[Federal Register: November 29, 2006 (Volume 71, Number 229)]
[Notices]
[Page 69104]
[DOCID:fr29no06-31]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

 [Docket No. RP07-10-001]

East Tennessee Natural Gas, LLC; Notice Of Supplemental Filing

November 21, 2006.
    Take notice that on November 15, 2006, East Tennessee Natural Gas,
LLC (East Tennessee) tendered for filing as part of its FERC Gas
Tariff, Third Revised Volume No. 1, Substitute First Revised Sheet No.
368, effective November 6, 2006.
    Any person desiring to protest this filing must file in accordance
with Rule 211 of the Commission's Rules of Practice and Procedure (18
CFR 385.211). Protests to this filing will be considered by the
Commission in determining the appropriate action to be taken, but will
not serve to make protestants parties to the proceeding. Such protests
must be filed in accordance with the provisions of Section 154.210 of
the Commission's regulations (18 CFR 154.210). Anyone filing a protest
must serve a copy of that document on all the parties to the
proceeding.
    The Commission encourages electronic submission of protests in lieu
of paper using the ``eFiling'' link at http://www.ferc.gov. Persons

unable to file electronically should submit an original and 14 copies
of the protest to the Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
[FR Doc. E6-20191 Filed 11-28-06; 8:45 am]

BILLING CODE 6717-01-P


changes, each foreign establishment required to register and list as
provided in Sec.  807.40(a) must, using the FDA electronic device
registration and listing system, submit the name, address, telephone
and fax numbers, email address, and registration number, if any has
been assigned, of each person who imports or offers for import the
establishment's devices into the United States. The term ``person who
imports or offers for import,'' which is defined in Sec.  807.3(y),
includes agents, brokers, or other parties used by the foreign
establishment to facilitate the import of its device into the United
States.
    (c) For each individual or organization identified by the foreign
establishment under paragraphs (a) and (b) of this section, the foreign
establishment must submit to FDA electronically the current FDA
premarket submission number and any other identifying information that
is known to the establishment for each device being imported or offered
for import by the named individuals or organizations.

    Dated: July 27, 2012.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2012-18764 Filed 8-1-12; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 87, Number 205 (Tuesday, October 25, 2022)]
[Notices]
[Pages 64506-64507]
[FR Doc No: 2022-23138]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4671-DR; Docket ID FEMA-2022-0001]

Puerto Rico; Amendment No. 6 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the Commonwealth of Puerto Rico (FEMA-4671-DR), dated September 21,
2022, and related determinations.

DATES: This amendment was issued September 26, 2022.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the Commonwealth of Puerto Rico is hereby amended to include the
following areas among those areas determined to have been adversely
affected by the event declared a major disaster by the President in his
declaration of September 21, 2022.

    The municipalities of Hatillo, Isabela, Las Mar[iacute]as, Moca,
and Rinc[oacute]n for Individual Assistance (already designated for
debris removal and emergency protective measures [Categories A and
B], including direct federal assistance, under the Public Assistance
program).

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance

(Presidentially Declared Disasters); 97.039, Hazard Mitigation
Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2022-23138 Filed 10-24-22; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 81, Number 16 (Tuesday, January 26, 2016)]
[Notices]
[Pages 4353-4358]
[FR Doc No: 2016-01393]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76937; File No. SR-NYSEArca-2016-09]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the Fees
for NYSE Arca BBO and NYSE Arca Trades

January 20, 2016.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on January 11, 2016, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the fees for NYSE Arca BBO and NYSE
Arca Trades to: (1) Establish a multiple data feed fee; (2) discontinue
fees relating to managed non-display; (3) modify the application of the
access fee; and (4) reduce the Enterprise Fee. The proposed rule change
is available on the Exchange's Web site at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend the fees for NYSE Arca BBO and NYSE
Arca Trades market data products,\4\ as set forth on the NYSE Arca
Equities Proprietary Market Data Fee Schedule (``Fee Schedule''). The
Exchange proposes to make the following fee changes effective January 4
[sic],\5\ 2016:
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    \4\ See Securities Exchange Act Release Nos. 62188 (May 27,
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23); 69315
(April 5, 2013), 78 FR 21668 (April 11, 2013) (SR-NYSEArca-2013-37)
(``2013 Non-Display Filing''); 70213 (Aug. 15, 2013), 78 FR 51796
(Aug. 21, 2013) (SR-NYSEArca-2013-81) (``2013 Arca BBO and Trades
Filing''); 73011 (Sept. 5, 2014), 79 FR 54315 (Sept. 11, 2014) (SR-
NYSEARCA-2014-93) (``2014 Non-Display Filing''); and 73998 (Jan. 6,
2015), 80 FR 1549 (Jan. 12, 2015) (SR-NYSEArca-2014-148) (``2015
NYSE Arca BBO and Trades Filing'').
    \5\ The Commission notes that, as stated in the Exhibit 5, the
proposed fee changes were effective as of January 11, 2016.
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     Establish a multiple data feed fee;
     Discontinue fees relating to managed non-display;
     Modify the application of the access fee; and
     Reduce the Enterprise Fee.
Multiple Data Feed Fee \6\
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    \6\ The text of footnote 5 in Exhibit 5 of this proposed rule
change was previously filed under a separate filing. See SR-
NYSEArca-2016-01 (Proposed Rule Change to Amend the Fees for NYSE
ArcaBook).
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    The Exchange proposes to establish a new monthly fee, the
``Multiple Data Feed Fee,'' that would apply to data recipients that
take a data feed for a market data product in more than two locations.
Data recipients taking NYSE Arca BBO or NYSE Arca Trades in more than
two locations would be charged $200 per additional location per product
per month. No new reporting would be required.\7\
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    \7\ Data vendors currently report a unique Vendor Account Number
for each location at which they provide a data feed to a data
recipient. The Exchange considers each Vendor Account Number a
location. For example, if a data recipient has five Vendor Account
Numbers, representing five locations, for the receipt of the NYSE
Arca BBO product, that data recipient will pay the Multiple Data
Feed fee with respect to three of the five locations.
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Managed Non-Display Fees
    Non-Display Use of NYSE Arca market data means accessing,
processing, or consuming NYSE Arca market data delivered via direct
and/or Redistributor \8\ data feeds for a purpose

other than in support of a data recipient's display usage or further
internal or external redistribution.\9\ Managed Non-Display Services
fees apply when a data recipient's non-display applications are hosted
by a Redistributor that has been approved for Managed Non-Display
Services.\10\ A Redistributor approved for Managed Non-Display Services
manages and controls the access to NYSE Arca BBO and NYSE Arca Trades
and does not allow for further internal distribution or external
redistribution of NYSE Arca BBO and NYSE Arca Trades by the data
recipients. A Redistributor approved for Managed Non-Display Services
is required to report to NYSE Arca on a monthly basis the data
recipients that are receiving NYSE Arca market data through the
Redistributor's managed non-display service and the real-time NYSE Arca
market data products that such data recipients are receiving through
such service. Recipients of data through Managed Non-Display Service
have no additional reporting requirements. Data recipients that receive
NYSE Arca BBO from an approved Redistributor of Managed Non-Display
Services are charged a Managed Non-Display Services Fee of $200 per
month, and data recipients that receive NYSE Arca Trades from an
approved Redistributor of Managed Non-Display Services are charged a
Managed Non-Display Services Fee of $800 per month. Data recipients
that receive NYSE Arca BBO and NYSE Arca Trades from an approved
Redistributor of Managed Non-Display Services are also charged an
Access Fee of $375 per month.\11\
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    \8\ ``Redistributor'' means a vendor or any other person that
provides an NYSE Arca data product to a data recipient or to any
system that a data recipient uses, irrespective of the means of
transmission or access.
    \9\ See e.g. 2014 Non-Display Filing, supra note 4.
    \10\ To be approved for Managed Non-Display Services, a
Redistributor must manage and control the access to NYSE Arca BBO
and NYSE Arca Trades for data recipients' non-display applications
and not allow for further internal distribution or external
redistribution of the information by data recipients. In addition,
the Redistributor is required to (a) host the data recipients' non-
display applications in equipment located in the Redistributor's
data center and/or hosted space/cage and (b) offer NYSE Arca BBO and
NYSE Arca Trades in the Redistributor's own messaging formats
(rather than using raw NYSE Arca message formats) by reformatting
and/or altering NYSE Arca BBO and NYSE Arca Trades prior to
retransmission without affecting the integrity of NYSE Arca BBO and
NYSE Arca Trades and without rendering NYSE Arca BBO and NYSE Arca
Trades inaccurate, unfair, uninformative, fictitious, misleading or
discriminatory.
    \11\ A single Managed Non-Display Access Fee applies for clients
receiving both NYSE Arca BBO and NYSE Arca Trades. The Exchange is
also proposing in this filing to modify this application of the
access fees. See ``Modification of the application of the access
fee,'' below.
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    The Exchange proposes to discontinue the fees related to Managed
Non-Display Services because of the limited number of Redistributors
that have qualified for Managed Non-Display Services and the
administrative burdens associated with the program in light of the
limited number of Redistributors that have qualified for Managed Non-
Display Services. As proposed, all data recipients currently using NYSE
Arca BBO and NYSE Arca Trades on a managed non-display basis would be
subject to the same access fee of $750 per month, and the same non-
display services fees,\12\ as other non-display data recipients.\13\
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    \12\ See Fee Schedule.
    \13\ In order to harmonize its approach to fees for its market
data products, the Exchange is simultaneously proposing to remove
fees related to Managed Non-Display Services for NYSE ArcaBook and
NYSE Arca Integrated Feed. See SR-NYSEArca-2016-01 and SR-NYSEArca-
2016-03.
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Modification of the Application of the Access Fee
    The Exchange proposes to modify the application of the access fees
for NYSE Arca BBO and NYSE Arca Trades.
    Each NYSE Arca BBO data feed recipient currently pays a monthly
$750 access fee for NYSE Arca BBO, and each NYSE Arca Trades data feed
recipient currently pays a monthly $750 access fee for NYSE Arca
Trades. A single access fee applies for data recipients receiving both
NYSE Arca BBO and NYSE Arca Trades.\14\ The Exchange proposes to amend
the access fees so that recipients of NYSE Arca BBO and NYSE Arca
Trades would be required to pay a separate access fees [sic] for NYSE
Arca BBO ($750 per month) and NYSE Arca Trades ($750 per month). This
change would have no impact on customers who receive only NYSE Arca BBO
or only NYSE Arca Trades.
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    \14\ See Securities Exchange Act Release No. 62188 (May 27,
2010), 75 FR 31484 (June 3, 2010) (SR-NYSEArca-2010-23).
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Reduction to Enterprise Fee
    The Exchange currently charges an enterprise fee of $175,000 per
month for an unlimited number of professional and non-professional
users for each of NYSE Arca BBO and NYSE Arca Trades. A single
Enterprise Fee applies for clients receiving both NYSE Arca BBO and
NYSE Arca Trades.\15\ The Exchange proposes to lower the enterprise fee
to $170,000 per month.
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    \15\ See 2013 NYSE Arca BBO and Trades Filing, supra note 4.
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    As an example, under the current fee structure for per user fees,
if a firm had 40,000 professional users who each received NYSE Arca
Trades at $4 per month and NYSE Arca BBO at $4 per month, then the firm
would pay $320,000 per month in professional user fees. However, under
the current pricing structure, the fees would be capped at $175,000 and
effective January, the fees would be capped at $170,000.
    Under the proposed enterprise fee, the firm would pay a flat fee of
$170,000 for an unlimited number of professional and non-professional
users for both products. As is the case currently, a data recipient
that pays the enterprise fee would not have to report the number of
such users on a monthly basis.\16\ However, every six months, a data
recipient must provide the Exchange with a count of the total number of
natural person users of each product, including both professional and
non-professional users.
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    \16\ Professional users currently are subject to a per display
device count. See 2015 NYSE Arca BBO and Trades Filing, supra note
4.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of section 6 of the Act,\17\ in general, and
sections 6(b)(4) and 6(b)(5) of the Act,\18\ in particular, in that it
provides an equitable allocation of reasonable fees among users and
recipients of the data and is not designed to permit unfair
discrimination among customers, issuers, and brokers.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(4), (5).
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    The fees are also equitable and not unfairly discriminatory because
they will apply to all data recipients that choose to subscribe to NYSE
Arca BBO and NYSE Arca Trades.
Multiple Data Feed Fee
    The Exchange believes that it is reasonable to require data
recipients to pay a modest additional fee for taking a data feed for a
market data product in more than two locations, because such data
recipients can derive substantial value from being able to consume the
product in as many locations as they want. In addition, there are
administrative burdens associated with tracking each location at which
a data recipient receives the product. The Multiple Data Feed Fee is
designed to encourage data recipients to better manage their requests
for additional data feeds and to monitor their usage of data feeds. The
proposed fee is designed to apply to data feeds received in more than
two locations so that each data recipient can have one primary and one
backup data location before having to pay a multiple data feed fee. The
Exchange notes that this pricing is consistent with similar pricing
adopted

in 2013 by the Consolidated Tape Association (``CTA'').\19\ The
Exchange also notes that the OPRA Plan imposes a similar charge of $100
per connection for circuit connections in addition to the primary and
backup connections.\20\
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    \19\ See Securities Exchange Act Release No. 70010 (July 19,
2013), 78 FR 44984 (July 25, 2013) (SR-CTA/CQ-2013-04).
    \20\ See ``Direct Access Fee,'' Options Price Reporting
Authority Fee Schedule Fee Schedule PRA [sic] Plan at http://www.opradata.com/pdf/fee_schedule.pdf.
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Managed Non-Display Fees
    The Exchange believes that it is reasonable to discontinue Managed
Non-Display Fees. As the Exchange noted in the 2013 Non-Display Filing,
the Exchange determined at that time that its fee structure, which was
then based primarily on counting both display and non-display devices,
was no longer appropriate in light of market and technology
developments. Since then, the Exchange also modified its approach to
display and non-display fees with changes to the fees as reflected in
the 2014 Non-Display Filing.\21\ Discontinuing the fees applicable to
Managed Non-Display as proposed reflects the Exchange's continuing
review and consideration of the application of non-display fees, and
would harmonize and simplify the application of Non-Display Use fees by
applying them consistently to all users. In particular, after further
experience with the application of non-display use fees, the Exchange
believes that it is more equitable and less discriminatory to
discontinue the distinction for Managed Non-Display services because
all data recipients using data on a non-display basis are using it in a
comparable way and should be subject to similar fees regardless of
whether or not they receive the data directly from the Exchange. The
Exchange believes that applying the same non-display fees to all data
recipients on the same basis better reflects the significant value of
non-display data to data recipients and eliminates what is effectively
a discount for certain data recipients, and as such is not unfairly
discriminatory. The Exchange believes that the non-display fees
directly and appropriately reflect the significant value of using non-
display data in a wide range of computer-automated functions relating
to both trading and non-trading activities and that the number and
range of these functions continue to grow through innovation and
technology developments.
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    \21\ See note 4, supra.
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Modifications to Access Fee
    The Exchange believes that it is reasonable to make the changes
proposed to the application of access fees for NYSE Arca BBO and NYSE
Arca Trades. The Exchange believes the proposed changes will make the
application of the access fees to each of the products so that an
access fee entitles a customer to receive, for the applicable product,
a data feed or feeds. Specifically, data recipients that take the NYSE
Arca BBO and/or NYSE Arca Trades products receive value from each
product they choose to take. A data recipient that chooses to take
multiple products (no recipient is required to take any of these
products, or any specific combination of them) uses each product in a
different way and therefore obtains different value from each. The
Exchange believes that each product has a separate and distinct value
that is appropriate to reflect in a separate access fee. Finally, the
requirement to pay separate access fees for each market data product is
equitable and not unfairly discriminatory because it would apply to all
data recipients and appropriately reflects the value of each product to
those who choose to use them.
Reduction to Enterprise Fee
    The proposed enterprise fees for NYSE Arca BBO and NYSE Arca Trades
are reasonable because they could result in a fee reduction for data
recipients with a large number of professional and nonprofessional
users, as described in the example above. If a data recipient has a
smaller number of professional users of NYSE Arca BBO and/or NYSE Arca
Trades, then it may continue to use the per user fee structure. By
reducing prices for data recipients with a large number of professional
and non-professional users, the Exchange believes that more data
recipients may choose to offer NYSE Arca BBO and NYSE Arca Trades,
thereby expanding the distribution of this market data for the benefit
of investors. The Exchange also believes that offering an enterprise
fee expands the range of options for offering NYSE Arca BBO and NYSE
Arca Trades and allows data recipients greater choice in selecting the
most appropriate level of data and fees for the professional and non-
professional users they are servicing.
    The Exchange notes that NYSE Arca BBO and NYSE Arca Trades are
entirely optional. The Exchange is not required to make NYSE Arca BBO
and NYSE Arca Trades available or to offer any specific pricing
alternatives to any customers, nor is any firm required to purchase
NYSE Arca BBO and NYSE Arca Trades. Firms that do purchase NYSE Arca
BBO and NYSE Arca Trades do so for the primary goals of using them to
increase revenues, reduce expenses, and in some instances compete
directly with the Exchange (including for order flow); those firms are
able to determine for themselves whether NYSE Arca BBO and NYSE Arca
Trades or any other similar products are attractively priced or
not.\22\
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    \22\ See, e.g., Proposing Release on Regulation of NMS Stock
Alternative Trading Systems, Securities Exchange Act Release No.
76474 (Nov. 18, 2015) (File No. S7-23-15). See also, ``Brokers
Warned Not to Steer Clients' Stock Trades Into Slow Lane,''
Bloomberg Business, December 14, 2015 (Sigma X dark pool to use
direct exchange feeds as the primary source of price data).
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    Firms that do not wish to purchase NYSE Arca BBO and NYSE Arca
Trades at the new prices have a variety of alternative market data
products from which to choose,\23\ or if NYSE Arca BBO and NYSE Arca
Trades do not provide sufficient value to firms as offered based on the
uses those firms have or planned to make of them, such firms may simply
choose to conduct their business operations in ways that do not use
NYSE Arca BBO and NYSE Arca Trades or use them at different levels or
in different configurations. The Exchange notes that broker-dealers are
not required to purchase proprietary market data to comply with their
best execution obligations.\24\
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    \23\ See NASDAQ Rule 7047 (Nasdaq Basic) and BATS Rule 11.22
(BATS TOP and Last Sale).
    \24\ See FINRA Regulatory Notice 15-46, ``Best Execution,''
November 2015.
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    The decision of the United States Court of Appeals for the District
of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
2010), upheld reliance by the Securities and Exchange Commission
(``Commission'') upon the existence of competitive market mechanisms to
set reasonable and equitably allocated fees for proprietary market
data:
    In fact, the legislative history indicates that the Congress
intended that the market system `evolve through the interplay of
competitive forces as unnecessary regulatory restrictions are removed'
and that the SEC wield its regulatory power `in those situations where
competition may not be sufficient,' such as in the creation of a
`consolidated transactional reporting system.'
    Id. at 535 (quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted
in 1975 U.S.C.C.A.N. 323). The court agreed with the Commission's
conclusion that ``Congress intended that `competitive forces should
dictate the services and practices that constitute the U.S.

national market system for trading equity securities.' '' \25\
---------------------------------------------------------------------------

    \25\ NetCoalition, 615 F.3d at 535.
---------------------------------------------------------------------------

    As explained below in the Exchange's Statement on Burden on
Competition, the Exchange believes that there is substantial evidence
of competition in the marketplace for proprietary market data and that
the Commission can rely upon such evidence in concluding that the fees
established in this filing are the product of competition and therefore
satisfy the relevant statutory standards. In addition, the existence of
alternatives to these data products, such as consolidated data and
proprietary data from other sources, as described below, further
ensures that the Exchange cannot set unreasonable fees, or fees that
are unreasonably discriminatory, when vendors and subscribers can
select such alternatives.
    As the NetCoalition decision noted, the Commission is not required
to undertake a cost-of-service or ratemaking approach. The Exchange
believes that, even if it were possible as a matter of economic theory,
cost-based pricing for proprietary market data would be so complicated
that it could not be done practically or offer any significant
benefits.\26\
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    \26\ The Exchange believes that cost-based pricing would be
impractical because it would create enormous administrative burdens
for all parties and the Commission to cost-regulate a large number
of participants and standardize and analyze extraordinary amounts of
information, accounts, and reports. In addition, and as described
below, it is impossible to regulate market data prices in isolation
from prices charged by markets for other services that are joint
products. Cost-based rate regulation would also lead to litigation
and may distort incentives, including those to minimize costs and to
innovate, leading to further waste. Under cost-based pricing, the
Commission would be burdened with determining a fair rate of return,
and the industry could experience frequent rate increases based on
escalating expense levels. Even in industries historically subject
to utility regulation, cost-based ratemaking has been discredited.
As such, the Exchange believes that cost-based ratemaking would be
inappropriate for proprietary market data and inconsistent with
Congress's direction that the Commission use its authority to foster
the development of the national market system, and that market
forces will continue to provide appropriate pricing discipline. See
Appendix C to NYSE's comments to the Commission's 2000 Concept
Release on the Regulation of Market Information Fees and Revenues,
which can be found on the Commission's Web site at http://www.sec.gov/rules/concept/s72899/buck1.htm.
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    For these reasons, the Exchange believes that the proposed fees are
reasonable, equitable, and not unfairly discriminatory.

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. An exchange's ability to
price its proprietary market data feed products is constrained by
actual competition for the sale of proprietary market data products,
the joint product nature of exchange platforms, and the existence of
alternatives to the Exchange's proprietary data.
The Existence of Actual Competition
    The market for proprietary data products is currently competitive
and inherently contestable because there is fierce competition for the
inputs necessary for the creation of proprietary data and strict
pricing discipline for the proprietary products themselves. Numerous
exchanges compete with one another for listings and order flow and
sales of market data itself, providing ample opportunities for
entrepreneurs who wish to compete in any or all of those areas,
including producing and distributing their own market data. Proprietary
data products are produced and distributed by each individual exchange,
as well as other entities, in a vigorously competitive market. Indeed,
the U.S. Department of Justice (``DOJ'') (the primary antitrust
regulator) has expressly acknowledged the aggressive actual competition
among exchanges, including for the sale of proprietary market data. In
2011, the DOJ stated that exchanges ``compete head to head to offer
real-time equity data products. These data products include the best
bid and offer of every exchange and information on each equity trade,
including the last sale.'' \27\
---------------------------------------------------------------------------

    \27\ Press Release, U.S. Department of Justice, Assistant
Attorney General Christine Varney Holds Conference Call Regarding
NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. Abandoning
Their Bid for NYSE Euronext (May 16, 2011), available at http://www.justice.gov/iso/opa/atr/speeches/2011/at-speech-110516.html; see
also Complaint in U.S. v. Deutsche Borse AG and NYSE Euronext, Case
No. 11-cv-2280 (D.C. Dist.) ] 24 (``NYSE and Direct Edge compete
head-to-head . . . in the provision of real-time proprietary equity
data products.'').
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    Moreover, competitive markets for listings, order flow, executions,
and transaction reports provide pricing discipline for the inputs of
proprietary data products and therefore constrain markets from
overpricing proprietary market data. Broker-dealers send their order
flow and transaction reports to multiple venues, rather than providing
them all to a single venue, which in turn reinforces this competitive
constraint. As a 2010 Commission Concept Release noted, the ``current
market structure can be described as dispersed and complex'' with
``trading volume . . . dispersed among many highly automated trading
centers that compete for order flow in the same stocks'' and ``trading
centers offer[ing] a wide range of services that are designed to
attract different types of market participants with varying trading
needs.'' \28\ More recently, SEC Chair Mary Jo White has noted that
competition for order flow in exchange-listed equities is ``intense''
and divided among many trading venues, including exchanges, more than
40 alternative trading systems, and more than 250 broker-dealers.\29\
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    \28\ Concept Release on Equity Market Structure, Securities
Exchange Act Release No. 61358 (Jan. 14, 2010), 75 FR 3594 (Jan. 21,
2010) (File No. S7-02-10). This Concept Release included data from
the third quarter of 2009 showing that no market center traded more
than 20% of the volume of listed stocks, further evidencing the
dispersal of and competition for trading activity. Id. at 3598. Data
available on ArcaVision show that from June 30, 2013 to June 30,
2014, no exchange traded more than 12% of the volume of listed
stocks by either trade or dollar volume, further evidencing the
continued dispersal of and fierce competition for trading activity.
See https://www.arcavision.com/Arcavision/arcalogin.jsp.
    \29\ Mary Jo White, Enhancing Our Equity Market Structure,
Sandler O'Neill & Partners, L.P. Global Exchange and Brokerage
Conference (June 5, 2014) (available on the Commission Web site),
citing Tuttle, Laura, 2014, ``OTC Trading: Description of Non-ATS
OTC Trading in National Market System Stocks,'' at 7-8.
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    If an exchange succeeds in competing for quotations, order flow,
and trade executions, then it earns trading revenues and increases the
value of its proprietary market data products because they will contain
greater quote and trade information. Conversely, if an exchange is less
successful in attracting quotes, order flow, and trade executions, then
its market data products may be less desirable to customers in light of
the diminished content and data products offered by competing venues
may become more attractive. Thus, competition for quotations, order
flow, and trade executions puts significant pressure on an exchange to
maintain both execution and data fees at reasonable levels.
    In addition, in the case of products that are also redistributed
through market data vendors, such as Bloomberg and Thompson Reuters,
the vendors themselves provide additional price discipline for
proprietary data products because they control the primary means of
access to certain end users. These vendors impose price discipline
based upon their business models. For example, vendors that assess a
surcharge on data they sell are able to refuse to offer proprietary
products that their end users do not or will not purchase in sufficient
numbers. Vendors will not elect to make available NYSE Arca BBO or NYSE
Arca Trades unless their customers request it, and

customers will not elect to pay the proposed fees unless NYSE Arca BBO
and NYSE Arca Trades can provide value by sufficiently increasing
revenues or reducing costs in the customer's business in a manner that
will offset the fees. All of these factors operate as constraints on
pricing proprietary data products.
Joint Product Nature of Exchange Platform
    Transaction execution and proprietary data products are
complementary in that market data is both an input and a byproduct of
the execution service. In fact, proprietary market data and trade
executions are a paradigmatic example of joint products with joint
costs. The decision of whether and on which platform to post an order
will depend on the attributes of the platforms where the order can be
posted, including the execution fees, data availability and quality,
and price and distribution of data products. Without a platform to post
quotations, receive orders, and execute trades, exchange data products
would not exist.
    The costs of producing market data include not only the costs of
the data distribution infrastructure, but also the costs of designing,
maintaining, and operating the exchange's platform for posting quotes,
accepting orders, and executing transactions and the cost of regulating
the exchange to ensure its fair operation and maintain investor
confidence. The total return that a trading platform earns reflects the
revenues it receives from both products and the joint costs it incurs.
    Moreover, an exchange's broker-dealer customers generally view the
costs of transaction executions and market data as a unified cost of
doing business with the exchange. A broker-dealer will only choose to
direct orders to an exchange if the revenue from the transaction
exceeds its cost, including the cost of any market data that the
broker-dealer chooses to buy in support of its order routing and
trading decisions. If the costs of the transaction are not offset by
its value, then the broker-dealer may choose instead not to purchase
the product and trade away from that exchange. There is substantial
evidence of the strong correlation between order flow and market data
purchases. For example, in September 2015, more than 80% of the
transaction volume on each of NYSE Arca and NYSE Arca's affiliates New
York Stock Exchange LLC (``NYSE'') and NYSE MKT LLC (``NYSE MKT'') was
executed by market participants that purchased one or more proprietary
market data products (the 20 firms were not the same for each market).
A supra-competitive increase in the fees for either executions or
market data would create a risk of reducing an exchange's revenues from
both products.
    Other market participants have noted that proprietary market data
and trade executions are joint products of a joint platform and have
common costs.\30\ The Exchange agrees with and adopts those discussions
and the arguments therein. The Exchange also notes that the economics
literature confirms that there is no way to allocate common costs
between joint products that would shed any light on competitive or
efficient pricing.\31\
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    \30\ See Securities Exchange Act Release No. 72153 (May 12,
2014), 79 FR 28575, 28578 n.15 (May 16, 2014) (SR-NASDAQ-2014-045)
(``[A]ll of the exchange's costs are incurred for the unified
purposes of attracting order flow, executing and/or routing orders,
and generating and selling data about market activity. The total
return that an exchange earns reflects the revenues it receives from
the joint products and the total costs of the joint products.'').
See also Securities Exchange Act Release No. 62907 (Sept. 14, 2010),
75 FR 57314, 57317 (Sept. 20, 2010) (SR-NASDAQ-2010-110), and
Securities Exchange Act Release No. 62908 (Sept. 14, 2010), 75 FR
57321, 57324 (Sept. 20, 2010) (SR-NASDAQ-2010-111).
    \31\ See generally Mark Hirschey, Fundamentals of Managerial
Economics, at 600 (2009) (``It is important to note, however, that
although it is possible to determine the separate marginal costs of
goods produced in variable proportions, it is impossible to
determine their individual average costs. This is because common
costs are expenses necessary for manufacture of a joint product.
Common costs of production--raw material and equipment costs,
management expenses, and other overhead--cannot be allocated to each
individual by-product on any economically sound basis. . . . Any
allocation of common costs is wrong and arbitrary.''). This is not
new economic theory. See, e.g., F. W. Taussig, ``A Contribution to
the Theory of Railway Rates,'' Quarterly Journal of Economics V(4)
438, 465 (July 1891) (``Yet, surely, the division is purely
arbitrary. These items of cost, in fact, are jointly incurred for
both sorts of traffic; and I cannot share the hope entertained by
the statistician of the Commission, Professor Henry C. Adams, that
we shall ever reach a mode of apportionment that will lead to
trustworthy results.'').
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    Analyzing the cost of market data product production and
distribution in isolation from the cost of all of the inputs supporting
the creation of market data and market data products will inevitably
underestimate the cost of the data and data products because it is
impossible to obtain the data inputs to create market data products
without a fast, technologically robust, and well-regulated execution
system, and system and regulatory costs affect the price of both
obtaining the market data itself and creating and distributing market
data products. It would be equally misleading, however, to attribute
all of an exchange's costs to the market data portion of an exchange's
joint products. Rather, all of an exchange's costs are incurred for the
unified purposes of attracting order flow, executing and/or routing
orders, and generating and selling data about market activity. The
total return that an exchange earns reflects the revenues it receives
from the joint products and the total costs of the joint products.
    As noted above, the level of competition and contestability in the
market is evident in the numerous alternative venues that compete for
order flow, including 11 equities self-regulatory organization
(``SRO'') markets, as well as various forms of alternative trading
systems (``ATSs''), including dark pools and electronic communication
networks (``ECNs''), and internalizing broker-dealers. SRO markets
compete to attract order flow and produce transaction reports via trade
executions, and two FINRA-regulated Trade Reporting Facilities compete
to attract transaction reports from the non-SRO venues.
    Competition among trading platforms can be expected to constrain
the aggregate return that each platform earns from the sale of its
joint products, but different trading platforms may choose from a range
of possible, and equally reasonable, pricing strategies as the means of
recovering total costs. For example, some platforms may choose to pay
rebates to attract orders, charge relatively low prices for market data
products (or provide market data products free of charge), and charge
relatively high prices for accessing posted liquidity. Other platforms
may choose a strategy of paying lower rebates (or no rebates) to
attract orders, setting relatively high prices for market data
products, and setting relatively low prices for accessing posted
liquidity. For example, BATS Global Markets (``BATS'') and Direct Edge,
which previously operated as ATSs and obtained exchange status in 2008
and 2010, respectively, provided certain market data at no charge on
their Web sites in order to attract more order flow, and used revenue
rebates from resulting additional executions to maintain low execution
charges for their users.\32\ In this environment, there is no economic
basis for regulating maximum prices for one of the joint products in an
industry in which suppliers face competitive constraints with regard to
the joint offering.
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    \32\ This is simply a securities market-specific example of the
well-established principle that in certain circumstances more sales
at lower margins can be more profitable than fewer sales at higher
margins; this example is additional evidence that market data is an
inherent part of a market's joint platform.

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Existence of Alternatives
    The large number of SROs, ATSs, and internalizing broker-dealers
that currently produce proprietary data or are currently capable of
producing it provides further pricing discipline for proprietary data
products. Each SRO, ATS, and broker-dealer is currently permitted to
produce and sell proprietary data products, and many currently do,
including but not limited to the Exchange, NYSE, NYSE MKT, NASDAQ OMX,
BATS, and Direct Edge.
    The fact that proprietary data from ATSs, internalizing broker-
dealers, and vendors can bypass SROs is significant in two respects.
First, non-SROs can compete directly with SROs for the production and
sale of proprietary data products. By way of example, BATS and NYSE
Arca both published proprietary data on the Internet before registering
as exchanges. Second, because a single order or transaction report can
appear in an SRO proprietary product, a non-SRO proprietary product, or
both, the amount of data available via proprietary products is greater
in size than the actual number of orders and transaction reports that
exist in the marketplace. With respect to NYSE Arca BBO and NYSE Arca
Trades, competitors offer close substitute products.\33\ Because market
data users can find suitable substitutes for most proprietary market
data products, a market that overprices its market data products stands
a high risk that users may substitute another source of market data
information for its own.
---------------------------------------------------------------------------

    \33\ See supra note 23.
---------------------------------------------------------------------------

    Those competitive pressures imposed by available alternatives are
evident in the Exchange's proposed pricing.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid and inexpensive. The history
of electronic trading is replete with examples of entrants that swiftly
grew into some of the largest electronic trading platforms and
proprietary data producers: Archipelago, Bloomberg Tradebook, Island,
RediBook, Attain, TrackECN, BATS Trading and Direct Edge. As noted
above, BATS launched as an ATS in 2006 and became an exchange in 2008,
while Direct Edge began operations in 2007 and obtained exchange status
in 2010.
    In determining the proposed change to the fees for NYSE Arca BBO
and NYSE Arca Trades, the Exchange considered the competitiveness of
the market for proprietary data and all of the implications of that
competition. The Exchange believes that it has considered all relevant
factors and has not considered irrelevant factors in order to establish
fair, reasonable, and not unreasonably discriminatory fees and an
equitable allocation of fees among all users. The existence of numerous
alternatives to the Exchange's products, including proprietary data
from other sources, ensures that the Exchange cannot set unreasonable
fees, or fees that are unreasonably discriminatory, when vendors and
subscribers can elect these alternatives or choose not to purchase a
specific proprietary data product if the attendant fees are not
justified by the returns that any particular vendor or data recipient
would achieve through the purchase.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
section 19(b)(3)(A) \34\ of the Act and subparagraph (f)(2) of Rule
19b-4 \35\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78s(b)(3)(A).
    \35\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
section 19(b)(2)(B) \36\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEArca-2016-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2016-09. 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 will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions.
    You should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NYSEArca-2016-
09 and should be submitted on or before February 16, 2016.
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
Brent J. Fields,
Secretary.
[FR Doc. 2016-01393 Filed 1-25-16; 8:45 am]
BILLING CODE 8011-01-P


 [Federal Register: August 26, 2008 (Volume 73, Number 166)] [ Notices]                [Page 50382-50385] [DOCID:fr26au08-105]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58395; File No. SR-NYSEArca-2008-85]

  Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by NYSE Arca, Inc. Relating to Listing and Trading of

PowerShares Active U.S. Real Estate Fund

August 20, 2008.

    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of

1934 (the ``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is

hereby given that, on August 11, 2008, NYSE Arca, Inc. (``NYSE Arca''

or the ``Exchange'') filed with the Securities and Exchange Commission

(the ``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.

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    \1\ 15 U.S.C. 78s(b)(1).

    \2\ 15 U.S.C. 78a.

    \3\ 17 CFR 240.19b-4.

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

of the Proposed Rule Change

    NYSE Arca, through its wholly-owned subsidiary NYSE Arca Equities,

Inc. (``NYSE Arca Equities'' or the ``Corporation''), proposes to list

and trade the following under NYSE Arca Equities Rule 8.600 (``Managed

Fund Shares''): the PowerShares Active U.S. Real Estate Fund. The text

of the proposed rule change is available on the Exchange's Web site at

http://www.nyse.com, at the Exchange's principal office and at the

Commission's Public Reference Room.

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 parts of such

statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

1. Purpose

    The Exchange proposes to list and trade the following Managed Fund

Shares \4\ (``Shares'') under NYSE Arca Equities Rule 8.600: The

PowerShares Active U.S. Real Estate Fund (``Fund'').\5\ The Shares will

be offered by PowerShares Actively Managed Exchange-Traded Fund Trust

(the ``Trust''), a business trust organized under the laws of the State

of Delaware and registered with the Commission as an open-end

management investment company.\6\

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    \4\ A Managed Fund Share is a security that represents an

interest in an investment company registered under the Investment

Company Act of 1940 (15 U.S.C. 80a) (``1940 Act'') organized as an

open-end investment company or similar entity that invests in a

portfolio of securities selected by its investment adviser

consistent with its investment objectives and policies. In contrast,

an open-end investment company that issues Investment Company Units,

listed and traded on the Exchange under NYSE Arca Equities Rule

5.2(j)(3), seeks to provide investment results that correspond

generally to the price and yield performance of a specific foreign

or domestic stock index, fixed income securities index or

combination thereof.

    \5\ The Commission previously approved listing and trading on

the Exchange of the following PowerShares actively managed funds

under Rule 8.600: PowerShares Active AlphaQ Fund, the PowerShares

Active Alpha Multi-Cap Fund, the PowerShares Active Mega-Cap

Portfolio and the PowerShares Active Low Duration Portfolio. See

Securities Exchange Act Release No. 57619 (April 4, 2008), 73 FR

19544 (April 10, 2008) (SR-NYSEArca-2008-25).

    \6\ The Trust is registered under the 1940 Act. On June 26,

2008, the Trust filed with the Commission a Registration Statement

for the Fund on Form N-1A under the Securities Act of 1933, as

amended, (15 U.S.C. 77a), and under the 1940 Act relating to the

Fund (File Nos. 333-147622 and 811-22148) (``Registration

Statement''). The description of the operation of the Trust herein

is based on the Registration Statement.

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    The Shares will conform to the initial and continued listing

criteria under Rule 8.600. The Fund will not purchase or sell

securities in markets outside the U.S. The Exchange represents that,

for initial and/or continued listing, the Fund will be in compliance

with Rule 10A-3 \7\ under the Exchange Act, as provided by NYSE Arca

Equities Rule 5.3.

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    \7\ 17 CFR 240.10A-3.

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Description of the Fund

    Invesco PowerShares Capital Management LLC (the ``Adviser'') is the

investment adviser for the Fund and is registered as an ``investment

adviser'' under the Investment Advisers Act of 1940 (the ``Advisers

Act'').\8\ Invesco Institutional (N.A.), Inc. (``Invesco

Institutional'') is the Fund's primary investment sub-adviser and is

also registered as an ``investment adviser'' under the Advisers Act.

Invesco Aim Distributors, Inc. (the ``Distributor'') serves as the

principal underwriter and distributor for the Fund. The Adviser is

affiliated with the Distributor, a broker-dealer. As required by NYSE

Arca Equities Rule 8.600, Commentary .07, the Exchange represents that

the Adviser has implemented a ``fire wall'' with respect to such

broker-dealer regarding access to information concerning the

composition and/or changes to the Fund's portfolio.

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    \8\ 15 U.S.C. 80b-1. The Exchange represents that the Adviser

and its related personnel, are subject to Advisers Act Rule 204A-1.

This Rule specifically requires the adoption of a code of ethics by

an investment adviser to include, at a minimum: (i) Standards of

business conduct that reflect the firm's/personnel fiduciary

obligations; (ii) provisions requiring supervised persons to comply

with applicable federal securities laws; (iii) provisions that

require all access persons to report, and the firm to review, their

personal securities transactions and holdings periodically as

specifically set forth in Rule 204A-1; (iv) provisions requiring

supervised persons to report any violations of the code of ethics

promptly to the chief compliance officer (``CCO'') or, provided the

CCO also receives reports of all violations, to other persons

designated in the code of ethics; and (v) provisions requiring the

investment adviser to provide each of the supervised persons with a

copy of the code of ethics with an acknowledgement by said

supervised persons. In addition, Rule 206(4)-7 under the Advisers

Act makes it unlawful for an investment adviser to provide

investment advice to clients unless such investment adviser has (i)

Adopted and implemented written policies and procedures reasonably

designed to prevent violation, by the investment adviser and its

supervised persons, of the Advisers Act and the Commission rules

adopted thereunder; (ii) implemented, at a minimum, an annual review

regarding the adequacy of the policies and procedures established

pursuant to subparagraph (i) above and the effectiveness of their

implementation; and (iii) designated an individual (who is a

supervised person) responsible for administering the policies and

procedures adopted under subparagraph (i) above.

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    According to the Registration Statement, the Fund has an investment

objective of high total return through growth of capital and current

income. It seeks to achieve its investment objective by investing,

under normal market conditions, at least 80% of its assets in

securities of companies that are principally engaged in the U.S. real

estate industry. A company is considered to be principally engaged in

the U.S. real estate industry if (i) it derives 50% of its revenues or

profits from the ownership, leasing, construction, financing or sale of

U.S. real estate; or (ii) it has at least 50% of the value of its

assets invested in U.S. real estate. The Fund plans to invest

principally in equity real estate investment trusts (``REITs''). Equity

REITs pool investors'' funds for investments primarily in real estate

properties or real estate-related loans (such as mortgages). The Fund

may also invest in real estate operating companies (``REOCs''), as well

as securities of other companies principally engaged in the U.S. real

estate industry. REOCs are similar to REITs, except that REOCs reinvest

their earnings into the business, rather than distributing them to

unitholders like REITs. The 80% investment policy is non-fundamental

and requires 60 days' prior written notice to shareholders before it

can be changed.

    In constructing the portfolio, the sub-advisers (as described in

the Registration Statement) analyze quantitative and statistical

metrics to identify attractively priced securities. The security and

portfolio evaluation process is generally conducted monthly. The sub-

advisers will consider selling or reducing a security position if (i)

The relative attractiveness of a security falls below desired levels;

(ii) a particular security's risk/return profile changes significantly;

or (iii) a more attractive investment opportunity is identified.

    Creations and redemptions of Shares occur in large specified blocks

of Shares, referred to as ``Creation Units''. The Creation Unit size

for the Fund is 50,000 Shares.

    The NAV of the Fund will normally be determined as of the close of

the regular trading session on the NYSE (ordinarily 4 p.m. Eastern

Time) on each business day.

Availability of Information

    The Fund's Web site (http://www.powershares.com), which will be

publicly available prior to the public offering of Shares, will include

a form of the Prospectus for the Fund that may be downloaded. The Web

site will include additional quantitative information updated on a

daily basis, including, for the Fund, (1) daily trading volume, the

prior business day's reported closing price, NAV and mid-point of the

Bid/Ask spread at the time of calculation of such NAV (the ``Bid/Ask

Price''),\9\ and a calculation of the premium and discount of the Bid/

Ask Price against the NAV, and (2) data in chart format displaying the

frequency distribution of discounts and premiums of the daily Bid/Ask

Price against the NAV, within appropriate ranges, for each of the four

previous calendar quarters. On each business day, before commencement

of trading in Shares in the Core Trading Session on the Exchange, the

Fund will disclose on its

Web site the Disclosed Portfolio as defined in proposed Rule

8.600(c)(2) that will form the basis for the Fund's calculation of NAV

at the end of the business day.\10\ The Web site information will be

publicly available at no charge.

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    \9\ The Bid/Ask Price of the Fund is determined using the

highest bid and the lowest offer on the Exchange as of the time of

calculation of the Fund's NAV. The records relating to Bid/Ask

Prices will be retained by the Fund and their service providers.

    \10\ Under accounting procedures followed by the Fund, trades

made on the prior business day (``T'') will be booked and reflected

in NAV on the current business day (``T+1''). Accordingly, the Fund

will be able to disclose at the beginning of the business day the

portfolio that will form the basis for the NAV calculation at the

end of the business day.

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    Investors can also obtain the Trust's Statement of Additional

Information (``SAI''), the Fund's Shareholder Reports, and its Form N-

CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder

Reports are available free upon request from the Trust, and those

documents and the Form N-CSR and Form N-SAR may be viewed on-screen or

downloaded from the Commission's Web site at http://www.sec.gov.

    Information regarding market price and trading volume of the Shares

is and will be continually available on a real-time basis throughout

the day on brokers' computer screens and other electronic services.

Information regarding the previous day's closing price and trading

volume information will be published daily in the financial section of

newspapers. Quotation and last sale information for the Shares will be

available via the Consolidated Tape Association (``CTA'') high-speed

line. In addition, the Portfolio Indicative Value, as defined in NYSE

Arca Equities Rule 8.600(c)(3), will be disseminated by the Exchange at

least every 15 seconds during the Core Trading Session through the

facilities of CTA. The dissemination of the Portfolio Indicative Value,

together with the Disclosed Portfolio, will allow investors to

determine the value of the underlying portfolio of a Fund on a daily

basis and to provide a close estimate of that value throughout the

trading day.

    For more information regarding the Shares and the Fund, including

investment strategies, risks, creation and redemption procedures, fees,

portfolio holdings disclosure policies, distributions and taxes, see

the Registration Statement. All terms relating to the Fund that are

referred to, but not defined in, this proposed rule change are defined

in the Registration Statement.

Initial and Continued Listing Criteria

    The Fund will be subject to the initial and continued listing

criteria of NYSE Arca Equities Rule 8.600(d). The Exchange has

established that a minimum of 100,000 Shares will be required to be

outstanding at the time of commencement of trading on the Exchange. In

addition, the Exchange will obtain a representation from the Fund that

the NAV per Share will be calculated daily and that the NAV and the

Disclosed Portfolio will be made available to all market participants

at the same time.

Trading Halts

    With respect to trading halts, the Exchange may consider all

relevant factors in exercising its discretion to halt or suspend

trading in the Shares of the Fund.\11\ Trading in Shares of the Fund

will be halted if the circuit breaker parameters in NYSE Arca Equities

Rule 7.12 have been reached. Trading also 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 securities comprising

the Disclosed Portfolio and/or the Financial Instruments of the Fund;

or (2) whether other unusual conditions or circumstances detrimental to

the maintenance of a fair and orderly market are present. Trading in

the Shares will be subject to Rule 8.600(d)(2)(D), which sets forth

circumstances under which Shares of the Fund may be halted.

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    \11\ See NYSE Arca Equities Rule 7.12, Commentary .04.

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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 4 a.m. to 8 p.m. Eastern Time in

accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late

Trading Sessions). The Exchange has appropriate rules to facilitate

transactions in the Shares during all trading sessions. The minimum

trading increment for Shares on the Exchange will be $0.01.

Surveillance

    The Exchange intends to utilize its existing surveillance

procedures applicable to derivative products (which include Managed

Fund Shares) to monitor trading in the Shares. The Exchange represents

that these procedures are adequate to properly monitor Exchange trading

of the Shares in all trading sessions and to deter and detect

violations of Exchange rules and applicable federal securities laws.

    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.

    The Exchange may obtain information via the Intermarket

Surveillance Group (``ISG'') from other exchanges who are members of

the ISG.\12\ In addition, the Exchange also has a general policy

prohibiting the distribution of material, non-public information by its

employees.

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    \12\ For a list of the current members of ISG, see http://

www.isgportal.org.

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Information Bulletin

    Prior to the commencement of trading, the Exchange will inform its

ETP Holders in an Information Bulletin (``Bulletin'') of the special

characteristics and risks associated with trading the Shares.

Specifically, the Bulletin will discuss the following: (1) The

procedures for purchases and redemptions of Shares in Creation Unit

aggregations (and that Shares are not individually redeemable); (2)

NYSE Arca Equities Rule 9.2(a),\13\ 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) the risks involved in

trading the Shares during the Opening and Late Trading Sessions when an

updated Portfolio Indicative Value will not be calculated or publicly

disseminated; (4) how information regarding the Portfolio Indicative

Value is disseminated; (5) 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 (6) trading

information.

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    \13\ NYSE Arca Equities Rule 9.2(a) provides that an ETP Holder,

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

rule provides, with a limited exception, that prior to the execution

of a transaction recommended to a non-institutional customer, the

ETP Holder shall make reasonable efforts to obtain information

concerning the customer's financial status, tax status, investment

objectives, and any other information that the ETP Holder believes

would be useful to make a recommendation. See Securities Exchange

Act Release No. 54026 (June 21, 2006), 71 FR 36850 (June 28, 2006)

(SR-PCX-2005-115).

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    In addition, the Bulletin will reference that the Fund is subject

to various fees and expenses described in the Registration Statement.

The Bulletin will discuss any exemptive, no-action,

and interpretive relief granted by the Commission from any rules under

the Exchange Act. The Bulletin will also disclose that the NAV for the

Shares will be calculated after 4 p.m. Eastern Time each trading day.

2. Statutory Basis

    The basis under the Exchange Act for this proposed rule change is

the requirement under Section 6(b)(5) \14\ that an exchange have rules

that are designed to prevent fraudulent and manipulative acts and

practices, to promote just and equitable principles of trade, to remove

impediments to, and perfect the mechanism of a free and open market

and, in general, to protect investors and the public interest. The

Exchange believes that the proposed rule change will facilitate the

listing and trading of an additional type of actively managed exchange-

traded product that will enhance competition among market participants,

to the benefit of investors and the marketplace.

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    \14\ 15 U.S.C. 78f(b)(5).

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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will

impose any burden on competition that is not necessary or appropriate

in furtherance of the purposes of the Exchange Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the

proposed rule change.

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

Commission Action

    Within 35 days of the date of publication of this notice in the

Federal Register or within such longer period (i) as the Commission may

designate up to 90 days of such date if it finds such longer period to

be appropriate and publishes its reasons for so finding or (ii) as to

which the self-regulatory organization consents, the Commission will:

    (A) By order approve the proposed rule change, or

    (B) Institute proceedings to determine whether the proposed rule

change should be disapproved.

    The Exchange has requested accelerated approval of this proposed

rule change prior to the 30th day after the date of publication of the

notice in the Federal Register.\15\ The Commission is considering

granting accelerated approval of the proposed rule change at the end of

a 15-day comment period.

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    \15\ E-mail from Michael Cavalier, Associate General Counsel,

NYSE Euronext, to Edward Cho and Christopher Chow, Special Counsels,

Commission, dated August 13, 2008.

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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 Exchange 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-2008-85 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities

and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

    All submissions should refer to File Number SR-NYSEArca-2008-85.

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, 100 F Street,

NE., Washington, DC 20549, on official business days between the hours

of 10 a.m. and 3 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-NYSEArca-2008-85 and should

be submitted on or before September 10, 2008.

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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,

pursuant to delegated authority.\16\

Florence E. Harmon,

Acting Secretary.

[FR Doc. E8-19707 Filed 8-25-08; 8:45 am]

BILLING CODE 8010-01-P