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15230 Federal Register / Vol. 73, No.

56 / Friday, March 21, 2008 / Notices

comments received will be posted 19), is hereby approved on an March 14, 2008, the Exchange filed
without change; the Commission does accelerated basis. Amendment No. 2 to the proposed rule
not edit personal identifying For the Commission, by the Division of change.5 The Commission received no
information from submissions. You Trading and Markets, pursuant to delegated comments regarding the proposal. This
should submit only information that authority.11 order provides notice and solicits
you wish to make available publicly. All Florence E. Harmon, comments from interested persons
submissions should refer to File No. Deputy Secretary. regarding Amendment No. 2 to the
SR–Amex–2008–19 and should be [FR Doc. E8–5694 Filed 3–20–08; 8:45 am] proposed rule change and approves the
submitted on or before April 11, 2008. BILLING CODE 8011–01–P
proposed rule change, as modified by
Amendment Nos. 1 and 2 thereto, on an
IV. Commission’s Findings and Order accelerated basis.
Granting Accelerated Approval of
Proposed Rule Change. SECURITIES AND EXCHANGE II. Description of the Proposal
COMMISSION
After careful consideration, the The Exchange proposes to add new
Commission finds that the Exchange’s [Release No. 34–57514; File No. SR–Amex– Amex Rules 1000B, 1001B, 1002B, and
2008–02] 1003B to permit the listing and trading
proposal to retroactively apply the Fee
Cap Program from February 2, 2008 of Managed Fund Shares. Pursuant to
Self-Regulatory Organizations;
through February 18, 2008 is consistent these new rules, the Exchange proposes
American Stock Exchange LLC; Notice
with the requirements of the Section 6 to list and trade the Shares. Amex states
of Filing of Amendment No. 2 to
of the Act 6 and the rules and that the Shares will conform to the
Proposed Rule Change and Order
regulations thereunder applicable to a initial and continued listing criteria
Granting Accelerated Approval of Such
national securities exchange.7 In under proposed Amex Rules 1000B,
Proposed Rule Change, as Modified by
particular, the Commission believes that 1001B, and 1002B. The Exchange also
Amendment Nos. 1 and 2 Thereto,
the proposed rule change is consistent proposes to amend its original listing
Relating to Rules Permitting the
with Section 6(b)(4) of the Act, which Listing and Trading of Managed Fund and annual listing fees in Sections 140
requires, among other things, that the Shares, Fees Applicable to Such and 141 of the Amex Company Guide to
rules of a national securities exchange Managed Fund Shares, and the Listing include Managed Fund Shares and
provide for the equitable allocation of and Trading of Shares of the Bear make certain other technical and
reasonable dues, fees, and other charges Stearns Current Yield Fund conforming changes in the Amex rules
among its members and issuers and to incorporate references to the new
other persons using its facilities.8 March 17, 2008. Amex rules proposed herein.
The Amex has requested that the I. Introduction Proposed Listing Rules
Commission find good cause for On February 7, 2008, the American Proposed new Amex Rules 1000B,
approving the proposed rule change Stock Exchange, LLC (‘‘Amex’’ or 1001B (for initial listing), and 1002B (for
prior to the thirtieth day after ‘‘Exchange’’) filed with the Securities continued listing) define and establish
publication of the notice thereof in the and Exchange Commission listing standards for Managed Fund
Federal Register. The Commission (‘‘Commission’’), pursuant to Section Shares. Proposed Amex Rule 1000B(b)
believes that granting accelerated 19(b)(1) of the Securities Exchange Act sets forth the relevant definitions. In
approval of the proposal will allow the of 1934 (‘‘Act’’)1 and Rule 19b–4 particular, proposed Amex Rule
Amex to continue to operate the Fee thereunder,2 a proposed rule change 1000B(b)(1) defines ‘‘Managed Fund
Cap Program on an uninterrupted basis seeking to: (1) Adopt new Amex Rules Share’’ as a security that: (a) Represents
and thus, should benefit market 1000B, 1001B, 1002B, and 1003B to an interest in a registered investment
participants by ensuring continuity of permit the listing and trading of company (‘‘Investment Company’’),
the Exchange’s rules. The Commission securities (‘‘Managed Fund Shares’’) organized as an open-end management
notes that no comments were received issued by an actively managed, open- investment company or similar entity,
in connection with the approval of the end investment management company; that invests in a portfolio of securities
Fee Cap Program and no comments have (2) list and trade the shares (‘‘Shares’’) selected by the Investment Company’s
been received during the operation of of the Bear Stearns Current Yield Fund investment adviser consistent with the
the Fee Cap Program. Accordingly, the (‘‘Fund’’), an investment portfolio of the
Commission finds good cause, pursuant Bear Stearns Active ETF Trust (‘‘Trust’’), Exhibit 1 thereto to account for such corrections.
to Section 19(b)(2) of the Act,9 for pursuant to those rules; and (3) amend Because Amendment No. 1 to the proposed rule
approving the proposed rule change its original listing and annual listing change is technical in nature, it is not subject to
prior to the thirtieth day after notice and comment.
fees to include Managed Fund Shares 5 In Amendment No. 2, Amex added Commentary
publication of the notice thereof in the and make certain other changes. The .06 to proposed Amex Rule 1000B which would
Federal Register. proposed rule change was published for require: (1) the investment adviser to the
comment in the Federal Register on Investment Company (as defined herein) issuing
V. Conclusion Managed Fund Shares to erect a ‘‘firewall’’ around
February 14, 2008.3 On February 20, personnel who have access to information
It is therefore ordered, pursuant to 2008, the Exchange filed Amendment concerning the composition and/or changes to the
Section 19(b)(2) of the Act,10 that the No. 1 to the proposed rule change.4 On Investment Company portfolio; and (2) personnel
proposed rule change, (SR–Amex–2008– who make decisions on the Investment Company’s
11 17 portfolio composition to be subject to procedures
CFR 200.30–3(a)(12).
6 15 designed to prevent the use and dissemination of
U.S.C. 78f. 1 15 U.S.C. 78s(b)(1). material non-public information regarding the
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7 In approving this proposed rule change, the 2 17 CFR 240.19b–4.


applicable Investment Company portfolio. In
Commission has considered its impact on 3 See Securities Exchange Act Release No. 57297
addition, Amex provided a representation
efficiency, competition, and capital formation. See (February 8, 2008), 73 FR 8723 (‘‘Notice’’). describing the ethical and fiduciary requirements
15 U.S.C. 78c(f). 4 In Amendment No. 1, Amex made several under the Investment Advisers Act of 1940
8 15 U.S.C. 78f(b)(4).
clarifying corrections to the definitions of (‘‘Advisers Act’’), as they apply to Bear Stearns
9 15 U.S.C. 78s(b)(2).
‘‘Disclosed Portfolio’’ and ‘‘Portfolio Indicative Asset Management, Inc., the investment adviser of
10 15 U.S.C. 78s(b)(2). Value’’ and conforming changes to Form 19b–4 and the Fund.

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Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices 15231

Investment Company’s investment except that the required ‘‘firewall’’ to be Company’s portfolio.7 In addition,
objectives and policies; (b) is issued in established around certain personnel proposed Commentary .06 further
a specified aggregate minimum number and procedures designed to prevent requires that personnel who make
in return for a deposit of a specified such personnel from using and decisions on the Investment Company’s
portfolio of securities and/or a cash disseminating material non-public portfolio composition must be subject to
amount with a value equal to the next information reflect restricted access and procedures designed to prevent the use
determined net asset value (‘‘NAV’’); dissemination of the Investment and dissemination of material non-
and (c) when aggregated in the same Company’s portfolio, as opposed to an public information regarding the
specified minimum number, may be underlying benchmark index, as is the Investment Company’s portfolio.
redeemed at a holder’s request for a case with index-based exchange-traded With respect to the initial listing
specified portfolio of securities and/or funds (‘‘ETFs’’). standards for Managed Fund Shares,
cash with a value equal to the next Proposed Commentary .02 to Amex proposed Amex Rule 1001B(i) provides
determined NAV. Rule 1000B is substantively identical to that the Exchange will establish a
Proposed Amex Rule 1000B(b)(2) existing Commentary .02(j) to Amex minimum number of shares outstanding
defines Disclosed Portfolio as the Rule 1000A–AEMI, which relates to at the time of commencement of trading.
securities and other assets in the international or global portfolio In addition, proposed Amex Rule
Investment Company portfolio that will creations/redemptions. With respect to a 1001B(ii) requires that the Exchange
form the basis for the Investment Managed Fund Share based on an obtain a representation from the issuer
Company’s calculation of its NAV. The international or global portfolio, this of each series of Managed Fund Shares
term ‘‘Portfolio Indicative Value,’’ set provision requires that the statutory that the NAV per share for the series
forth in proposed Amex Rule prospectus or the application for will be calculated daily and that the
1000B(b)(3), is defined as the estimated exemption from provisions of the NAV and the Disclosed Portfolio will be
indicative value of a Managed Fund Investment Company Act of 1940 made available to all market
Share based on updated information (‘‘1940 Act’’) for the series of Managed participants at the same time. Proposed
regarding the value of the securities in Fund Shares state that such series will Commentary .01 to Amex Rule 1001B
the Disclosed Portfolio. Proposed Amex comply with the federal securities laws specifically provides that each series of
Rule 1000B(b)(4) defines ‘‘Reporting in accepting securities for deposits and Managed Fund Shares, prior to listing
Authority’’ to mean the Exchange, a satisfying redemptions with redemption and/or trading, is required to submit for
subsidiary of the Exchange, or an securities, including that the securities Commission review and approval, a
institution or service designated by the accepted for deposits and the securities proposed rule change pursuant to
Exchange or its subsidiary as the official used to satisfy redemption requests are Section 19(b) of the Act. Accordingly,
source for determining and reporting the sold in transactions that would be each series of Managed Fund Shares
information relating to a series of exempt from registration under the will require Commission review and
Managed Fund Shares, including, but Securities Act of 1933. approval prior to listing and trading.
not limited to, the Portfolio Indicative Proposed Commentary .03 to Amex The proposed continued listing
Value, the Disclosed Portfolio, the Rule 1000B is substantively identical to criteria set forth in proposed Amex Rule
amount of any cash distribution to Commentary .06 to Amex Rule 1000A– 1002B(iii) provides for the delisting of
holders of Managed Fund Shares, NAV, AEMI in connection with Exchange the Shares under any of the following
or other information relating to the obligations for those Managed Fund circumstances:
issuance, redemption, or trading of Shares that receive an exemption from
Managed Fund Shares. certain prospectus delivery 7 The Exchange states that an Investment

Proposed Commentaries .01 through requirements under Section 24(d) of the Company’s investment adviser, which is required to
be registered under the Advisers Act, would be
.05 to proposed Amex Rule 1000B 1940 Act. Proposed Commentary .04 to subject to the provisions of Rule 204A–1 under the
substantially mirror Commentaries .05, Amex Rule 1000B, relating to the Advisers Act (17 CFR 275.204A–1) relating to codes
.02(j), .06, .08, and .09 to current Amex limitation of entering multiple limit of ethics for investment advisers. Rule 204A–1
Rule 1000A–AEMI, respectively. orders by members and member requires investment advisers to adopt a code of
ethics that reflects the fiduciary nature of the
Specifically, proposed Commentaries organizations, is also substantively relationship to clients as well as compliance with
.01(a), (b), (c), and (d) are substantively identical to Commentary .09 to Amex other applicable securities laws. Accordingly, the
identical to Commentaries .05(d), (f), (e), Rule 1000A–AEMI. Proposed Exchange notes that ‘‘firewall’’ procedures, as well
Commentary .05 to Amex Rule 1000B as procedures designed to prevent the misuse of
and (c), respectively, to Amex Rule non-public information by an investment adviser,
1000A–AEMI. The proposed relating to ‘‘trading ahead’’ is must be consistent with Rule 204A–1 under the
Commentary provisions relate to substantively identical to Commentary Advisers Act. In addition, Rule 206(4)–7 under the
minimum price variation, hours of .09 to Amex Rule 1000A–AEMI. Lastly, Advisers Act (17 CFR 275.206(4)–7) makes it
proposed Commentary .06 to Amex Rule unlawful for an investment adviser to provide
trading, listing fees, and surveillance investment advice to clients, unless such
procedures. In addition, the substance 1000B provides that the investment investment adviser has (i) adopted and
of Commentary .05(a) to Amex Rule adviser of the Investment Company implemented written policies and procedures
1000A–AEMI is set forth in proposed must erect a ‘‘firewall’’ around its reasonably designed to prevent violation, by the
personnel who have access to investment adviser and its supervised persons, of
Amex Rule 1000B(b)(3) in connection the Advisers Act and the rules thereunder; (ii)
with the dissemination of information. information regarding the composition implemented, at a minimum, an annual review
Proposed Commentary .06 to Amex Rule and/or changes to the Investment regarding the adequacy of such policies and
1000B is similar to Commentary .02(b)(i) procedures and the effectiveness of their
the index, and the index must be calculated by a implementation; and (iii) designated an individual
and (iii) to Amex Rule 1000A–AEMI,6 (who is a supervised person) responsible for
third party who is not a broker-dealer or fund
administering such policies and procedures. See
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advisor; and (2) any advisory committee,


6 See Commentary .02(b)(i) and (iii) to Amex Rule also Section 204A of the Advisers Act (15 U.S.C.
supervisory board, or similar entity that advises a
1000A–AEMI (providing that: (1) if the index on Reporting Authority or that makes decisions on the 80b–4a) (requiring investment advisers to establish,
which a series of Index Fund Shares is based is index or portfolio composition, methodology, and maintain, and enforce written policies and
maintained by a broker-dealer or fund advisor, the related matters, must implement and maintain, or procedures reasonably designed to prevent the
broker-dealer or fund advisor must erect a be subject to, procedures designed to prevent the misuse of material, non-public information by such
‘‘firewall’’ around the personnel who have access to use and dissemination of material non-public investment adviser or any person associated with
information concerning changes and adjustments to information regarding the applicable index). such investment adviser).

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15232 Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices

• If, following the initial twelve- of the trading day following the Act.8 The investment objective of the
month period after commencement of interruption. Fund is to seek as high a level of current
trading on the Exchange of a series of • If a series of Managed Fund Shares income as is consistent with the
Managed Fund Shares, there are fewer is trading on the Exchange pursuant to preservation of capital and liquidity.
than 50 beneficial holders of the series unlisted trading privileges, the The Fund will be actively managed by
of the Managed Fund Shares for 30 or Exchange will halt trading in that series its portfolio manager, who will have
more consecutive trading days; if the primary listing market halts discretion to choose securities for the
• If the value of the Portfolio trading in that series of Managed Fund Fund’s portfolio consistent with the
Indicative Value is no longer calculated Shares because the Portfolio Indicative Fund’s investment objective.9 The
or available, or the Disclosed Portfolio is Value applicable to that series of Fund’s portfolio manager seeks to attain
not made available to all market Managed Fund Shares is not being the Fund’s objective by investing
participants at the same time; disseminated as required. primarily in short-term debt obligations,
• If the Trust has not filed, on a • If the Exchange becomes aware that including U.S. government securities,
timely basis, any required filings with the NAV or Disclosed Portfolio related bank obligations, corporate debt
the Commission, or if the Exchange to a series of Managed Fund Shares is obligations, mortgage-backed and asset-
becomes aware that the Trust is not in not being disseminated to all market backed securities, municipal
compliance with the conditions of any participants at the same time, the obligations, foreign bank obligations
exemptive order or no-action relief Exchange will halt trading in such (U.S. dollar denominated), foreign
granted by the Commission to or Managed Fund Shares. The Exchange corporate debt obligations (U.S. dollar
otherwise applicable to the Trust; or may resume trading in the Managed denominated), repurchase agreements,
• If such other event shall occur or Fund Shares only when the NAV or and reverse repurchase agreements.
condition exists which, in the opinion Disclosed Portfolio is disseminated to The Exchange proposes to list and
of the Exchange, makes further dealings all market participants at the same time. trade the Fund Shares pursuant to
of the Managed Fund Shares on the • Finally, in exercising its discretion proposed Amex Rules 1000B, 1001B,
Exchange inadvisable. to halt or suspend trading in Managed and 1002B. Amex represents that the
Proposed Amex Rule 1002B also sets Fund Shares, the Exchange may Shares will conform to the initial and
forth the continued listing criteria consider factors such as those set forth continued listing criteria under such
in Amex Rule 918C(b), in addition to proposed rules.10 The Registration
relating to the Portfolio Indicative Value
Statement, including the Prospectus and
and the Disclosed Portfolio. other factors that may be relevant.
Statement of Additional Information
Specifically, proposed Amex Rule Proposed Amex Rule 1003B would
(‘‘SAI’’), provides a detailed description
1002B(i) requires that the Portfolio limit Exchange liability in connection
of the Fund including, but not limited
Indicative Value for a Managed Fund with potential claims, damages, losses,
to, the structure of the Fund, cash-only
Share be widely disseminated by one or or expenses regarding a Managed Fund
creation and redemption processes,
more major market data vendors at least Share. The Exchange states that
investment objective and policies,
every 15 seconds during the time the proposed Amex Rule 1003B is characteristics, tax status, and
Managed Fund Shares are traded on the substantially similar to current Amex distributions.11
Exchange. Proposed Amex Rule Rule 1003A.
1002B(ii)(a) provides that the Disclosed Availability of Information Regarding
Original and Annual Listing Fees the Fund and the Shares
Portfolio be disseminated at least once
daily to all market participants at the The Exchange seeks to amend its rules The daily NAV for the Fund will be
same time. Further, proposed Amex relating to listing fees to include calculated and disseminated publicly
Rule 1002B(ii)(b) requires that the Managed Fund Shares. As proposed, each Business Day 12 to all market
Reporting Authority for the Disclosed Amex’s original listing fee applicable to participants at the same time. In
Portfolio implement and maintain, or be the listing of series of Managed Fund addition, prior to the opening each
subject to, ‘‘firewall’’ procedures Shares will be $5,000, but may be Business Day, the Fund will make
designed to prevent the use and deferred, waived, or rebated upon
dissemination of material, non-public transfer to Amex from another 8 The Exchange states that the Fund is not a

information regarding the actual marketplace. In addition, the annual ‘‘money market fund’’ and is not subject to certain
components of the Disclosed Portfolio. listing fee applicable under Section 141 rules and regulations under the 1940 Act governing
money market funds.
Pursuant to proposed Amex Rule of the Amex Company Guide will be 9 The Exchange states that the Fund’s investment
1002B(iv), the Exchange will halt based upon the year-end aggregate objective may be changed without shareholder
trading under the following number of Shares outstanding at the end approval upon 30 days’ written notice to
circumstances: of each calendar year. In connection shareholders.
10 The Exchange represents that, for initial and/
• If the circuit breaker parameters of with Section 140 of the Company Guide,
or continued listing, the Shares must also be in
Amex Rule 117 have been reached, the the Exchange proposes to make a compliance with Section 803 of the Amex Company
Exchange will halt trading in a series of technical revision so that ‘‘Trust Units’’ Guide and Rule 10A–3 under the Act (17 CFR
Managed Fund Shares. are also included among the types of 240.10A–3). In addition, the Exchange represents
that Bear Stearns Asset Management, Inc. (‘‘Bear
• If the Portfolio Indicative Value of securities whose initial listing fees may Stearns Asset Management’’), the investment
the Managed Fund Shares is not being be deferred, waived, or rebated upon adviser of the Fund, and its related personnel are
disseminated as required, the Exchange transfer to Amex from another subject to Rule 204A–1 under the Advisers Act. See
may halt trading during the day in marketplace. supra note 7.
11 See the Trust’s Form N–1A/A filed with the
which the interruption to the Description of the Fund Commission on August 6, 2007 (File Nos. 333–
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dissemination of the Portfolio Indicative 141421 and 811–22038). Additional information


Value occurs. If the interruption to the The Fund, an exchange-traded fund, regarding arbitrage opportunities relating to the
dissemination of the Portfolio Indicative is the sole investment portfolio of the Shares can be found in the Notice. See Notice,
Trust. The Trust is organized as a supra note 3.
Value persists past the trading day in 12 ‘‘Business Day’’ is defined as a day in which
which it occurred, the Exchange will Delaware statutory trust and is an open- the Trust will sell and redeem Creation Units of the
halt trading no later than the beginning end fund registered under the 1940 Fund.

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Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices 15233

publicly available on its Web site the Speed Lines, including quotation and Fund by delivery of a Creation Unit will
Disclosed Portfolio, which is the file of last sale data, information of the receive a Prospectus.
all the portfolio securities held by the previous day’s close with respect to In addition, the Information Circular
Fund and the quantities thereof, NAV, and the number of Shares will inform Exchange members and
including, as applicable, the specific outstanding. In addition, as with other member organizations that procedures
types and amounts of short-term debt ETFs, information regarding secondary for purchases and redemptions of
securities and the amount of cash held market prices and volume of the Shares Shares in Creation Units are described
in the portfolio of the Fund, as of the will be broadly available in real-time in the Fund’s Prospectus and SAI, and
close of business on the prior Business throughout the trading day. that Shares are not individually
Day, reflecting all securities bought and redeemable, but are redeemable only in
Trading Rules
sold on such prior Business Day. 13 This Creation Units or multiples thereof. The
information will be available to all The Shares are equity securities Exchange will also inform members and
investors and market participants at the subject to Amex rules governing the member organizations of the
same time and will form the basis for trading of equity securities, including, characteristics of the Fund and the
the Fund’s calculation of NAV as of the among others, rules governing priority, Shares and of applicable Exchange
close of regular trading on the Exchange parity, and precedence of orders, rules, as well as of the suitability
(ordinarily 4 p.m. Eastern Time). specialist responsibilities, account requirements of Amex Rule 411 (Duty to
Amex will disseminate at least every opening, and customer suitability Know and Approve Customers).
15 seconds during regular Amex trading (Amex Rule 411). Trading rules
hours, through the facilities of the pertaining to odd-lot trading in Amex Surveillance
Consolidated Tape Association equities (Amex Rule 205–AEMI) will The Exchange represents that its
(‘‘CTA’’), the Portfolio Indicative Value. also apply. Specialist transactions of the surveillance procedures are adequate to
An independent pricing service will Shares made in connection with the properly monitor the trading of the
calculate the Portfolio Indicative Value creation and redemption of Shares will Shares. Specifically, Amex will rely on
during the hours of trading on the not be subject to the prohibitions of its existing surveillance procedures
Exchange by dividing the ‘‘Estimated Rule 190.15 governing Index Fund Shares. In
Fund Value’’ as of the time of the Amex Rules 154–AEMI(c)(ii) (Election addition, the Exchange also has a
calculation by the total Shares by Quotation of Stop and Stop Limit general policy prohibiting the
outstanding. ‘‘Estimated Fund Value’’ is Orders) and 126A–AEMI (Protected Bids distribution of material, non-public
the sum of the estimated amount of cash and Offers of Away Markets) will apply information by its employees.
held in the Fund’s portfolio, the to the trading of the Shares. In addition,
Exchange members and member III. Discussion
estimated value of the securities held in
the Fund’s portfolio, and the estimated organizations will be subject to After careful consideration, the
amount of accrued interest, minus the proposed Commentary .04 to Amex Rule Commission finds that the proposed
estimated amount of liabilities.14 1000B prohibiting such member or rule change is consistent with the
The Web site for the Fund will member organizations from entering requirements of the Act and the rules
display the Prospectus, the SAI, and into the Exchange’s order routing and regulations thereunder applicable to
additional quantitative information that system multiple limit orders as agent a national securities exchange.16 In
is updated on a daily basis, including, (i.e., customer agency orders). Further, particular, the Commission believes that
among other things, the following proposed Commentary .05 to Rule the proposal is consistent with Section
information, on a per-Share basis: (a) the 1000B provides that it may be 6(b)(5) of the Act,17 which requires,
prior Business Day’s NAV, the reported considered inconsistent with just and among other things, that the rules of a
mid-point of the bid-ask spread at the equitable principles of trade for a national securities exchange be
time of NAV calculation (‘‘Bid-Ask member or person associated with a designed to promote just and equitable
Price’’), and a calculation of the member to ‘‘trade ahead’’ of a related principles of trade, to remove
premium or discount of the Bid-Ask customer order in Managed Fund Shares impediments to and perfect the
Price against such NAV; and (b) data in based on material, non-public mechanism of a free and open market
information obtained from such and a national market system, and in
chart format displaying the frequency
customer order. general, to protect investors and the
distribution of discounts and premiums
of the Bid-Ask Price against the NAV, Information Circular public interest.
within appropriate ranges, for each of The Exchange will distribute an Proposed Listing Rules for Managed
the four previous calendar quarters. Information Circular to Exchange Fund Shares
Amex also intends to disseminate a members and member organizations
variety of data with respect to the The Commission finds that Amex’s
prior to the commencement of trading of proposal contains adequate rules and
Shares on a daily basis, by means of the Shares that describes the prospectus
CTA and Consolidated Quotation High procedures to govern the listing and
delivery requirements and, as relevant, trading of Managed Fund Shares on the
the application of proposed Exchange.18 Prior to listing and/or
13 The Exchange states that the Trust will comply
Commentary .03 to Amex Rule 1000B.
with its obligations to disclose in its SAI its policies
and procedures with respect to the Disclosed The Exchange notes that investors 16 In approving this proposed rule change, the

Portfolio and state in its Prospectus that a purchasing Shares directly from the Commission notes that it has considered the
description of the Fund’s policies and procedures proposed rule’s impact on efficiency, competition,
is available in the SAI. See Investment Company 15 Commentary .04 to Amex Rule 190 states that and capital formation. See 15 U.S.C. 78c(f).
Act Release No. 26418 (April 16, 2004), 69 FR nothing in Rule 190(a) should be construed to
17 15 U.S.C. 78f(b)(5).
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22300 (April 23, 2004). restrict a specialist registered in a security issued 18 The Commission believes that the proposed
14 The Exchange states that the methodology used rules and procedures are adequate with respect to
by an investment company from purchasing and
to calculate the Portfolio Indicative Value for the redeeming the listed security, or securities that can the Fund Shares. However, the Commission notes
Fund is similar to those used by some existing ETFs be subdivided or converted into the listed security, that other proposed series of Managed Fund Shares
listed on the Exchange that track fixed-income from the issuer as appropriate to facilitate the may require additional Exchange rules and
securities indices, as well as numerous fixed- maintenance of a fair and orderly market. See procedures to govern their listing and trading on the
income mutual funds. Commentary .04 to Amex Rule 190. Continued

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15234 Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices

trading on the Exchange, Amex must Exchange becomes aware that the NAV establish trading guidelines,22 and
file a separate proposed rule change or Disclosed Portfolio related to a series prospectus and/or product description
pursuant to Section 19(b) of the Act for of Managed Fund Shares is not being requirements.23 In addition,
each series of Managed Fund Shares. All disseminated to all market participants Commentary .06 to proposed Amex Rule
such securities listed and/or traded at the same time, the Exchange will halt 1000B requires: (1) The investment
under proposed Amex Rule 1000B will trading in such series of Managed Fund adviser of the Investment Company to
be subject to the full panoply of Amex Shares. The Exchange may resume erect a ‘‘firewall’’ around its personnel
rules and procedures that currently trading in such series of Managed Fund who have access to information
govern the trading of equity securities Shares only when the NAV or Disclosed regarding the composition and/or
on the Exchange. Portfolio is disseminated to all market changes to the Investment Company’s
For the initial listing of each series of participants. portfolio; and (2) personnel, who make
Managed Fund Shares under proposed decisions on the Investment Company’s
Amex Rule 1001B, the Exchange must The Exchange may also consider the
suspension of trading in, or removal portfolio composition, to be subject to
establish a minimum number of procedures designed to prevent the use
Managed Fund Shares required to be from listing of, a series of Managed
Fund Shares if: (1) Following the initial and dissemination of material non-
outstanding at the commencement of public information regarding the
trading on the Exchange. In addition, twelve-month period after
Investment Company’s portfolio. Lastly,
the Exchange must obtain a commencement of trading on the
proposed Amex Rule 1002B(ii)(b)
representation from the issuer of Exchange of a series of Managed Fund
requires that the Reporting Authority
Managed Fund Shares that the NAV per Shares, there are fewer than 50
that provides the Disclosed Portfolio
share will be calculated daily and that beneficial holders of the series of the
implement and maintain, or be subject
the NAV and the Disclosed Portfolio Managed Fund Shares for 30 or more
to, procedures designed to prevent the
will be made available to all market consecutive trading days; (2) the value
use and dissemination of material non-
participants at the same time. of the Portfolio Indicative Value is no
public information regarding the actual
The Commission believes that the longer calculated or available, or the
components of the portfolio.
proposed continued listing and trading Disclosed Portfolio is not made
standards under proposed Amex Rule available to all market participants at Amendments to Original and Annual
1002B are adequate to ensure the same time; (3) the Trust has not Listing Fees
transparency of key values and filed, on a timely basis, any required As proposed, Amex’s original listing
information regarding the securities. For filings with the Commission, or if the and annual listing fees will be
continued listing of each series of Exchange becomes aware that the Trust applicable to a series of Managed Fund
Managed Fund Shares, the Portfolio is not in compliance with the conditions Shares under Sections 140 and 141 of
Indicative Value must be widely of any exemptive order or no-action the Amex Company Guide. In
disseminated by one or more major relief granted by the Commission to or connection with Section 140 of the
market data vendors at least every 15 otherwise applicable to the Trust; or (4) Company Guide, the Exchange also
seconds during the time when the such other event shall occur or proposes to make a technical revision so
Managed Fund Shares trade on the condition exists which, in the opinion that ‘‘Trust Units’’ are also included
Exchange. Further, the Disclosed of the Exchange, makes further dealings among the types of securities whose
Portfolio must be disseminated at least of the Managed Fund Shares on the initial listing fees may be deferred,
once daily and made available to all Exchange inadvisable. waived, or rebated upon transfer to
market participants at the same time. The Commission believes that the Amex from another marketplace. The
The Commission finds that the foregoing requirements of proposed Commission finds that the changes
Exchange’s rules with respect to trading Amex Rules 1001B and 1002B should made to Amex’s original listing and
halts under proposed Amex Rule help to prevent trading when a annual listing fees to include Managed
1002B(iv) should help ensure the reasonable degree of transparency Fund Shares, and the technical revision
availability of key values and cannot be assured and to maintain a fair to add ‘‘Trust Units’’ to Section 140 of
information relating to Managed Fund and orderly market for Managed Fund the Amex Company Guide, are
Shares. If the Portfolio Indicative Value Shares. reasonable and promote transparency of
is not being disseminated as required,
The Commission believes that the the fees to be imposed with respect to
the Exchange may halt trading during
proposed listing and trading rules for a series of Managed Fund Shares and
the day in which the interruption to the
Managed Fund Shares, many of which Trust Units.
dissemination of the Portfolio Indicative
Value occurs. If the interruption of such track existing Exchange rules relating to Proposal To List and Trade the Shares
value persists past the trading day in Index Fund Shares, are reasonably of the Fund
which it occurred, the Exchange must designed to promote a fair and orderly
market for such Managed Fund Shares The Exchange proposes to list and
halt trading no later than the beginning trade the Fund Shares pursuant to
of the trading day following the by, among other things, requiring
disclosure of information that may be proposed Amex Rules 1000B, 1001B,
interruption.19 In addition, if the and 1002B. Amex represents that the
necessary to price Managed Fund
Shares. The proposed rules also Shares will conform to the initial and
Exchange. For example, in the case of a proposed
series of Managed Fund Shares that are based on prescribe ‘‘trading ahead’’ restrictions,20 continued listing criteria under such
a portfolio, at least in part, of non-U.S. securities, require surveillance procedures,21 proposed rules.
rules relating to comprehensive surveillance The Commission believes that the
sharing agreements and quantitative initial and proposal to list and trade the Shares of
mstockstill on PROD1PC66 with NOTICES

continued listing standards may be required. Indicative Value applicable to that series of
19 Under proposed Amex Rule 1002B(iv)(c), if a Managed Fund Shares is not being disseminated as the Fund on the Exchange is consistent
series of Managed Fund Shares is trading on the required.
20 See Commentary .05 to proposed Amex Rule 22 See, e.g., Commentaries .01 and .04 to proposed
Exchange pursuant to unlisted trading privileges,
the Exchange will halt trading in that series if the 1000B. Amex Rule 1000B.
primary listing market halts trading in that series of 21 See Commentary .01 to proposed Amex Rule 23 See Commentaries .02 and .03 to proposed

Managed Fund Shares because the Portfolio 1000B. See also supra note 18. Amex Rule 1000B.

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Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices 15235

with Section 11A(a)(1)(C)(iii) of the on such knowledge, an order to buy or those set forth in Amex Rule 918C(b)
Act,24 which sets forth Congress’ finding sell a Share that is the subject of the and other relevant factors.
that it is in the public interest and order, an order to buy or sell the The Commission further believes that
appropriate for the protection of overlying option class, or an order to the trading rules and procedures to
investors and the maintenance of fair buy or sell any related instrument 26 which the Shares will be subject
and orderly markets to assure the until all the terms of the order are pursuant to this proposal are consistent
availability to brokers, dealers, and disclosed to the trading crowd or the with the Act. The Exchange has
investors of information with respect to trade is no longer imminent in view of represented that the Shares are equity
quotations for and transactions in the passage of time since the order was securities subject to Amex’s rules
securities. Quotations and last-sale received. Commentary .06 to proposed governing the trading of equity
information for the Shares will be Amex Rule 1000B restricts certain securities.
disseminated by means of CTA and personnel of Bear Stearns Asset In support of this proposal, the
Consolidated Quotation High Speed Management with respect to access, use,
Exchange has made the following
Lines. In addition, the Portfolio and dissemination of information
representations:
Indicative Value will be disseminated at concerning the composition and/or
least every 15 seconds throughout changes to the Fund’s portfolio.27 In (1) The Shares will conform to the
Amex’s trading hours, in accordance addition, proposed Amex Rule initial and continued listing criteria
with proposed Amex Rule 1002B(i). 1002B(ii)(b) requires that the Reporting under proposed Amex Rules 1000B,
Amex will also disseminate via CTA Authority that provides the Disclosed 1001B, and 1002B.
and Consolidated Quotation High Speed Portfolio implement and maintain, or be (2) The Exchange’s surveillance
Lines various other data, including subject to, procedures designed to procedures are adequate to properly
information of the previous day’s close prevent the use and dissemination of monitor the trading of the Shares.
with respect to NAV and the number of material non-public information Specifically, Amex will rely on its
Shares outstanding. The daily NAV for regarding the actual components of the existing surveillance procedures
the Fund will be calculated and portfolio. governing Index Fund Shares.29
disseminated publicly each Business For the reasons discussed above, the (3) Prior to the commencement of
Day to all market participants at the Commission believes that the trading, the Exchange will inform its
same time, and, prior to the opening Exchange’s trading halt rules are members and member organizations in
each Business Day, the Fund will make reasonably designed to prevent trading an Information Circular regarding the
the Disclosed Portfolio available to all in the Shares when transparency is prospectus delivery requirements and,
market participants at the same time on impaired. Proposed Amex Rule as relevant, the application of
its Web site. The Fund’s Web site will 1002B(iv)(a) provides that the Exchange Commentary .03 to Amex Rule 1000B.
also contain a variety of other will halt trading in the Shares if the The Information Circular will also
information for the Shares, including a circuit breaker parameters of Amex Rule provide guidance with regard to the
display of the Prospectus and SAI and 117 have been reached. In addition, characteristics of the Fund and the
quantitative information on a per-Share proposed Amex Rule 1002B(iv)(b) Shares and of applicable Exchange
basis. provides that, if the Portfolio Indicative rules, including the suitability
Furthermore, the Commission Value applicable to the Shares is not requirements of Amex Rule 411. In
believes that the proposal to list and being disseminated as required, the addition, the Information Circular will
trade the Shares is reasonably designed Exchange may halt trading during the disclose that the procedures for
to promote fair disclosure of day in which the interruption to the purchases and redemptions of Shares in
information that may be necessary to dissemination occurs. If the interruption Creation Units are described in each
price the Shares appropriately and to to the dissemination of the Portfolio Fund’s Prospectus and SAI, and that
prevent trading when a reasonable Indicative Value persists past the Shares are not individually redeemable,
degree of transparency cannot be trading day in which it occurred, the but are redeemable only in Creation
assured. The Commission notes that the Exchange will halt trading no later than Unit aggregations or multiples thereof.
Exchange is required to obtain a the beginning of the trading day
(4) The Exchange represents that the
representation from the Trust, prior to following the interruption.28 In
Trust is required to comply with Section
listing, that the NAV per Share for the addition, if the Exchange becomes
803 of the Amex Company Guide and
Fund will be calculated daily, and that aware that the NAV or Disclosed
Rule 10A–3 under the Act 30 for the
the NAV and the Disclosed Portfolio Portfolio related to the Shares is not
will be made available to all market initial and continued listing of the
being disseminated to all market
participants at the same time.25 The Shares.
participants at the same time, the
Exchange may consider the suspension Exchange will halt trading in the Shares. This approval order is based on the
of trading in, or removal from listing of, The Exchange may resume trading in Exchange’s representations.
the Shares if the value of the Portfolio the Shares only when the NAV or IV. Solicitation of Comments
Indicative Value is no longer calculated Disclosed Portfolio is disseminated to
or available or the Disclosed Portfolio is all market participants. Finally, in Interested persons are invited to
not made available to all market exercising its discretion to halt or submit written data, views, and
participants at the same time. suspend trading in the Shares, the arguments concerning Amendment No.
Commentary .05 to proposed Amex Rule Exchange may consider factors such as 2 to the proposed rule change, including
1000B restricts members or persons whether the proposed rule change, as
associated with members who have 26 For purposes of Commentary .05, an order to modified by Amendment Nos. 1 and 2
mstockstill on PROD1PC66 with NOTICES

knowledge of all material terms and buy or sell a ‘‘related instrument’’ means an order thereto, is consistent with the Act.
to buy or sell securities that have been disclosed as Comments may be submitted by any of
conditions of an order being facilitated comprising 10% or more of the weight of the
or orders being crossed to enter, based Managed Fund Share portfolio. See Commentary
the following methods:
.05 to proposed Amex Rule 1000B.
24 15 U.S.C. 78k–1(a)(1)(C)(iii). 27 See supra notes 7 and 10. 29 See supra note 18.
25 See proposed Amex Rule 1001B(ii). 28 See supra note 19 and accompanying text. 30 17 CFR 240.10A–3. See supra note 10.

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15236 Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices

Electronic Comments changes to, the Investment Company 27, 2008, the Boston Stock Exchange,
• Use the Commission’s Internet portfolio, including the requirement of Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with
comment form (http://www.sec.gov/ ‘‘firewalls’’ to be erected around certain the Securities and Exchange
rules/sro.shtml); or personnel of the investment adviser to Commission (‘‘Commission’’) the
• Send an e-mail to rule- the Investment Company and proposed rule change as described in
comments@sec.gov. Please include File procedures designed to prevent the use Items I and II below, which Items have
Number SR–Amex–2008–02 on the and dissemination of material non- been substantially prepared by BSE. The
subject line. public information regarding such Exchange has filed the proposal as a
portfolio. In addition, the Exchange ‘‘non-controversial’’ rule change
Paper Comments represented that Bear Stearns Asset pursuant to Section 19(b)(3)(A) of the
• Send paper comments in triplicate Management, the investment adviser of Act 3 and Rule 19b–4(f)(6) thereunder,4
to Nancy M. Morris, Secretary, the Fund, would be subject to such which renders it effective upon filing
Securities and Exchange Commission, requirements and is already subject to with the Commission. The Commission
100 F Street, NE., Washington, DC the provisions of Rule 204A–1 under the is publishing this notice to solicit
20549–1090. Advisers Act.31 The Commission notes comments on the proposed rule change
that Commentary .06 is based on, and from interested persons.
All submissions should refer to File
substantially similar to, Commentary
Number SR–Amex–2008–02. This file I. Self-Regulatory Organization’s
.02(b)(i) and (iii) to Amex Rule 1000A–
number should be included on the Statement of the Terms of Substance of
AEMI.32 The Commission believes that
subject line if e-mail is used. To help the the Proposed Rule Change
Amendment No. 2 strengthens the
Commission process and review your BSE proposes to amend the rules of
proposal by promoting fair disclosure of
comments more efficiently, please use the Boston Options Exchange (‘‘BOX’’).
Investment Company portfolio
only one method. The Commission will The proposal would create a new
information and raises no new
post all comments on the Commission’s exemption from equity options position
regulatory issues. Accordingly, the
Internet Web site (http://www.sec.gov/ and exercise limits for positions held by
Commission finds good cause for
rules/sro.shtml). Copies of the BOX Participants under the BOX Rules.
approving the proposal, as modified by
submission, all subsequent The text of the proposed rule change is
Amendment Nos. 1 and 2 thereto, on an
amendments, all written statements available at BSE, the Commission’s
accelerated basis.
with respect to the proposed rule Public Reference Room, and http://
change that are filed with the VI. Conclusion www.bostonstock.com.
Commission, and all written It is therefore ordered, pursuant to
communications relating to the II. Self-Regulatory Organization’s
Section 19(b)(2) of the Act,33 that the Statement of the Purpose of, and
proposed rule change between the proposed rule change (SR–Amex–2008–
Commission and any person, other than 02), as modified by Amendment Nos. 1 Statutory Basis for, the Proposed Rule
those that may be withheld from the Change
and 2 thereto, be, and it hereby is,
public in accordance with the approved on an accelerated basis. In its filing with the Commission, BSE
provisions of 5 U.S.C. 552, will be included statements concerning the
available for inspection and copying in For the Commission, by the Division of purpose of and basis for the proposed
Trading and Markets, pursuant to delegated
the Commission’s Public Reference authority.34
rule change and discussed any
Room, 100 F Street, NE, Washington, DC comments it received on the proposed
20549, on official business days Jill M. Peterson, rule change. The text of these statements
between the hours of 10 a.m. and 3 p.m. Assistant Secretary. may be examined at the places specified
Copies of the filing also will be available [FR Doc. E8–5718 Filed 3–20–08; 8:45 am] in Item IV below. BSE has prepared
for inspection and copying at the BILLING CODE 8011–01–P summaries, set forth in Sections A, B,
principal office of the Exchange. All and C below, of the most significant
comments received will be posted aspects of such statements.
without change; the Commission does SECURITIES AND EXCHANGE
COMMISSION A. Self-Regulatory Organization’s
not edit personal identifying Statement of the Purpose of, and
information from submissions. You [Release No. 34–57503; File No. SR–BSE– Statutory Basis for, the Proposed Rule
should submit only information that 2008–10] Change
you wish to make available publicly. All
submissions should refer to File Self-Regulatory Organizations; Boston 1. Purpose
Number SR–Amex–2008–02 and should Stock Exchange, Inc.; Notice of Filing The purpose of the proposed rule
be submitted on or before April 11, and Immediate Effectiveness of change is to permit expanded hedge
2008. Proposed Rule Change To Create a positions pursuant to a carefully crafted
Delta Hedging Exemption From Equity delta hedge exemption from equity
V. Accelerated Approval Options Position Limits options position limits in Section 7 of
The Commission finds good cause for Chapter III of the BOX Rules.
March 14, 2008.
approving the proposed rule change, as All options traded on BOX are subject
modified by Amendment Nos. 1 and 2 Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 to position and exercise limits, as
thereto, prior to the thirtieth day after provided under Sections 7 and 9 of
the date of publication of notice of filing (‘‘Act’’) and Rule 19b–4 thereunder,
1 2

notice is hereby given that on February Chapter III of the BOX Rules. Position
of Amendment No. 2 in the Federal limits are imposed, generally, to
mstockstill on PROD1PC66 with NOTICES

Register. In Amendment No. 2, Amex 31 See supra notes 7 and 10. maintain fair and orderly markets for
provided additional safeguards in 32 See supra note 6 and accompanying text. options and other securities by limiting
Commentary .06 to proposed Amex Rule 33 15 U.S.C. 78s(b)(2). the amount of control one or more
1000B that relate to restricted access 34 See 17 CFR 200.30–3(a)(12).

and dissemination of key information 1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78s(b)(3)(A).


regarding the composition of, and 2 17 CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(6).

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