. Securities Exchange Act of 1934
February 12, 2008. The Commission finds good cause for (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
approving the proposed rule change notice is hereby given that on December
IV. Commission’s Findings and Order prior to the thirtieth day after the date 21, 2007, the Boston Stock Exchange,
Granting Accelerated Approval of the of publication of notice thereof in the Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with
Proposed Rule Change Federal Register. The Commission notes the Securities and Exchange
After careful consideration, the that it has approved identical revisions Commission (‘‘Commission’’) the
Commission finds that the proposed to the initial listing standards for the proposed rule change as described in
rule change is consistent with the same type of derivative securities Items I, II and III below, which Items
requirements of the Act and the rules products, as proposed by another have been prepared substantially by the
and regulations thereunder applicable to national securities exchange.11 With Exchange. On January 11, 2008, BSE
a national securities exchange.8 In respect to the revisions to Commentary filed Amendment No. 1 to the proposed
particular, the Commission finds that .05 to Amex Rule 411, the Commission rule change. BSE has designated this
the proposed rule change is consistent believes that the proposal strengthens proposal as one establishing or changing
with section 6(b)(5) of the Act,9 which the suitability standards and raises no a member due, fee, or other charge
requires that the rules of a national new regulatory issues. Accordingly, the imposed by the Exchange under section
securities exchange be designed, among Commission finds good cause for 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–
other things, to promote just and approving the proposal on an 4(f)(2) thereunder,4 which renders the
equitable principles of trade, to remove accelerated basis, pursuant to section proposal effective upon filing with the
impediments to and perfect the 19(b)(2) of the Act. Commission. The Commission is
mechanism of a free and open market publishing this notice to solicit
and a national market system, and, in VI. Conclusion comments on the proposed rule change,
general, to protect investors and the It is therefore ordered, pursuant to as amended, from interested persons.
public interest. section 19(b)(2) of the Act,12 that the
The Commission believes that the I. Self-Regulatory Organization’s
Exchange’s proposal is consistent with 10 See supra note 5 and accompanying text. Statement of the Terms of Substance of
the Act, and, in particular, reasonably 11 See Securities Exchange Act Release No. 57149 the Proposed Rule Change
(January 15, 2008) (SR–NYSEArca–2007–122)
balances the removal of impediments to (approving the proposal to make substantively The BSE proposes to amend the BSE
a free and open market with the identical revisions to the initial listing standards for Fee Schedule and the Boston Options
protection of investors and the public Index-Linked Securities listed and/or traded on
Exchange (‘‘BOX’’) Fee Schedule in
interest, two principles set forth in NYSE Arca, Inc. (‘‘NYSE Arca’’)). See also
Securities Exchange Act Release No. 56907 order to adopt certain fees to be charged
section 6(b)(5) of the Act. The
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(December 5, 2007), 72 FR 70640 (December 12,


2007) (SR–NYSEArca–2007–122) (providing notice 13 17
8 In approving this rule change, the Commission CFR 200.30–3(a)(12).
of the proposal to make substantively identical 1 15
notes that it has considered the proposed rule’s revisions to the initial listing standards for Index- U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
impact on efficiency, competition, and capital Linked Securities listed and/or traded on NYSE
formation. See 15 U.S.C. 78c(f). Arca). 3 15 U.S.C. 78s(b)(3)(A)(ii).
9 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78s(b)(2). 4 17 CFR 240.19b–4(f)(2).

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