Tuesday, February 14, 2012

NYSE Proposes Listing Rules for Derivatives and Structured Products


Author: David Schwartz J.D. CPA David Schwartz J.D. CPA

Nasdaq has proposed new rules for the the qualification, listing, trading, and delisting of a broad list of structured notes and other related products. Although the present NASDAQ Rule 5710 includes initial listing standards for equity index-linked securities and commodity-linked securities, NASDAQ's proposal would amend Rule 5710 to add continuing listing standards for equity index-linked securities and commodity-linked securities. Nasdaq has also proposed Rule 5711 which would impose listing standards for a host of other equity-linked, commodity-linked, and other notes.

Proposed Rule 5710 would impose continuing listing standards for equity index-linked securities; and commodity-linked securities.  The proposed rule would also impose both initial and continuing listing standards for:
  • fixed income index-linked securities;
  • futures-linked securities; and
  • multifactor index-linked securities.

Proposed Rule 5711 would include new listing standards for:
  • index-linked exchangeable notes;
  • equity gold shares;
  • trust certificates;
  • commodity-based trust shares;
  • currency trust shares;
  • commodity index trust shares;
  • commodity futures trust shares;
  • partnership units;
  • trust units;
  • managed trust securities; and
  • currency warrants.

The rule proposals also include provisions for delisting these types of securities, as well as requirements for market makers in these securities. These new listing standards are based on the relevant listing standards of the NYSE Arca, Inc. Equities Rules, and Nasdaq as asked the SEC for accelerated action on approving them. The full text of the proposed rules are available at: http://nasdaq.cchwallstreet.com/NASDAQ/pdf/nasdaq-filings/2012/SR-NASDAQ-2012-013.pdf
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