SEC seeks comment on NYSE Arca's plan to allow listings of notes linked to investment companies

By Angela McDaniels

Tacoma, Wash., Sept. 16 - The Securities and Exchange Commission is soliciting comments on a proposed rule change that would allow NYSE Arca, Inc. to list equity-linked notes that are based on underlying shares issued by investment companies. The rule would also apply to non-convertible preferred stock.

The application to make the change came through wholly owned subsidiary NYSE Arca Equities, Inc.

Under current NYSE Arca rules, each issuer of an underlying security to which an equity-linked note is linked must be a reporting company under the Securities Exchange Act of 1934 that is listed on a national securities exchange. The exchange wants to expand this provision to include companies registered under the Investment Company Act of 1940.

NYSE Arca also wants to clarify the rule to state that, in either case, any underlying security must be listing on a national securities exchange.

The exchange filed the proposed rule change on Aug. 25, according to an SEC news release.

Comments can be submitted electronically at www.sec.gov/rules/sro.shtml or via e-mail at rule-comments@sec.gov. Paper comments can be sent to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2008-94.

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