[Federal Register: October 13, 2006 (Volume 71, Number 198)]
[Notices]
[Page 60594-60599]
[DOCID:fr13oc06-115]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54569; File No. SR-NYSEArca-2006-64]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Order Granting Accelerated Approval of Proposed Rule Change
Relating to Trading Shares of the PowerShares DB G10 Currency Harvest
Fund Pursuant to Unlisted Trading Privileges

October 4, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 21, 2006, NYSE Arca, Inc. (``Exchange''), through its
wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE Arca
Equities'' or the ``Corporation''), filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons and is
approving the proposal on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is proposing to trade shares (``Shares'') of the
PowerShares DB G10 Currency Harvest Fund (the ``Trust'' or ``Fund'')
pursuant to unlisted trading privileges (``UTP'') under Commentary .02
to NYSE Arca Equities Rule 8.200.

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 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. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Pursuant to Commentary .02 to NYSE Arca Equities Rule 8.200, the
Exchange may approve for listing and trading trust issued receipts
(``TIRs'') investing in shares or securities (``Investment Shares'')
that hold investments in any combination of futures contracts, options
on futures contracts, forward contracts, commodities, swaps or high
credit quality short-term fixed income securities or other
securities.\3\ The Commission previously approved a proposal to list
and trade the Shares of the Fund \4\ by the American Stock Exchange LLC
(the ``Amex'').\5\ The Exchange proposes to trade pursuant to UTP the
Shares of the Fund pursuant to Commentary .02 to NYSE Arca Equities
Rule 8.200.
---------------------------------------------------------------------------

    \3\ In April 2006, the Commission approved Commentary .02 to
NYSE Arca Equities Rule 8.200, which sets forth the rules related to
listing and trading criteria for Investment Shares, and approved
trading pursuant to UTP the shares of the DB Commodity Index
Tracking Fund. See Securities Exchange Act Release No. 53736 (April
27, 2006), 71 FR 26582 (May 5, 2006) (SR-PCX-2006-22).
    \4\ The Fund and Master Fund were previously named the DB
Currency Index Value Fund and DB Currency Index Value Master Fund,
respectively. Telephone conversation between Michael Cavalier,
Associate General Counsel, NYSE, and Ronesha A. Butler, Special
Counsel, Division of Market Regulation (``Division''), Commission,
on October 4, 2006.
    \5\ See Securities Exchange Act Release No. 54450 (September 14,
2006) (SR-Amex-2006-44) (the ``Amex Order''). See also Securities
Exchange Act Release No. 54351 (August 23, 2006), 71 FR 51245, as
corrected by 71 FR 53492 (September 11, 2006) (SR-Amex-2006-44).
---------------------------------------------------------------------------

    The Shares represent beneficial ownership interests in the Fund's
net assets, consisting solely of the common units of beneficial
interests of the DB G10 Currency Harvest Master Fund (the ``Master
Fund''). The Master Fund is a statutory trust created under Delaware
law whose investment portfolio will consist primarily of futures
contracts on the currencies comprising the Deutsche Bank G10 Currency
Future Harvest Index--Excess ReturnTM (the ``DBCHI'' or
``Index'') and will include cash and U.S Treasury securities for margin
purposes and other high credit quality short-term fixed income
securities. Both the Fund and the Master Fund will be commodity pools
operated by DB Commodity Services LLC (the ``Managing Owner'').\6\
---------------------------------------------------------------------------

    \6\ The Managing Owner is registered as a commodity pool
operator (the ``CPO'') and commodity trading advisor (the ``CTA'')
with the Commodity Futures Trading Commission (``CFTC'') and is a
member of the National Futures Association (``NFA''). The Managing
Owner will serve as the CPO and CTA of the Fund and the Master Fund.
---------------------------------------------------------------------------

    The investment objective of the Fund and the Master Fund is to
reflect the performance of the Index, over time, less the expenses of
the operation of the Fund and the Master Fund. The Fund will pursue its
investment objective by investing substantially all of its assets in
the Master Fund. Each Share will correlate with a Master Fund share
issued by the Master Fund and held by the Fund. The Master Fund will
pursue its investment objective by taking long futures positions in the
three (3) Index Currencies associated with the highest interest rates
and short futures positions in the three (3) Index Currencies
associated with the lowest interest rates \7\ and will adjust its
holdings

quarterly as the Index is adjusted. In addition, the Master Fund will
also hold cash and U.S. Treasury securities for deposit with futures
commission merchants as margin and other high credit quality short-term
fixed income securities. The Fund is not managed on a discretionary
basis but instead seeks to track the Index pursuant to established
rules and procedures. For more information, see the Amex Order.
---------------------------------------------------------------------------

    \7\ The use of long and short positions in the construction of
the Index causes the Index to rise as a result of any upward price
movement of Index Currencies expected to gain relative to the U.S.
Dollar and to rise as a result of any downward price movement of
Index Currencies expected to lose relative to the U.S. Dollar.
---------------------------------------------------------------------------

    The Index, at any time, is comprised of six (6) currencies from The
Group Ten (``G10'') countries,\8\ each of which is traded on the
Chicago Mercantile Exchange (the ``CME''). The notional amounts of each
index currency included in the Index (``Index Currency'') are based on
the Index closing level as of the period in which the Index is re-
weighted.\9\ The Index closing level reflects an arithmetic weighted
average of the change in the futures positions on the Index Currencies'
exchange rates against the U.S. dollar since March 12, 1993. On such
date, the Index closing level was $100. The sponsor of the Index is
Deutsche Bank AG London (``DB London'' or the ``Index Sponsor'').
---------------------------------------------------------------------------

    \8\ The G10 currencies are the United States Dollar, the Euro,
the Japanese Yen, the Canadian Dollar, the Swiss Franc, the British
Pound, the Australian Dollar, the New Zealand Dollar, the Norwegian
Krone and the Swedish Krona (the ``Eligible Index Currencies'').
    \9\ The Index Sponsor reviews and re-weights the Index on a
quarterly basis. For more information, see the Amex Order, supra
note 5.
---------------------------------------------------------------------------

    (a) The Shares. A description of the operation of the Fund and the
creation and redemption process for the Shares is set forth in the Amex
Order. To summarize, issuances of Shares will be made only in one or
more blocks of 200,000 Shares or multiples thereof (``Basket
Aggregation'' or ``Basket''). The Fund will issue and redeem the Shares
on a continuous basis, by or through participants that have entered
into participant agreements (each, an ``Authorized Participant'') \10\
with the Managing Owner.
---------------------------------------------------------------------------

    \10\ An ``Authorized Participant'' is a person, who at the time
of submitting to the trustee an order to create or redeem one or
more Baskets: (i) Is a registered broker-dealer; (ii) is a
Depository Trust Company Participant; and (iii) has in effect a
valid Participant Agreement.
---------------------------------------------------------------------------

    Baskets will be issued in exchange for an amount of cash equal to
the NAV per Share times 200,000 Shares (``Basket Amount''). The Basket
Amount will be determined on each business day by The Bank of New York
(``Administrator'').\11\ Authorized Participants that wish to purchase
a Basket must transfer the Basket Amount to the Administrator (the
``Cash Deposit Amount''). Baskets are then separable upon issuance into
the Shares that will be traded on NYSE Arca MarketPlace on a UTP
basis.\12\
---------------------------------------------------------------------------

    \11\ At or about 4 p.m. Eastern time (``ET'') each business day,
the Administrator will determine the Basket Amount for orders placed
by Authorized Participants received before 1 p.m. ET that day. Thus,
although Authorized Participants place orders to purchase Shares
throughout the trading day until 1 p.m. ET, the actual Basket Amount
is determined at 4 p.m. ET or thereafter. On each business day, the
Administrator will make available immediately prior to 9:30 a.m. ET,
the most recent Basket Amount for the creation of a Basket.
According to the Amex Order, the Amex will disseminate every 15
seconds throughout the trading day, via the facilities of the
Consolidated Tape (``CT''), an amount representing on a per Share
basis, the current value of the Basket Amount.
    \12\ Shares are separate and distinct from the shares of the
Master Fund. The Exchange expects that the number of outstanding
Shares will increase and decrease from time to time as a result of
creations and redemptions of Baskets.
---------------------------------------------------------------------------

    The Shares will not be individually redeemable but will only be
redeemable in Baskets. To redeem, an Authorized Participant will be
required to accumulate enough Shares to constitute a Basket (i.e.,
200,000 shares). Authorized Participants that wish to redeem a Basket
will receive cash in exchange for each Basket surrendered in an amount
equal to the NAV per Basket (the ``Cash Redemption Amount''). Upon the
surrender of the Shares and payment of applicable redemption
transaction fee, taxes or charges, the Administrator will deliver to
the redeeming Authorized Participant the Cash Redemption Amount. The
operation of the Fund and creation and redemption process is described
in more detail in the Amex Order.
    After 4 p.m. Eastern time (``ET'') each business day, the
Administrator will determine the NAV \13\ for the Fund, utilizing the
current settlement value of the particular long and short exchange-
traded futures contracts on the Index Currencies. The calculation
methodology for the NAV is described in more detail in the Amex Order.
---------------------------------------------------------------------------

    \13\ The NAV for the Fund is the total assets of the Master Fund
less total liabilities of the Master Fund. The NAV is calculated by
including any unrealized profit or loss on futures contracts and any
other credit or debit accruing to the Master Fund but unpaid or not
received by the Master Fund. The NAV is then used to compute all
fees (including the management and administrative fees) that are
calculated from the value of Master Fund assets. The Administrator
will calculate the NAV per Share by dividing the NAV by the number
of Shares outstanding.
---------------------------------------------------------------------------

    After 4 p.m. ET each business day, the Administrator, Amex and
Managing Owner will disseminate the NAV for the Shares and the Basket
Amount (for orders placed during the day). The Basket Amount and the
NAV are communicated by the Administrator to all Authorized
Participants via facsimile or electronic mail message and will be
available on the Fund's Web site at http://www.dbfunds.db.com.\14\ The

Exchange will provide a hyperlink to the Fund's Web site on its Web
site at http://www.nysearca.com.

---------------------------------------------------------------------------

    \14\ According to the Amex Order, Amex has represented that the
NAV for the Fund will be made available to all market participants
at the same time. If the NAV is not disseminated to all market
participants at the same time, the Amex will halt trading in the
Shares. However, if the Fund temporarily does not disseminate the
NAV to all market participants at the same time, the Amex has agreed
to immediately contact the Commission staff to discuss measures that
may be appropriate under the circumstances.
---------------------------------------------------------------------------

    (b) Availability of Information About the Index, the Underlying
Futures Contracts and the Shares. In order to provide updated
information relating to the Fund for use by investors, professionals
and persons wishing to create or redeem the Shares, the Amex will
disseminate through the facilities of the CT an updated Indicative Fund
Value (the ``IFV''). The IFV will be disseminated on a per Share basis
every 15 seconds from 9:30 a.m. to 4:15 p.m. ET. The IFV will be
calculated based on the cash required for creations and redemptions
(i.e., NAV x 200,000) adjusted to reflect the price changes of the
Index Currencies through investments held by the Master Fund, i.e.,
futures contracts and options on futures and/or forwards.\15\
---------------------------------------------------------------------------

    \15\ On each business day, the Administrator will make available
immediately prior to 9:30 a.m. ET via the facilities of the CT the
most recent Basket Amount for the creation of a Basket.
---------------------------------------------------------------------------

    The IFV will not reflect price changes to the price of an
underlying currency between the close of trading of the futures
contract at the relevant futures exchange and 4:15 p.m. ET. While the
Shares will trade on the NYSE Arca Marketplace from 9:30 a.m. to 4:15
p.m. ET, regular trading hours for each of the Index Currencies on the
CME is 8:20 a.m. to 3 p.m. (ET), though electronic trading of exchange
traded foreign currency products on computerized trading systems (e.g.,
GLOBEX [supreg] at CME) takes place on a nearly 24-hour basis.
Therefore, the value of a Share may be influenced by non-concurrent
trading hours between the NYSE Arca Marketplace and the various futures
exchanges on which the futures contracts based on the Index Currencies
are traded.
    While the market for futures trading for each of the Index
Currencies is open, the IFV can be expected to closely approximate the
value per Share of the Basket Amount. However, during trading hours
when the futures contracts have ceased trading, spreads and resulting
premiums or discounts may widen, and therefore, increase the

difference between the price of the Shares and the NAV of the Shares.
IFV on a per Share basis should not be viewed as a real time update of
the NAV, which is calculated only once a day.
    DB London, as the Index Sponsor, will publish the value of the
Index at least once every fifteen (15) seconds throughout each trading
day on the CT, Bloomberg, Reuters, and on its Web site at http://index.db.com and on the Fund's Web site at http://www.dbfunds.db.com.

The closing Index level will similarly be provided by DB London and the
Fund. In addition, any adjustments or changes to the Index will also be
provided by DB London and the Fund on their respective Web sites.\16\
---------------------------------------------------------------------------

    \16\ According to the Amex Order, the Sponsor has in place
procedures to prevent the improper sharing of information between
different affiliates and departments. Specifically, an information
barrier exists between the personnel within DB London that calculate
and reconstitute the Index and other personnel of the Sponsor,
including but not limited to the Managing Owner, sales and trading,
external or internal fund managers, and bank personnel who are
involved in hedging the bank's exposure to instruments linked to the
Index, in order to prevent the improper sharing of information
relating to the recomposition of the Index.
---------------------------------------------------------------------------

    The daily settlement prices for the foreign currency futures
contracts comprising the Index and held by the Master Fund are publicly
available on the Internet Web sites of the futures exchanges trading
the particular contracts, as well as automated quotation systems,
published or other public sources, or on-line information services such
as Bloomberg or Reuters. In addition, the Exchange will provide a
hyperlink on its Internet Web site to the Fund's Internet Web site. All
of the foreign currency futures contracts in which the Master Fund
currently expects to invest are traded on the CME, although currency
futures contracts on the eligible Index Currencies also trade on other
futures exchanges in the United States and the Master Fund may invest
in such contracts.\17\
---------------------------------------------------------------------------

    \17\ Other futures exchanges may include, for example, the New
York Board of Trade and other futures exchanges which have a
comprehensive surveillance sharing agreement with the Exchange or is
an Intermarket Surveillance Group (``ISG'') member.
---------------------------------------------------------------------------

    In addition, various data vendors and news publications publish
futures prices and data. Futures quotes and last sale information for
the Index Currencies are widely disseminated through a variety of major
market data vendors worldwide,\18\ including Bloomberg and Reuters. In
addition, complete real-time data for such futures is available by
subscription from Reuters and Bloomberg. The specific contract
specifications for the futures contracts are also available from the
CME on its Web site, as well as other financial informational sources.
---------------------------------------------------------------------------

    \18\ Telephone conversation between Michael Cavalier, Associate
General Counsel, NYSE, and Ronesha A. Butler, Special Counsel,
Division, Commission, on October 4, 2006.
---------------------------------------------------------------------------

    The Web site for the Fund is http://www.dbfunds.db.com, to which the Exchange will hyperlink at http://www.nysearca.com. The Web site

for the Fund, which is publicly accessible at no charge, will contain
the following information: (a) The current NAV per Share daily and the
prior business day's NAV and the reported closing price; (b) the mid-
point of the bid-ask price in relation to the NAV as of the time the
NAV is calculated (the ``Bid-Ask Price'');\19\ (c) the calculation of
the premium or discount of such price against such NAV; (d) data in
chart form displaying the frequency distribution of discounts and
premiums of the Bid-Ask Price against the NAV, within appropriate
ranges for each of the four (4) previous calendar quarters; (e) the
prospectus; and (f) other applicable quantitative information. The Amex
will make available on its Web site the daily trading volume of the
Shares. Quotations for and last sale information regarding the Shares
will be disseminated via the CTA/CQS.
---------------------------------------------------------------------------

    \19\ The Bid-Ask Price of Shares is determined using the highest
bid and lowest offer as of the time of calculation of the NAV.
---------------------------------------------------------------------------

    Investors may obtain, on a 24-hour basis, currency pricing
information from various financial information service providers.
Current currency spot prices are also generally available with bid/ask
spreads from foreign exchange dealers. Complete real-time data for
futures and options prices traded on the CME and the Philadelphia Stock
Exchange (``Phlx'') are also available by subscription from information
service providers. CME and Phlx also provide delayed futures and
options information on current and past trading sessions and market
news free of charge on their respective Web sites. There are a variety
of other public Web sites that provide information on currency, such as
Bloomberg (http://www.bloomberg.com/markets/currencies/eurafr_currencies.html
), which regularly reports current foreign currency

pricing for a fee. Other service providers include CBS Market Watch
(http://marketwatch.com/tools.stockresearch/globalmarkets) and Yahoo! Finance (http://finance.yahoo.com/currency). Many of these sites offer
y). Many of these sites offer
price quotations drawn from other published sources, and as the
information is supplied free of charge, it generally is subject to time
delays.
    As noted above, the Administrator calculates the NAV of the Fund
once each trading day and disseminates such NAV to all market
participants at the same time.\20\ In addition, the Administrator
causes to be made available on a daily basis the Cash Deposit Amount to
be deposited in connection with the issuance of the Shares in Baskets.
Other investors can also request such information directly from the
Administrator.
---------------------------------------------------------------------------

    \20\ See supra note 14.
---------------------------------------------------------------------------

    (c) UTP Trading Criteria. The Exchange represents that it will
cease trading the Shares if: (a) the listing market stops trading the
Shares because of a regulatory halt similar to a halt based on NYSE
Arca Equities Rule 7.12 or a halt because the IFV or the value of the
Index is no longer available at least every 15 seconds; or (b) the
listing market delists the Shares. Additionally, the Exchange may cease
trading the Shares if such other event shall occur or condition exists
which in the opinion of the Exchange makes further dealings on the
Exchange inadvisable.
    (d) Trading Rules. The Exchange deems the Shares to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
Shares will trade on the NYSE Arca Marketplace from 9:30 a.m. until
4:15 p.m. ET. The Exchange has appropriate rules to facilitate
transactions in the Shares during this trading session. The minimum
trading increment for Shares on the Exchange will be $0.01.
    The trading of the Shares will be subject to Commentary .02(e)(1)-
(4) to NYSE Arca Equities Rule 8.200, which sets forth certain
restrictions on ETP Holders acting as registered Market Makers in TIRs
that invest in Investment Shares to facilitate surveillance.
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares. Trading may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. These may include: (1) the extent to
which trading is not occurring in the underlying futures contracts; or
(2) whether other unusual conditions or circumstances detrimental to
the maintenance of a fair and orderly market are present. In addition,
trading in Shares will be subject to trading halts caused by
extraordinary market volatility pursuant to the Exchange's ``circuit
breaker''

rule \21\ or by the halt or suspension of trading of the underlying
futures contracts. See ``UTP Trading Criteria'' above for specific
instances when the Exchange will cease trading the Shares.
---------------------------------------------------------------------------

    \21\ See NYSE Arca Equities Rule 7.12.
---------------------------------------------------------------------------

    Shares will be deemed ``Eligible Listed Securities,'' as defined in
NYSE Arca Equities Rule 7.55, for purposes of the Intermarket Trading
System (``ITS'') Plan and therefore will be subject to the trade
through provisions of NYSE Arca Equities Rule 7.56, which require that
ETP Holders avoid initiating trade-throughs for ITS securities.
    Unless exemptive or no-action relief is available, the Shares will
be subject to the short sale rule, Rule 10a-1 under the Act.\22\ If
exemptive or no-action relief is provided, the Exchange will issue a
notice detailing the terms of the exemption or relief.
---------------------------------------------------------------------------

    \22\ According to the Amex Order, the Fund expects to seek
relief, in the near future, from the Commission in connection with
the trading of the Shares from the operation of the short sale rule,
Rule 10a-1 under the Act. If granted, the Shares would be exempt
from Rule 10a-1 under the Act permitting sales without regard to the
``tick'' requirements of Rule 10a-1 under the Act.
---------------------------------------------------------------------------

    (e) Surveillance. The Exchange intends to utilize its existing
surveillance procedures applicable to derivative products to monitor
trading in the Shares. The Exchange represents that these procedures
are adequate to properly monitor Exchange trading of the Shares and to
deter and detect violations of Exchange rules.
    The Exchange's current trading surveillance focuses on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations.
    Further, trading in the Shares will be subject to Commentary
.02(e)(1)-(4) to NYSE Arca Equities Rule 8.200, which sets forth
certain restrictions on ETP Holders acting as registered Market Makers
in TIRs that invest in Investment Shares to facilitate surveillance.
Commentary .02(e)(1) to NYSE Arca Equities Rule 8.200 requires that the
ETP Holder acting as a registered Market Maker in the Shares provide
the Exchange with information relating to its trading in the underlying
physical asset or commodity, related futures or options on futures, or
any other related derivatives. In addition, Commentary .02(e)(1) to
NYSE Arca Equities Rule 8.200 prohibits the ETP Holder acting as a
registered Market Maker in the Shares from being affiliated with a
market maker in the underlying physical asset or commodity, related
futures or options on futures or any other related derivative unless
adequate information barriers are in place, as provided in NYSE Arca
Equities Rule 7.26. Commentary .02(e)(2)-(3) to NYSE Arca Equities Rule
8.200 requires that Market Makers handling the Shares provide the
Exchange with all the necessary information relating to their trading
in the underlying physical assets or commodities, related futures
contracts and options thereon or any other derivative. Commentary
.02(e)(4) to NYSE Arca Equities Rule 8.200 prohibits the ETP Holder
acting as a registered Market Maker in the Shares from using any
material nonpublic information received from any person associated with
an ETP Holder or employee of such person regarding trading by such
person or employee in the underlying physical asset or commodity,
related futures or options on futures or any other related derivative
(including the Shares).
    The Exchange is able to obtain information regarding trading in the
Shares and the underlying futures contracts via the Intermarket
Surveillance Group (``ISG'') from other exchanges who are members or
affiliates of the ISG, including the CME.\23\ In addition, to the
extent that the Master Fund invests in foreign currency futures
contracts traded on futures exchanges other than CME, the Exchange must
have a comprehensive surveillance sharing agreement with that futures
exchange or the futures exchange must be an ISG member.
---------------------------------------------------------------------------

    \23\ For a list of the current members and affiliate members of
ISG, see http://www.isgportal.comtes offer .

---------------------------------------------------------------------------

    (f) Information Bulletin. Prior to the commencement of trading, the
Exchange will inform its ETP Holders in an Information Bulletin of the
special characteristics and risks associated with trading the Shares.
Specifically, the Information Bulletin will discuss the following: (1)
The procedures for purchases and redemptions of Shares in Baskets (and
that Shares are not individually redeemable); (2) NYSE Arca Equities
Rule 9.2(a),\24\ which imposes a duty of due diligence on its ETP
Holders to learn the essential facts relating to every customer prior
to trading the Shares; (3) how information regarding the IFV is
disseminated; (4) the requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior to or concurrently
with the confirmation of a transaction; and (5) trading information.
---------------------------------------------------------------------------

    \24\ The Exchange recently amended NYSE Arca Equities Rule
9.2(a) (``Diligence as to Accounts'') to provide that ETP Holders,
before recommending a transaction, must have reasonable grounds to
believe that the recommendation is suitable for the customer based
on any facts disclosed by the customer as to his other security
holdings and as to his financial situation and needs. Further, the
proposed rule amendment provides, with a limited exception, that
prior to the execution of a transaction recommended to a non-
institutional customer, the ETP Holders shall make reasonable
efforts to obtain information concerning the customer's financial
status, tax status, investment objectives, and any other information
that they believe would be useful to make a recommendation. See
Securities Exchange Act Release No. 54045 (June 26, 2006), 71 FR
37971 (July 3, 2006) (SR-PCX-2005-115).
---------------------------------------------------------------------------

    In addition, the Information Bulletin will advise ETP Holders,
prior to the commencement of trading, of the prospectus delivery
requirements applicable to the Fund. The Exchange notes that investors
purchasing Shares directly from the Fund (by delivery of the Basket
Amount) will receive a prospectus. ETP Holders purchasing Shares from
the Fund for resale to investors will deliver a prospectus to such
investors. The Information Bulletin will also discuss any exemptive,
no-action and interpretive relief granted by the Commission from any
rules under the Act.
    In addition, the Information Bulletin will reference that the Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Bulletin will also reference that the CFTC
has regulatory jurisdiction over the trading of futures contracts.
    The Information Bulletin will also disclose that the NAV for the
Shares will be calculated after 4 p.m. ET each trading day and that
information about the Shares and the Index will be publicly available
on the Fund Web site to which the Exchange will hyperlink from its Web
site.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\25\ in general, and furthers the
objectives of Section 6(b)(5),\26\ in particular, because it is
designed to prevent fraudulent and manipulative act 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 and perfect the mechanisms of a free
and open market, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Exchange believes that the proposal is consistent
with Rule

12f-5 under the Act \27\ because it deems the Shares to be equity
securities, thus rendering the Shares subject to the Exchange's
existing rules governing the trading of equity securities.
---------------------------------------------------------------------------

    \27\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

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

    Written comments on the proposed rule change were neither solicited
nor received.

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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NYSEArca-2006-64 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2006-64. 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 inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal offices 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-2006-64 and should be submitted on or before
November 3, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

    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.\28\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\29\ which requires that an
exchange have rules designed, among other things, to promote just and
equitable principles of trade, 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.
---------------------------------------------------------------------------

    \28\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Commission finds that the proposal is consistent
with Section 12(f) of the Act,\30\ which permits an exchange to trade,
pursuant to UTP, a security that is listed and registered on another
exchange.\31\ The Commission also finds that the proposal is consistent
with Rule 12f-5 under the Act,\32\ which provides that an exchange
shall not extend UTP to a security unless the exchange has in effect a
rule or rules providing for transactions in the class or type of
security to which the exchange extends UTP. NYSEArca rules deem the
Shares to be equity securities, thus trading in the Shares will be
subject to the Exchange's existing rules governing the trading of
equity securities.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78l(f).
    \31\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally
prohibits a broker-dealer from trading a security on a national
securities exchange unless the security is registered on that
exchange pursuant to Section 12 of the Act. Section 12(f) of the Act
excludes from this restriction trading in any security to which an
exchange ``extends UTP.'' When an exchange extends UTP to a
security, it allows its members to trade the security as if it were
listed and registered on the exchange even though it is not so
listed and registered.
    \32\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

    The Commission further believes that the proposal is consistent
with Section 11A(a)(1)(C)(iii) of the Act,\33\ which sets forth
Congress's 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.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    In support of the proposed rule change, the Exchange has made the
following representations:
    1. The Exchange has appropriate rules to facilitate transactions in
this type of security in all trading sessions.
    2. The Exchange's surveillance procedures are adequate to properly
monitor the trading of the Shares on the Exchange.
    3. The Exchange will inform its ETP Holders in an Information
Bulletin of the special characteristics and risks associated with
trading the Shares.
    4. The Exchange will require its ETP Holders to deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction and will note this
prospectus delivery requirement in the Information Bulletin.
    5. The Exchange will cease trading the Shares of a Fund if: (a) the
listing market stops trading the Shares because of a regulatory halt
similar to a halt based on NYSE Arca Equities Rule 7.12 or a halt
because the IOPV or the value of the applicable Underlying Index is no
longer available; or (b) the listing market delists the Shares.
    This approval order is conditioned on the Exchange's adherence to
these representations.
    The Commission finds good cause for approving this proposed rule
change before the thirtieth day after the publication of notice thereof
in the Federal Register. As noted above, the Commission previously
found that the listing and trading of these Shares on the Amex is
consistent with the Act.\34\ The Commission presently is not aware of
any issue that would cause it to revisit that earlier finding or
preclude the trading of these funds on the Exchange pursuant to UTP.
Therefore, accelerating approval of this proposed rule change should
benefit investors by creating, without undue delay, additional
competition in the market for these Shares.
---------------------------------------------------------------------------

    \34\ See Amex Order, supra note 4.

---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-NYSEArca-2006-64), is hereby approved
on an accelerated basis.\35\
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------

    \36\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-16952 Filed 10-12-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: March 14, 2008 (Volume 73, Number 51)]
[Rules and Regulations]
[Page 13759-13761]
[DOCID:fr14mr08-7]

-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[USCG-2008-0103]
RIN 1625-AA87

Security Zone; Cape Fear River, Wilmington, NC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard will establish a temporary security zone on
the waters of the Cape Fear River off the North Carolina State Port
Authority facilities, Wilmington, North Carolina during the USS NORTH
CAROLINA Commissioning ceremony. The security zone is necessary to
provide for the security of the USS NORTH CAROLINA and the safety of
life of event participants, spectators and mariners on U.S. navigable
waters during the event. Entry into the zone is prohibited unless
authorized by the Captain of the Port or a designated representative.

DATES: This rule is effective from 8 a.m. on May 3, 2008, through 1
p.m. May 3, 2008.

ADDRESSES: Documents indicated in this preamble as being available in
the docket are part of docket USCG-2008-0103 and are available online
at http://www.regulations.gov. This material is also available for
inspection or copying at two locations: The Docket Management Facility
(M-30), U.S. Department of Transportation, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays and the United States Coast Guard Marine Safety Unit, 721
Medical Center Drive, Suite 100, Wilmington, North Carolina 28401
between 8 a.m. and 4 p.m., Monday through Friday, except Federal
holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning this
rule, phone CWO4 Stephen Lyons, Waterways Management Division Chief,
Sector North Carolina, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Regulatory Information

    We did not publish a notice of proposed rulemaking (NPRM) for this
regulation. The USS NORTH CAROLINA will be the subject of an official
United States Navy commissioning ceremony, a military function within
the meaning of 5 U.S.C. 553(a)(1), and as such the Coast Guard will not
conduct a notice and comment period for this regulation. Safely and
securely navigating the narrow Cape Fear River will prove challenging
with a submarine in the water. This regulation is necessary to protect
the public, the christening event's attendees, and to secure the
submarine.

Background and Purpose

    This security zone is part of a comprehensive port security regime
designed to safeguard human life, vessels, and waterfront facilities.
    The Navy will conduct the USS NORTH CAROLINA's Commissioning
ceremony at the North Carolina State Port Wilmington, North Carolina.
To address the aforementioned security concerns, the Captain of the
Port, Cape Fear River is establishing a security zone upon certain
waters of the Cape Fear River. This security zone will prevent vessels
or persons from engaging in waterborne terrorist actions during the USS
NORTH CAROLINA's Commissioning ceremony. A security zone is prudent for
this type of event.

Discussion of Rule

    On Saturday May 3, 2008, the USS NORTH CAROLINA's Commissioning
ceremony will be held at North Carolina State Port. The security zone
is required from 8 a.m. through 1 p.m. on May 3, 2008 to safeguard the
USS NORTH CAROLINA and event participants during the commissioning
ceremony. The security zone will encompass the waters of the Cape Fear
River from \1/2\ nautical mile south of the North Carolina State Port
Wilmington, North Carolina to \1/2\ nautical mile north of the North
Carolina State Port Wilmington, North Carolina. U.S. Coast Guard patrol
vessels will be on scene to control the movement of persons and vessels
in the security zone.
    No person or vessel may enter or remain in the security zone at any
time without the permission of the Captain of the Port, Cape Fear
River. Each person or vessel operating within the security zone will
obey any direction or order of the Captain of the Port, Cape Fear
River. The Captain of the Port may take possession and control of any
vessel in a security zone and/or remove any person, vessel, article or
thing from this security zone.
    Persons desiring to transit the area of the security zone may
contact the Captain of the Port via the Sector North Carolina Command
Center via telephone at<PHONE_NUMBER> or on VHF channel 16 (156.8 MHz)
to seek permission to transit the area. If permission is granted, all
persons and vessels must comply with the instructions of the Captain of
the Port, Cape Fear River or a designated representative.

Regulatory Evaluation

    This rule is not a ``significant regulatory action'' under section
3(f) of Executive Order 12866, Regulatory Planning and Review, and does
not require an assessment of potential costs and benefits under section
6(a)(3) of that Order. The Office of Management and Budget has not
reviewed it under that Order.
    We expect the economic impact of this proposed rule to be so
minimal that a full Regulatory Evaluation is unnecessary. Although this
regulation restricts access to certain waters of the Cape Fear River,
the effect of this regulation will not be significant because: (i) The
Captain of the Port or a representative may authorize access to the
security zone, (ii) the security zone will be enforced for limited
duration, and (iii) the Coast Guard will make notifications via
maritime advisories so mariners can adjust their plans accordingly.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. The term ``small entities''
comprises small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with populations of less than 50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact on a substantial number of small
entities.
    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. The term ``small entities''
comprises small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with populations of less than 50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
would not have a significant economic impact on a substantial number of
small entities.
    This rule would affect the following entities, some of which might
be small entities: The owners or operators of vessels intending to
transit or anchor on certain waters of the Cape Fear River.

    This security zone will not have a significant economic impact on a
substantial number of small entities for the following reasons.
Although the security zone will apply to certain waters of the Cape
Fear River, traffic will be allowed to pass through the zone with the
permission of the Captain of the Port or a designated representative.
The duration of the security zone will be limited to five hours. Before
the effective period, we will issue maritime advisories widely
available to users of the river.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking process.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this rule under
that Order and have determined that it does not have implications for
federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 or more in any
one year. Though this rule will not result in such an expenditure, we
do discuss the effects of this rule elsewhere in this preamble.

Taking of Private Property

    This rule will not effect a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through the Office of Management and Budget, with an explanation of why
using these standards would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) that are developed or adopted by voluntary consensus
standards bodies.
    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

Environment

    We have analyzed this rule under Commandant Instruction M16475.lD
which guides the Coast Guard in complying with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and
have concluded that there are no factors in this case that would limit
the use of a categorical exclusion under section 2.B.2 of the
Instruction. Therefore, this rule is categorically excluded under
figure 2-1, paragraph (34)(g) of the Instruction from further
environmental documentation. A final ``Environmental Analysis Check
List'' and a final ``Categorical Exclusion Determination'' are
available in the docket where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

Words of Issuance and Proposed Regulatory Text

0
For the reasons discussed in the preamble, the Coast Guard amends 33
CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50
U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L.
107-295, 116 Stat. 2064; Department of Homeland Security Delegation
No. 0170.1.

0
2. Add temporary Sec.  165.T05-011 to read as follows:

Sec.  165.T05-011  Security Zone; Cape Fear River, Wilmington, North
Carolina.

    (a) Location. The following area is a security zone: The waters of
the Cape Fear River, from surface to bottom,

encompassed by a line connecting the following points, beginning at
34[deg]10'56'' N, 077[deg]57'18'' W; thence west to position
34[deg]10'56'' N, 077[deg]57'30'' W; thence north along the western
edge of the Cape Fear River to position 34[deg]12'53'' N,
077[deg]57'36'' W; thence east to position 34[deg]12'53'' N,
077[deg]57'18'' W; thence south along the eastern edge of the Cape Fear
River to the starting point. These coordinates are based upon NAD 1983.
    (b) Definitions. As used in this section, for purposes of enforcing
the security zone identified in paragraph (a) of this section,
designated representative means Coast Guard Patrol Commanders including
Coast Guard coxswains, petty officers and other officers operating
Coast Guard vessels, and federal, state, and local officers designated
by the Captain of the Port Cape Fear.
    (c) Regulations. (1) Under general regulations in Sec.  165.33,
entry into, anchoring, mooring, or transiting this zone by persons or
vessels is prohibited without the prior permission of the Captain of
the Port Cape Fear River or a designated representative.
    (2) U.S. Coast Guard patrol vessels will be on scene to control the
movement of persons and vessels in the security zone.
    (3) No person or vessel may enter or remain in the security zone at
any time without the permission of the Captain of the Port, Cape Fear
River. Each person or vessel operating within the security zone must
obey any direction or order of the Captain of the Port, Cape Fear
River. The Captain of the Port may take possession and control of any
vessel in a security zone and/or remove any person, vessel, article or
thing from this security zone.
    (4) Persons desiring to transit the area of the security zone may
contact the Captain of the Port via the Sector North Carolina Command
Center via telephone at<PHONE_NUMBER> or on VHF channel 16 (156.8 MHz)
to seek permission to transit the area. If permission is granted, all
persons and vessels must comply with the instructions of the Captain of
the Port, Cape Fear River or a designated representative.
    (d) Effective period. This section is effective on May 3, 2008 from
8 a.m. through 1 p.m.

    Dated: February 25, 2008.
J.P. Nadeau,
Commander, U.S. Coast Guard, Captain of the Port, Cape Fear River.
 [FR Doc. E8-5125 Filed 3-13-08; 8:45 am]

BILLING CODE 4910-15-P


[Federal Register Volume 78, Number 183 (Friday, September 20, 2013)]
[Notices]
[Pages 57913-57916]
[FR Doc No: 2013-22911]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70416; File No. SR-Phlx-2013-92]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Pricing Schedule Sections II and IV

September 16, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 3, 2013, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Pricing Schedule by waiving the
Broker-Dealer Floor Options Transaction Charge (including the Cabinet
Options Transaction Charge) as well as the Broker-Dealer FLEX
transaction fee, for members executing facilitation orders pursuant to
Exchange Rule 1064 when such members would otherwise incur these
charges or this fee for trading in their own proprietary account contra
to a Customer (a ``BD-Customer Facilitation'') if the member's BD-
Customer Facilitation average daily volume (including both FLEX and
non-FLEX transactions) exceeds 10,000 contracts per day in a given
month.

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 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 IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend the Exchange's
Pricing Schedule with respect to certain pricing in Section II entitled
``Multiply Listed Options Fees,'' and in Section IV.B, entitled FLEX
Transaction Fees, in the case of BD-Customer Facilitations as described
below.
Broker-Dealer Floor Options Transaction Charges \3\
---------------------------------------------------------------------------

    \3\ The Broker-Dealer Floor Options Transaction Charge and Firm
Floor Options Transaction Charge in this discussion include the
Cabinet Options Transaction Charge.
---------------------------------------------------------------------------

    The Exchange currently assesses Broker-Dealer Floor Options
Transaction Charges \4\ of $0.25 per contract for both Penny Pilot and
non-Penny Pilot options. Similarly, the Exchange assesses Firm Floor
Options Transaction Charges \5\ of $0.25 per contract for both Penny
Pilot and non-Penny Pilot options, but it waives these charges for
members executing facilitation orders pursuant to Exchange Rule 1064
when such members are trading in their own proprietary account.\6\ The
Exchange is now proposing to also waive the Broker-Dealer Floor Options
Transaction Charge for members executing BD-Customer Facilitations if
the member's BD-Customer Facilitation average daily volume exceeds
10,000 contracts per day (the ``Minimum ADV'') in a given month
(including both FLEX and non-FLEX transactions) when such members are
trading in their own proprietary account.
---------------------------------------------------------------------------

    \4\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
    \5\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at OCC. The waiver does not apply to orders where a
member is acting as agent on behalf of a non-member.
    \6\ See Exchange Rule 1064 entitled ``Crossing, Facilitation and
Solicited Orders.'' A facilitation occurs when a floor broker holds
an options order for a public customer and a contra-side order for
the same option series and, after providing an opportunity for all
persons in the trading crowd to participate in the transaction,
executes both orders as a facilitation cross. The Exchange's waiver
of the Firm Floor Options Transaction Charges includes Cabinet
Option Transaction Charges.
---------------------------------------------------------------------------

    On occasion, a Broker-Dealer will facilitate orders on behalf of
its Customers.\7\ The Broker-Dealer places both the Customer order and
the Broker-Dealer's order with a floor broker for execution in open
outcry. The Exchange believes that a transaction in which a Broker-
Dealer facilitates a Customer order should be treated in the same
manner as a Firm facilitation transaction. To qualify for the free
execution, the Broker-Dealer and the Customer must have the same Phlx
house account number on both the buy and sell side of the transaction.
This is the same treatment that applies to

pricing applicable to Firm Floor Options Transaction Charges for
members executing facilitation orders when such members are trading in
their own proprietary account.\8\
---------------------------------------------------------------------------

    \7\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at The Options Clearing Corporation (``OCC'') which
is not for the account of broker or dealer or for the account of a
``Professional'' (as that term is defined in Rule 1000(b)(14)).
    \8\ As noted above, Firm Floor Options Transaction Charges are
waived for members executing facilitation orders pursuant to
Exchange Rule 1064 when such members are trading in their own
proprietary account (including Cabinet Options Transaction Charges).
---------------------------------------------------------------------------

FLEX Transaction Fees
    The Exchange currently assesses Firm FLEX Transaction Fees of $0.15
per contract as well as Broker-Dealer FLEX Transaction Fees, also $0.15
per contract, for FLEX transactions in multiple listed options. The
Exchange waives the Firm FLEX Transaction Fee for members executing
facilitation orders pursuant to Exchange Rule 1064 when such members
are trading in their own proprietary account. The Exchange is now
proposing to waive the Broker-Dealer FLEX Transaction Fee as well for
BD-Customer Facilitations, if the member's BD-Customer Facilitation
average daily volume (including both FLEX and non-FLEX transactions)
exceeds the Minimum ADV.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \9\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \10\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that not charging a member the Broker-Dealer
Floor Options Transaction Charge for transactions in which it
facilitates a Customer order, provided it meets the Minimum ADV, is
reasonable because it will encourage the member to facilitate Customer
orders and increase participation in open outcry, which will in turn
promote liquidity on the Exchange. Customer order flow brings unique
benefits to the market which benefits all market participants through
increased liquidity. In addition, the proposed rule change is
reasonable, equitable, and not unfairly discriminatory because Broker-
Dealers facilitating Customer orders are performing essentially the
same business as Firm facilitation orders.
    The Exchange believes that not charging a member the Broker-Dealer
Floor Options Transaction Charge for transactions in which it
facilitates a Customer order, provided it meets the Minimum ADV, is
equitable and not unfairly discriminatory because Broker-Dealers will
continue to be assessed a higher fee than a Customer who pays no fee to
transact Floor Penny Pilot or Non-Penny Pilot Options. Broker-Dealers
will continue to be assessed higher fees than Specialists and Market
Makers in Floor Penny Pilot Options and Non-Penny Pilot Options \11\
because Specialists and Market Makers have obligations to the market
and regulatory requirements, which normally do not apply to other
market participants. They have obligations to make continuous markets,
engage in a course of dealings reasonably calculated to contribute to
the maintenance of a fair and orderly market, and not make bids or
offers or enter into transactions that are inconsistent with a course
of dealings. The proposed differentiation as between Customers,
Specialists and Market Makers and other market participants recognizes
the differing contributions made to the liquidity and trading
environment on the Exchange by these market participants, as well as
the differing mix of orders entered. Broker-Dealers, Firms and
Professionals \12\ today all pay a $0.25 per contract Floor Penny Pilot
and Non-Penny Pilot Options Transaction Charge. Professionals have
access to more information and technological advantages as compared to
Customers and Professionals do not bear the obligations of Specialists
or Market Makers. Also, Professionals engage in trading activity
similar to that conducted by Specialists or Market Makers. For example,
Professionals continue to join bids and offers on the Exchange and thus
compete for incoming order flow. For these reasons, the Exchange
assesses Professionals the same Floor Options Transaction Charges as
Firms and Broker-Dealers. Today, the Firm Floor Options Transaction
Charge of $0.25 per contract for both Penny Pilot and Non-Penny Pilot
options, is waived for members executing facilitation orders pursuant
to Exchange Rule 1064 when such members are trading in their own
proprietary account. The Exchange proposes to waive the Broker-Dealer
Floor Options Transaction Charge of $0.25 per contract for both Penny
Pilot and Non-Penny Pilot options for transactions in which it
facilitates a Customer order, provided it meets the Minimum ADV. The
Exchange believes this proposal narrows the current rate differentials
between a Broker-Dealer and a Firm, where a Firm is entitled to a
waiver today because the Exchange would waive the Broker-Dealer Floor
Options Transaction Charge for members executing BD-Customer
Facilitations if the member's BD-Customer Facilitation average daily
volume exceeds 10,000 contracts per day in a given month. Offering
Broker-Dealers and Firms such a waiver while not offering the waiver to
Professionals is not unfairly discriminatory because unlike Firms and
Broker-Dealers, Professionals do not facilitate orders as described in
this proposal.
---------------------------------------------------------------------------

    \11\ Specialists and Market Makers are assessed Floor Penny
Pilot and Non-Penny Pilot Options Transaction Charges of $0.25 per
contract.
    \12\ The term ``professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Rule
1000(b)(14).
---------------------------------------------------------------------------

    The Exchange believes that waiving the Broker-Dealer Floor Options
Transaction Charge for members executing BD-Customer Facilitations if
the member's BD-Customer Facilitation average daily volume exceeds
10,000 contracts per day in a given month as compared to the electronic
Options Transaction Charges in both Penny Pilot and Non-Penny Pilot
options is reasonable, equitable and not unfairly discriminatory
because these fees recognize the distinction between the floor order
entry model and the electronic model and the proposed fees respond to
competition along the same lines.\13\ Floor participants incur costs
associated with accessing the floor, i.e. need for a floor broker, and
other costs which are not born by electronic members. Today, the
Exchange assesses different fees for electronic as compared to floor
transactions for Professionals, Specialists \14\ and Market Makers,\15\
Broker-Dealers and Firms in Section II of the Pricing Schedule.
---------------------------------------------------------------------------

    \13\ A transaction resulting from an order that was
electronically delivered utilizes Phlx XL. See Exchange Rules 1014
and 1080. Electronically delivered orders do not include orders
transacted on the Exchange floor. A transaction resulting from an
order that is non-electronically-delivered is represented on the
trading floor by a floor broker. See Exchange Rule 1063. All orders
will be either electronically or non-electronically delivered.
    \14\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a).
    \15\ A ``market maker'' includes Registered Options Traders
(Rule 1014(b)(i) and (ii)), which includes Streaming Quote Traders
(see Rule 1014(b)(ii)(A)) and Remote Streaming Quote Traders (see
Rule 1014(b)(ii)(B)). Directed Participants are also market makers.
---------------------------------------------------------------------------

    The Exchange further believes the 10,000 contract minimum is
reasonable, equitable, and not unfairly discriminatory because tiers
are not novel and are applicable for different participants. For
example, Firm electronic Options Transaction Charges in Penny Pilot and
non-Penny Pilot

Options will be reduced to $0.17 per contract for a given month
provided that a Firm has volume greater than 500,000 electronically-
delivered contracts in a month (``Electronic Firm Fee Discount''). The
Electronic Firm Fee Discount will apply per member organization when
such members are trading in their own proprietary account. The Exchange
believes the proposed Minimum ADV is a reasonable and achievable
standard for all members classified as Broker-Dealer, whereas a similar
threshold was not needed for Firm because of the competitive
environment in which the Exchange operates.
    The Exchange is waiving the Cabinet Options Transactions Charges
for BD-Customer Facilitations because Cabinet Options Transactions
Charges are also waived under the existing waiver applicable to Firm
facilitations, in those cases where Cabinet Options Transactions
Charges apply in lieu of the Floor Options Transaction Charges. The
Exchange believes that waiving the Broker-Dealer FLEX Transaction Fee
for transactions in which a member facilitates a Customer order,
provided it meets the Minimum ADV, is reasonable because it will
encourage the member to facilitate Customer orders. Customer order flow
brings liquidity to the Exchange. The Exchange believes that waiving
the Broker-Dealer FLEX Transaction Fee for transactions in which a
member facilitates a Customer order, provided it meets the Minimum ADV,
is equitable and not unfairly discriminatory because Customers are not
assessed a FLEX Transaction Fee. All other market participants are
assessed a $0.15 per contract FLEX Transaction Fee. Today, the Firm
FLEX Transaction Fee is waived for members executing facilitation
orders pursuant to Exchange Rule 1064 when such members are trading in
their own proprietary account. The Exchange proposes to waive the
Broker-Dealer FLEX Transaction Fee as well for BD-Customer
Facilitations, if the member's BD-Customer Facilitation average daily
volume (including both FLEX and non-FLEX transactions) exceeds the
Minimum ADV. This same treatment applies today to pricing applicable to
Firm Floor Options Transaction Charges for members executing
facilitation orders when such members are trading in their own
proprietary account. The Exchange believes that offering Broker-Dealers
the waiver of the FLEX Transaction Fee for facilitating a Customer
order, provided it meets the Minimum ADV, is would provide these market
participants, who also facilitate Customer orders and perform
essentially the same business as a Firm in terms of facilitation
orders, the opportunity to obtain the same waiver. The purpose of the
waiver is to encourage the member to facilitate Customer orders and
other market participants that are assessed a FLEX Transaction Fee,
such as Professionals, Specialists and Market Makers, to engage in such
activity.

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 not necessary or appropriate in
furtherance of the purposes of the Act, because the proposed fee
waivers would be available to any member with BD-Customer Facilitation
Trades meeting the Minimum ADV, and because they will incentivize
members to execute more such orders on the Exchange. To the extent that
this purpose is achieved, all of the Exchange's market participants
should benefit from the improved market liquidity.
    The Exchange operates in a highly competitive market, comprised of
eleven [sic] exchanges, in which market participants can easily and
readily direct Customer order flow to competing venues if they deem fee
levels at a particular venue to be excessive or rebates to be
inadequate. Accordingly, the fees that are assessed and the rebates
paid by the Exchange described in the above proposal are influenced by
these robust market forces and therefore must remain competitive with
fees charged and rebates paid by other venues and therefore must
continue to be reasonable and equitably allocated to those members that
opt to direct Customer orders to the Exchange rather than competing
venues.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\16\
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or 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 email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2013-92 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.

9All submissions should refer to File Number SR-Phlx-2013-92. 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 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
10:00 a.m. and 3:00 p.m. Copies of the 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-Phlx-

2013-92 and should be submitted on or before October 11, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-22911 Filed 9-19-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: February 2, 2007 (Volume 72, Number 22)]
[Notices]
[Page 5043-5044]
[DOCID:fr02fe07-52]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP07-27-000]

Tuscarora Gas Transmission Company; Notice of Intent To Prepare
an Environmental Assessment for the Proposed Tuscarora 2008 Expansion
Project and Request for Comments on Environmental Issues

January 25, 2007.
    The staff of the Federal Energy Regulatory Commission (FERC or
Commission) will prepare an environmental assessment (EA) that will
discuss the environmental impacts of the Tuscarora 2008 Expansion
project, involving construction and operation of a compressor station
and appurtenances by Tuscarora Gas Transmission Company (Tuscarora).
    Tuscarora proposes to construct a new natural gas-fired compressor
station referred to as the Likely Compressor Station which would
consist of a single 5,731 horsepower gas turbine compressor package and
appurtenances in Modoc County, California. Tuscarora would also install
isolation and side valves on its mainline and a total of about 1,800
feet of suction and discharge pipeline to connect the compressor
station to the mainline. The general location of the project is shown
on the map attached as Appendix 1.\1\
---------------------------------------------------------------------------

    \1\ The appendix referenced in this notice is not being printed
in the Federal Register. Copies of the appendix (map) are available
from the Commission's Public Reference Room, 888 First Street, NE.,
Washington, DC 20426, or call<PHONE_NUMBER>. Copies of the appendix
will be sent to all those receiving this notice in the mail.
---------------------------------------------------------------------------

    The proposed project would permit the firm transportation of an
additional 40,000 dekatherms per day of natural gas to markets in
northern Nevada. Specifically, the project would enable Sierra Pacific
Power Company to fuel its 514-megawatt Tracy Combined Cycle Power Plant
which is currently under construction.
    The Likely Compressor Station would be located on a 21-acre parcel
of land owned by Tuscarora east of its mainline right-of-way. The
station would permanently occupy a 3.5-acre fenced and graveled area
which would be surrounded by a mix of undeveloped and agricultural
land. The closest town, Likely, is located about 3.5 miles away and the
closest residence is located about 3,500 feet south of the site. One
parcel of land managed by the Bureau of Land Management is located
within 0.25 mile northeast of the compressor station site.

The EA Process

    The National Environmental Policy Act (NEPA) requires the
Commission to take into account the environmental impacts that could
result from an action whenever it considers the issuance of a
Certificate of Public Convenience and Necessity. NEPA also requires us
to discover and address concerns the public may have about proposals.
This process is referred to as ``scoping''. The main goal of the
scoping process is to focus the analysis in the EA on the important
environmental issues. By this Notice of Intent, the Commission staff
requests public comments on the scope of the issues to address in the
EA. All comments received will be considered during the preparation of
the EA.
    The Commission's staff will prepare an EA that will describe the
potential environmental impacts that could result from construction and
operation of the proposed project under the general headings:
     Water resources, wetlands, and waterbodies.
     Vegetation and wildlife.
     Threatened and endangered species.
     Cultural resources.
     Geology and soils.
     Land use and residences.
     Air quality and noise.
     Reliability and safety.
    Our independent analysis of the issues will be presented in the EA.
We will also evaluate possible alternatives to the proposed project or
portions of the project, and make recommendations on how to lessen or
avoid impacts on the various resource areas.
    Depending on the comments received during the scoping process, the
EA may be published and mailed to federal, state, and local government
agencies; public interest groups; Native American tribes; interested
individuals; affected landowners, newspapers, libraries, and the
Commission's official service list for this proceeding. A 30-day
comment period will be allotted for review if the EA is published. We
will consider all comments submitted in any Commission Order that is
issued for the project.
    To ensure your comments are considered, please carefully follow the
instructions in the public participation section below.

Public Participation

    You can make a difference by providing us with your specific
comments or concerns about the project. By becoming a commenter, your
concerns will be addressed in the EA and considered by the Commission.
The more specific your comments, the more useful they will be.
Generally, comments are submitted regarding the potential environmental
effects, reasonable alternatives and measures to avoid or lessen
environmental impact.
    This notice and request for environmental comments is being sent to
affected landowners; federal, state and local government
representatives and agencies; environmental and public interest groups;
other interested parties in this proceeding; and local libraries and
newspapers. We encourage government representatives to notify their
constituents of this notice and to encourage their comments concerning
this proposed project.
    To ensure that your comments are properly recorded, please mail
them to our office on or before February 25, 2007. When filing comments
please:
     Send an original and two copies of your letter to: Magalie
R. Salas, Secretary, Federal Energy Regulatory Commission, 888 First
St., NE., Room 1A, Washington, DC 20426.
     Label one copy of the comments for the attention of Gas
Branch 2; DG2E; and Reference Docket No. CP07-27-000 on the original
and both copies.
    Please note that the Commission strongly encourages the electronic
filing (``eFiling'') of comments, interventions or protests to this
proceeding. Instructions on how to ``eFile'' comments can be found on
the Commission's Web site at http://www.ferc.gov under the ``Documents

and Filings'' link.

Becoming an Intervenor

    In addition to involvement in the EA scoping process, you may want
to become an official party to the proceeding known as an
``intervenor''. Intervenors play a more formal role in the process.
Among other things, intervenors have the right to receive copies of
case-related Commission documents and filings by other intervenors.
Likewise, each intervenor must send one electronic copy (using the
Commission's e-Filing system) or 14 paper copies of its filings to the
Secretary of the Commission and must send a copy of its filings to all
other parties on the Commission's service list for this proceeding. If
you want to become an intervenor you must file a motion to intervene
according to Rule 214 of the Commission's Rules of Practice and
Procedure (18 CFR 385.214). Only intervenors have the right to seek
rehearing of the Commission's decision.
    Affected landowners and parties with environmental concerns may be
granted intervenor status upon showing good cause by stating that they
have a clear and direct interest in this proceeding which would not be
adequately represented by any other parties. You do not need intervenor
status to have your environmental comments considered.

Environmental Mailing List

    This notice has been sent to all known individuals, organizations,
and government entities interested in and/or potentially affected by
the proposed Project. This includes all landowners who are potential
right-of-way grantors, whose property may be used temporarily for
project purposes, or who own homes within distances defined in the
Commission's regulations of certain aboveground facilities.

Additional Information

    Additional information about the project is available from the
Commission's Office of External Affairs at 1-866-208 FERC (3372) or on
the FERC Internet Web site (http://www.ferc.gov).

    To access information via the FERC Web site click on the
``eLibrary'' link then click on ``General Search'' and enter the docket
number excluding the last three digits in the Docket Number field. Be
sure you have selected an appropriate date range. The ``eLibrary'' link
provides access to the texts of formal documents issued by the
Commission such as orders, notices, and rulemakings. For assistance
with ``eLibrary'', please contact FERC Online Support at
<EMAIL_ADDRESS>or call toll free at 1-866-208-3676, or for

TTY, contact<PHONE_NUMBER>.
    In addition, the Commission now offers a free service called
eSubscription which allows you to keep track of all formal issuances
and submittals in specific dockets. This can reduce the amount of time
you spend researching proceedings by automatically providing you with
notification of these filings, document summaries and direct links to
the documents. Go to http://www.ferc.gov/esubscribenow.htm.

    Public meetings and/or site visits along with other Project related
information will be posted on the Commission's calendar located at
http: //http://www.ferc.gov/EventCalendar/EventsList.aspx.

Magalie R. Salas,
Secretary.
 [FR Doc. E7-1663 Filed 2-1-07; 8:45 am]

BILLING CODE 6717-01-P