Notices. Notice of renewal of an existing computer matching program which expired on September 21, 2003

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BILLING CODE 7590-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50241; File No. SR-Amex-2004-57] Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change by the American Stock Exchange LLC Relating to the Listing and Trading of Notes Linked to the Performance of the Standard & Poor's 500 Stock Index August 24, 2004. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on July 27, 2004, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange.

The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposal on an accelerated basis. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240. 19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposed to list and trade notes, the performance of which is linked to the Standard & Poor's 500 Index (“S&P 500” or “Index”). 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 Amex included statements concerning the purpose of, and basis for, the proposed rule change.

The text of these statements may be examined at the places specified in Item III below. The Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Under Section 107A of the Amex Company Guide (“Company Guide”), the Exchange may approve for listing and trading securities which cannot be readily categorized under the listing criteria for common and preferred stocks, bonds, debentures, or warrants. 3 The Amex proposes to list for trading under Section 107A of the Company Guide notes linked to the performance of the S&P 500 (the “S&P Notes” or “Notes”). 4 Wachovia will issue the Notes under the name “ LUNARS ,” “Leveraged Upside Indexed Accelerated Return Securities.

” Each Note will be offered at an original public offering price of $1,000. The S&P 500 is determined, calculated and maintained solely by S&P. 5 At maturity the Notes will provide for a multiplier of any positive performance of the S&P 500 during such term subject to a maximum payment amount or ceiling to be determined at the time of issuance (the “Capped Amount”). The Capped Amount is expected to be $1,125. 6 3 *See* Securities Exchange Act Release No. 27753 (March 1, 1990), 55 FR 8626 (March 8, 1990) (order approving File No.

SR-Amex-89-29). 4 Wachovia Corporation (“Wachovia”) and Standard & Poor's Corporation, a division of the McGraw-Hill Companies, Inc. (“S&P”) have entered into a non-exclusive license agreement providing for the use of the S&P 500 by Wachovia and certain affiliates and subsidiaries in connection with certain securities including these Notes. S&P is not responsible and will not participate in the issuance and creation of the Notes. 5 The S&P 500 Index is a broad-based stock index, which provides an indication of the performance of the U.S. equity market.

The Index is a capitalization-weighted index reflecting the total market value of 500 widely held component stocks relative to a particular base period. The Index is computed by dividing the total market value of the 500 stocks by an Index divisor. The Index Divisor keeps the Index comparable over time to its base period of 1941-1943 and is the reference point for all maintenance adjustments. The securities included in the Index are listed on the Amex, New York Stock Exchange, Inc.

(“NYSE”) or traded through NASDAQ. The Index reflects the price of the common stocks of 500 companies without taking into account the value of the dividend paid on such stocks. The Index Value is disseminated once every fifteen seconds through numerous data providers. Telephone conference between Laura Clare, Assistant General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Division of Market Regulation (“Division”), Commission, on August 20, 2004 (pertaining to dissemination of Index Value).

In connection with the S&P 500, the Exchange notes that S&P has announced a change to its methodology so that weightings are based on the “public float” of a component stock and not those shares of stock that are not publicly traded. The S&P 500 is currently a market capitalization weighted index that is expected to be changed to a “float-adjusted” market capitalization index by September 2005. In a “traditional” market capitalization index, the value of the index is calculated by multiplying the total number of shares outstanding of each component by the price per share of the component.

The result is then divided by the divisor. On March 1, 2004, S&P announced that it intends to shift its major indexes, such as the S&P 500 to a “float-adjusted” market capitalization index. In a “float-adjusted” market capitalization index, the value of the index will be calculated by multiplying the public float of each component by the price per share of the component. The result is then divided by the divisor. Accordingly, a “float-adjusted” market capitalization index will exclude those blocks of stocks that do not publicly trade from determining the weight for a stock in the index.

The transition from a market capitalization weighted index to a “float-adjusted” capitalization weighted index will be implemented over an 18-month period. 6 *See* prospectus supplement dated August 3, 2004. The S&P 500 Notes will conform to the initial listing guidelines under Section 107A 7 and continued listing guidelines under Sections 1001-1003 8 of the Company Guide. The Notes are senior non-convertible debt securities of Wachovia. The Notes will have a term of not less than one or more than ten years.

Wachovia will issue the Notes in denominations of whole units (a “Unit”) with each Unit representing a single Note. The original public offering price will be $1,000 per Unit. The Notes will entitle the owner at maturity to receive an amount based upon the percentage change of the S&P 500. At maturity, if the value of the S&P 500 has increased over the term of the Notes, a beneficial owner will be entitled to receive a payment on the Notes equal to two

(2)times the amount of that percentage increase, not to exceed the Capped Amount of $1,125. The Notes will not have a minimum principal amount that will be repaid, and accordingly, payment on the Notes prior to or at maturity may be less than the original issue price of the Notes because the final payment per Note will be exposed to the full decrease of the Index. Thus, if the Index ending level is lower than the Index starting Level, the investor will lose some or all of his principal. 9 The Notes are also not callable by the Issuer, Wachovia, or redeemable by the holder. 7 The initial listing standards for the Notes require:

(1)A minimum public distribution of one million units;

(2)a minimum of 400 shareholders;

(3)a market value of at least $4 million; and

(4)a term of at least one year. In addition, the listing guidelines provide that the issuer has assets in excess of $100 million, stockholder's equity of at least $10 million, and pre-tax income of at least $750,000 in the last fiscal year or in two of the three prior fiscal years. In the case of an issuer that is unable to satisfy the earning criteria stated in Section 101 of the Company Guide, the Exchange will require the issuer to have the following:

(1)Assets in excess of $200 million and stockholders' equity of at least $10 million; or

(2)assets in excess of $100 million and stockholders' equity of at least $20 million. The Exchange concluded, pursuant to its evaluation of the nature and complexity of the product pursuant to Section 107A, not to issue a circular regarding member firm compliance responsibilities because the notes are issued in $1,000 denominations and are categorized as debt. Telephone conference between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Division, Commission, on August 24, 2004 (pertaining to issuance of a circular to members). 8 The Exchange's continued listing guidelines are set forth in Sections 1001 through 1003 of Part 10 to the Exchange's Company Guide. Section 1002(b) of the Company Guide states that the Exchange will consider removing from listing any security where, in the opinion of the Exchange, it appears that the extent of public distribution or aggregate market value has become so reduced to make further dealings on the Exchange inadvisable. With respect to continued listing guidelines for distribution of the Notes, the Exchange will rely, in part, on the guidelines for bonds in Section 1003(b)(iv) because the Notes are issued in $1,000 denominations. Section 1003(b)(iv)(A) provides that the Exchange will normally consider suspending dealings in, or removing from the list, a security if the aggregate market value or the principal amount of bonds publicly held is less than $400,000. 9 A negative return of the S&P 500 will reduce the redemption amount at maturity with the potential that the holder of the Note could lose his entire investment. Accordingly, the Notes are not “principle protected,” and are fully exposed to any decline in the level of the S&P 500. The cash payment that a holder or investor of a Note will be entitled to receive (the “Redemption Amount”) depends entirely on the value of the S&P 500 at the close of the market on the valuation date, which will be four

(4)business days prior to the maturity date 10 of the Notes (the “Final Level”), and the closing value of the S&P 500 on the date the Notes are priced for initial sale to the public (the “Initial Level”). 10 If the maturity date is not a trading day or if a market disruption event occurs on such day, the valuation date will be the next following trading day on which no market disruption event has occurred. A “market disruption event” is defined as:

(i)The occurrence of a suspension, absence or material limitation of trading of 20% or more of the component stocks of the Index on the primary market for more than two hours of trading or during the one-half hour period preceding the close of the principal trading session on such primary market;

(ii)a breakdown or failure in the price and trade reporting systems of any primary market as a result of which the reported trading prices for 20% or more of the component stocks of the Index during the last one-half hour preceding the close of the principal trading session on such primary market are materially inaccurate;

(iii)the suspension, material limitation or absence of trading on any major securities market for trading in futures or options contracts or exchange traded funds related to the Index for more than two hours of trading or during the one-half hour period preceding the close of the principal trading session on such market; and

(iv)a determination by Wachovia Securities that any event described in clauses (i)-(iii) above materially interfered with the ability of Wachovia or any of its affiliates to unwind or adjust all or a material portion of the hedge position with respect to the Notes. If the Final Level is greater than the Initial Level, the Redemption Amount per Unit will equal: EN31AU04.030 If the Final Level is less than or equal to the Initial Level, the Redemption Amount per Unit will equal: EN31AU04.031 The Notes are cash-settled in U.S. dollars and do not give the holder any right to receive a portfolio security, dividend payments or any other ownership right or interest in the portfolio or index of securities comprising the S&P 500. The Notes are designed for investors who want to participate or gain exposure to the S&P 500, subject to a cap, and who are willing to forego market interest payments on the Notes during such term. The Commission has previously approved the listing of options on, and securities, the performance of which have been linked to or based on, the S&P 500 Index. 11 11 *See* Securities Exchange Act Release Nos. 50019 (July 14, 2004), 69 FR 43635 (July 21, 2004) (approving the listing and trading of notes (Morgan Stanley PLUS) linked to the S&P 500); 48486 (September 11, 2003), 68 FR 54758 (September 18, 2003) (approving the listing and trading of CSFB Contingent Principal Protection Notes on the S&P 500); 48152 (July 10, 2003), 68 FR 42435 (July 17, 2003) (approving the listing and trading of a UBS Partial Protection Note linked to the S&P 500); 47983 (June 4, 2003), 68 FR 35032 (June 11, 2003) (approving the listing and trading of a CSFB Accelerated Return Notes linked to S&P 500); and 47911 (May 22, 2003), 68 FR 32558 (May 30, 2003) (approving the listing and trading of notes (Wachovia TEES) linked to the S&P 500). As of July 15, 2004, the market capitalization of the securities included in the S&P 500 ranged from a high of $352.199 billion to a low of $0.738 billion. The average daily trading volume for these same securities for the last six

(6)months ranged from a high of 9.507 million shares to a low of .943 million shares. Because the Notes are issued in $1000 denominations, the Amex's existing debt floor trading rules will apply to the trading of the Notes. Pursuant to Amex Rule 411, the Exchange will impose a duty of due diligence on its members and member firms to learn the essential facts relating to every customer prior to trading the Notes. 12 With respect to suitability recommendations and risks, the Exchange will require members, member organizations and employees thereof recommending a transaction in the Notes:

(1)To determine that such transaction is suitable for the customer, and

(2)to have a reasonable basis for believing that the customer can evaluate the special characteristics of, and is able to bear the financial risks of such transaction. In addition, Wachovia will deliver a prospectus in connection with the initial sales of the Notes. 12 Amex Rule 411 requires that every member, member firm or member corporation use due diligence to learn the essential facts, relative to every customer and to every order or account accepted. The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Notes. Specifically, the Amex will rely on its existing surveillance procedures governing equities, which have been deemed adequate under the Act. In addition, the Exchange also has a general policy that prohibits the distribution of material, non-public information by its employees. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act 13 in general and furthers the objectives of Section 6(b)(5) 14 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest. 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange did not receive any written comments on the proposed rule change. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include SR-Amex-2004-57 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to SR-Amex-2004-57. 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 Commissions 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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the Amex. 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 SR-Amex-2004-57 and should be submitted on or before September 21, 2004. IV. Commission's Findings and Order Granting Approval of Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b)(5) of the Act. 15 The Commission has approved the listing of securities with a structure similar to that of the Notes. 16 Accordingly, the Commission finds that the listing and trading of the Notes based on the Index is consistent with the Act and will promote just and equitable principles of trade, foster cooperation and coordination with person engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions securities, and, in general, protect investors and the public interest consistent with Section 6(b)(5) of the Act. 17 15 *Id.* 16 *See* Securities Exchange Act Release Nos. 48152 (July 10, 2003), 68 FR 42435 (July 17, 2003) (approving the listing and trading of the UBS Partial Protection Note linked to the Index); 47983 (June 4, 2003), 68 FR 35032 (June 11, 2003) (approving the listing and trading of a CSFB Accelerated Return Notes linked to Index); 47911 (May 22, 2003), 68 FR 32558 (May 30, 2003) (approving the listing and trading of notes (Wachovia TEES) linked to the Index); 31591 (December 18, 1992), 57 FR 60253 (December 18, 1992) (approving the listing and trading of Portfolio Depositary Receipts based on the Index); 30394 (February 21, 1992), 57 FR 7409 (March 2, 1992) (approving the listing and trading of a unit investment trust linked to the Index) (SPDR); 27382 (October 26, 1989), 54 FR 45834 (October 31, 1989) (approving the listing and trading of Exchange Stock Portfolios based on the value of the Index); and 19907 (June 24, 1983), 48 FR 30814 (July 5, 1983) (approving the listing and trading of options on the Index). 17 15 U.S.C. 78f(b)(5). In approving this rule, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). The Notes will provide investors who are willing to forego market interest payments during the term of the Notes with means to participate or gain exposure to the Index, subject to the Capped Value. The Notes are non-convertible debt securities whose prices will be derived and based upon the Initial Level. The Commission notes that the Notes will not have a minimum principal investment amount that will be repaid, and payment on the Notes prior to or at maturity may be less than the original issue price of the Notes. At maturity, if the Final Value of the S&P 500 is greater than the Initial Value, the performance of the Note is leveraged on the “upside.” In other words, the investor will receive, for each Note a payment equal to the $1,000 principal amount plus double the percent increase in the value of the S&P 500, subject to the Capped Value of $1,125 or 12.5% of the issue price. However, if the S&P 500 declines from the Initial Value, then the investors will receive proportionately less than the original issue price of the Notes. The return on the notes, however, is not leveraged on the downside. Thus, the Notes are non-principal protected instruments, but are not leveraged on the downside. The level of risk involved in the purchase or sale of the Notes is similar to the risk involved in the purchase or sale of traditional common stock. Because the final level of return of the Notes is derivatively priced and based upon the performance of an index of securities; because the Notes are debt instruments that do not guarantee a return of principal; and because investors' potential return is limited by the Capped Value, if the value of the Index has increased over the term of such Note, there are several issues regarding the trading of this type of product. However, for the reasons discussed below, the Commission believes the Exchange's proposal adequately addresses the concerns raised by this type of product. The Commission notes that the protections of Section 107A of the Company Guide were designed to address the concerns attendant on the trading of hybrid securities like the Notes. In particular, by imposing the hybrid listing standards, suitability, disclosure and compliance requirements noted above, the Commission believes the Amex has addressed adequately the potential problems that could arise from the hybrid nature of the Notes. The Commission notes that Wachovia will deliver a prospectus in connection with the initial sales of the Notes. In addition, the Commission notes that Amex will incorporate and rely upon its existing surveillance procedures governing equities, which have been deemed adequate under the Act. In approving the product, the Commission recognizes that the Index is a capitalization-weighted index 18 of 500 companies listed on Nasdaq, the NYSE, and the Amex. The Exchange represents that the Index will be determined, calculated, and maintained by S&P. As of July 15, 2004, the market capitalization of the securities included in the S&P 500 ranged from a high of $352.199 billion to a low of $0.738 million. The average daily trading volume for these same securities for the last six

(6)months ranged from a high of 9.507 million shares to a low of .943 shares. 18 *See supra* note 5. Given the large trading volume and capitalization of the compositions of the stocks underlying the Index, the Commission believes that the listing and trading of the Notes that are linked to the Index should not unduly impact the market for the underlying securities compromising the Index or raise manipulative concerns. 19 As discussed more fully above, the underlying stocks comprising the Index are well-capitalized, highly liquid stocks. Moreover, the issuers of the underlying securities comprising the Index are subject to reporting requirements under the Act, and all of the component stocks are either listed or traded on, or traded through the facilities of, U.S. securities markets. Additionally, the Amex's surveillance procedures will serve to deter as well as detect any potential manipulation. 19 The issuer Wachovia disclosed in the prospectus that the original issue price of the Notes includes commissions (and the secondary market prices are likely to exclude commissions) and Wachovia's costs of hedging its obligations under the Notes. These costs could increase the initial value of the Notes, thus affecting the payment investors receive at maturity. The Commission expects such hedging activity to be conducted in accordance with applicable regulatory requirements. Furthermore, the Commission notes that the Notes are depending upon the individual credit of the issuer, Wachovia. To some extent this credit risk is minimized by the Exchange's listing standards in Section 107A of the Company Guide which provide the only issuers satisfying substantial asset and equity requirements may issue securities such as the Notes. In addition, the Exchange's “Other Securities” listing standards further require that the Notes have a market value of at least $4 million. 20 In any event, financial information regarding Wachovia in addition to the information on the 500 common stocks comprising the Index will be publicly available. 21 20 *See* Company Guide Section 107A. 21 The Commission notes that the 500 component stocks that comprise the Index are reporting companies under the Act, and the Notes will be registered under Section 12 of the Act. The Commission also has a systemic concern, however, that a broker-dealer such as Wachovia, or a subsidiary providing a hedge for the issuer will incur position exposure. However, as the Commission has concluded in previous orders for other hybrid instruments issued by broker-dealers, 22 the Commission believes that this concern is minimal given the size of the Notes issuance in relation to the net worth of Wachovia. 22 *See* Securities Exchange Act Release Nos. 44913 (October 9, 2001), 66 FR 52469 (October 15, 2001) (order approving the listing and trading of notes whose return is based on the performance of the Nasdaq-100 Index) (File No. SR-NASD-2001-73); 44483 (June 27, 2001), 66 FR 35677 (July 6, 2001) (order approving the listing and trading of notes whose return is based on a portfolio of 20 securities selected from the Amex Institutional Index) (File No. SR-Amex-2001-40); and 37744 (September 27, 1996), 61 FR 52480 (October 7, 1996) (order approving the listing and trading of notes whose return is based on a weighted portfolio of healthcare/biotechnology industry securities) (File No. SR-Amex-96-27). Finally, the Commission notes that the value of the Index will be disseminated at least once every fifteen seconds throughout the trading day. The Commission believes that providing access to the value of the Index at least once every fifteen seconds throughout the trading day is extremely important and will provide benefits to investors in the product. The Commission finds good cause for approving the proposed rule change prior to the 30th day after the date of publication of the notice of filing thereof in the **Federal Register** . The Exchange has requested accelerated approval because this product is similar to several other instruments currently listed and traded on the Amex. 23 The Commission believes that the Notes will provide investors with an additional investment choice and that accelerated approval of the proposal will allow investors to begin trading the Notes promptly. Additionally, the Notes will be listed pursuant to Amex's existing hybrid security listing standards as described above. Therefore, the Commission finds good cause, consistent with Section 19(b)(2) of the Act, 24 to approve the proposal on an accelerated basis. 23 *See supra* note 11. 24 15 U.S.C. 78f(b)(5) and 78s(b)(2). V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 25 that the proposed rule change (SR-Amex-2004-57) is hereby approved on an accelerated basis. 25 15 U.S.C. 78 *o* -3(b)(6) and 78s(b)(2). For the Commission by the Division of Market Regulation, pursuant to delegated authority. 26 26 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E4-1982 Filed 8-30-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50237; File No. SR-NYSE-2004-37] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Procedures for Gapping the Quote August 24, 2004. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on July 2, 2004, the New York Stock Exchange (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The proposed rule change has been filed by the NYSE as a “non-controversial” rule change pursuant to Rule 19b-4(f)(6) under the Act. 3 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The NYSE proposes to describe its new procedures for gapping the quote. The proposed rule text consists of NYSE Information Memo 04-27 (June 9, 2004), which the Exchange previously sent out to its members and member organizations. The text of the proposed rule change is available for viewing on the Commission's Web site, *http://www.sec.gov/rules/sro.shtml* , and at the Exchange and the Commission. 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 NYSE believes that its auction market provides valuable opportunities to price transactions fairly to all investors in a way that truly reflects supply and demand. According to the Exchange, at the moment of that pricing, transparency of any imbalance is critical to attract participation to offset the imbalance and facilitate price discovery. In that regard, the NYSE is updating its policies with respect to situations involving gapping the quote to achieve greater transparency in light of faster market conditions and technology. The Exchange believes that the procedures that are being updated will provide improved opportunities for all market participants to access the NYSE market and serve customers, improving transparency in situations where gapped quotations are used. Background The purpose of the proposed rule change is to discuss the procedures for gapping the quote, as currently described in Information Memo 94-32 (August 9, 1994) 4 and the 2003 Floor Official Manual. 5 The modification involves a new procedure for specifying the size in gapped quoting situations, making the size of the gapped quote 100 shares × size or size × 100 shares, instead of 100 shares × 100 shares. In addition, the new procedure shortens the reasonable period of time for the gapped quotation to remain in place in light of faster market conditions and technology. 6 4 The Exchange filed Information Memo 94-32 in File No. SR-NYSE-93-48. *See* Securities Exchange Act Release No. 34303 (July 1, 1994), 59 FR 35157 (July 8, 1994). 5 *See* NYSE Floor Official Manual at page 38. 6 All other procedures and requirements set forth in NYSE Information Memo 94-32 and File No. SR-NYSE-93-48 remain unchanged and in effect. *See* Securities Exchange Act Release No. 34303 (July 1, 1994), 59 FR 35157 (July 8, 1994). Telephone conversation between Jeffery Rosenstrock, Senior Special Counsel, Market Surveillance-Rule Development, and Kelly Riley, Assistant Director, Division of Market Regulation, Commission, on August 12, 2004. According to the Exchange, the purpose of the gapped quote procedures is to provide public dissemination of an order imbalance and to minimize short-term price dislocation associated with such imbalance by allowing appropriate time for the entry of offsetting orders or the cancellation of orders on the side of the imbalance. An imbalance may occur when the specialist receives a sudden influx of orders on the same side of the market at the same time or when there are one or more large-size orders and there is no offsetting interest. An imbalance may also occur when a member proposes to effect a one-sided block transaction at a significant premium or discount from the prevailing market. When an imbalance exists, the gapped quote procedures provide that the specialist widen the spread between the bid and offer, a process known as “gapping.” In such cases, the quote on the side of the imbalance must match (“touch”) the prior sale price. Once a quotation has been gapped, it should remain in place for a reasonable time to allow interested parties to respond to the order imbalance. A Floor Governor, Executive Floor Official, or Senior Floor Official oversees and provides input into the gapped quote process. Prior Practice Formerly, the gapped quote procedures provided that the specialist show the size associated with the gapped quotation as 100 × 100 and a senior-level Floor Official determined a reasonable period of time for the gapped quotation to be maintained (generally, not to exceed 5 minutes), to allow for adequate public disclosure and sufficient time to attract contra-side interest. New Procedures To Accelerate Price Discovery In order to provide more useful information and accelerate price discovery, the Exchange is updating the gapped quotation procedures to require that the specialist disseminate a quote size of 100 shares on only one side of the market. Size consistent with the order imbalance is to be shown on the other side, *i.e.* , 100 × size or size × 100. The 100-share side represents the specialist's determination of the price at which the stock would trade if no contra-side interest develops or no cancellations occur as a result of the gapped quotation. This determination takes into account executable orders on the book at better prices than the price of the 100-share bid or offer. The size side represents the extent of the order imbalance, which can represent orders of members in the crowd as well as SuperDot® (“DOT”) orders. Under the new procedures, when a gapped quotation situation arises, the specialist must: • Complete all related Display Book reports of transactions that have been consummated to honor the existing firm quotation, and check the status of the order imbalance (to see whether it has increased or decreased); • Gap the quotation: —On the side of the imbalance, make the bid or offer price, as appropriate, touch the last sale; and —Show the size of the imbalance in that bid or offer size; —On the side opposite the imbalance, show the possible extent of price impact in the bid or offer price, as appropriate; and —Make the size on that side of the market one round lot; • Consult with a Floor Governor, Executive Floor Official, or Senior Floor Official as to how to proceed; • Promptly contact known contra-side parties; and • Continue to permit the entry and cancellation of orders in the Display Book. The procedures provide that a gapped quotation should remain in place for a reasonable time to allow for interested parties to respond to the order imbalance. What constitutes a reasonable time is determined by the unique circumstances of each gapped quotation situation. However, the gapped quotation generally should last at least 30 seconds unless offsetting interest is received earlier, and generally should not exceed two minutes, 7 unless circumstances require otherwise. 7 NYSE Rule 123D provides that with respect to a trading halt, a minimum of five minutes must elapse between the publication of the initial indication and the stock's reopening. In the event that more than one indication was published, the stock may re-open three minutes after the last indication was published, provided that at least five minutes had elapsed from the publication of the initial indication. *See* NYSE Information Memo 03-5 (February 27, 2003) and Securities Exchange Act Release No. 47104 (December 30, 2002), 68 FR 597 (January 6, 2003) (File No. SR-NYSE-2002-39) (decreasing the minimum number of minutes that must elapse from 10 minutes to 5 minutes for the first indication, and from 5 minutes to 3 minutes for subsequent indications, provided that the minimum 5 minutes has elapsed since the first price indication). The Exchange represents that these time limits guide Floor Officials as to what may be an appropriate duration of a gapped quote. The Floor Governor, Executive Floor Official, or Senior Floor Official shall determine whether to: • Execute the orders immediately; • Direct the specialist to maintain the gapped quotation beyond 30 seconds, but no more than two minutes, unless circumstances require otherwise, in order to allow time for contra-side interest to develop or cancellations to occur; or • Halt trading in the stock. Under Exchange Rule 60(e), as described in Information Memo 03-21 (May 15, 2003), in a situation involving the use of the new gapped quote procedures, specialists will not be required to modify the 100-share side of the quotation to post better priced buy or sell limit orders or add to size during the reasonable gapped quote period. Example At 2:10 P.M., the market in XYZ is $76.45 bid for 2,000 shares, 5,000 shares offered at $76.50 with the last sale at $76.47. The specialist receives a sudden influx of orders through the system and from floor brokers to buy 370,000 shares at the market. The specialist executes a portion of the buy order imbalance against the 5,000 shares offered to honor the firm quote. 5,000 shares at $76.50 are reported to the consolidated tape and the related floor reports are issued. The specialist then gaps the quote, making the market $76.50 bid for 365,000 shares, 100 shares offered at $78.00. Note that this gapped quotation meets all of the requirements discussed above. The bid price touches the last sale. The size of the imbalance, which was reduced when the specialist took the offer, is published as the bid size. The offer price indicates the possible extent of the impact of the buy imbalance on the price of the stock. Lastly, the offer size is shown as 100 shares to indicate that there is insufficient interest on the sell side of the market. Autoquote Feature When the specialist disseminates a 100-share quote on one side of the market (100 × size or size × 100) where the 100-share side represents the specialist's bid or offer, the autoquote feature is temporarily not available on that side of the market for the limited period of the gapped quote. However, the side of the market displaying size will continue to be subject to autoquoting. NYSE Direct+ (“Direct+”) Auto ex orders will continue to trade with and will reduce the size of the side of the market where the imbalance is being shown. Auto ex executions will not take place on the side of the market showing 100 shares. 8 8 Under Exchange Rule 1000(iv), an auto ex order shall receive an immediate, automatic execution against orders reflected in the Exchange's published quotation and shall be immediately reported as NYSE transactions, unless, with respect to a single-sided auto ex order, the NYSE's published bid or offer is 100 shares. Inappropriate Use of Manual 100-Share Market The Exchange believes that it would not be appropriate for a specialist to repeat or continue to disseminate the manual 100-share by 100-share market as that could have the effect of not displaying or quoting a limit order (unless executed or cancelled) until after 30 seconds. Changes to the Exchange's Direct+ facility and market structure may affect the procedures described herein. However, until rule changes are submitted to the Commission for comment and review, and approval and implementation, the procedures described above will remain in place. 9 9 The Commission notes that the NYSE filed a proposal to change its Direct+ facility and market structure, which was published for comment in the **Federal Register** on August 16, 2004. *See* Securities Exchange Act Release No. 50173 (August 10, 2004), 69 FR 50407 (August 16, 2004) (File No. SR-NYSE-2004-05). The new procedures on gapping the quote are described in Information Memo 04-27, which has been sent to all members and member organizations. 10 10 The Commission notes that the proposed rule change was not effective until filed with the Commission on July 2, 2004. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act, 11 in general, and furthers the objectives of section 6(b)(5) of the Act, 12 in particular, in that it is designed to promote just and equitable principles of trade and to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, according to the Exchange, is not designed to permit unfair discrimination between customers, brokers, or dealers, or to regulate by virtue of any authority matters not related to the administration of the Exchange. 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments were neither solicited nor received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because, the foregoing proposed rule change

(1)does not significantly affect the protection of investors or the public interest;

(2)does not impose any significant burden on competition; and

(3)by its terms, does not become operative until 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, and the Exchange provided the Commission with written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission, it has become effective pursuant to section 19(b)(3)(A) of the Act 13 and Rule 19b-4(f)(6) thereunder. 14 13 15 U.S.C. 78s(b)(3)(A). 14 17 CFR 240.19b-4(f)(6). The NYSE has requested that the Commission waive the 30-day operative delay. The Commission believes waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Acceleration of the operative date will allow the Exchange to transition to the new gapped quoting procedures, which provide more information regarding imbalances, without delay. For these reasons, the Commission designates the proposal to be effective and operative upon filing with the Commission. 15 At any time within 60 days of the filing of this proposed rule change, the Commission may summarily abrogate 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. 15 For purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 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 e-mail to *rule-comments@sec.gov* . Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File Number SR-NYSE-2004-37. 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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. 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-NYSE-2004-37 and should be submitted on or before September 21, 2004. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E4-1979 Filed 8-30-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50231; File No. SR-PCX-2004-70] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Pacific Exchange, Inc. Relating to the PCX Equities, Inc.'s Ability To Waive an Examination Requirement for an ETP Applicant August 23, 2004. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on August 4, 2004, the Pacific Exchange, Inc. (“PCX” or “Exchange”), through its wholly-owned subsidiary PCX Equities, Inc. (“PCXE”), filed with the Securities and Exchange Commission (“Commission” or “SEC”) the proposed rule change as described in Items I and II below, which Items have been prepared by the PCX. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The PCX is proposing to adopt a rule permitting the Exchange to waive the examination requirement for an Equity Trading Permit (“ETP”) applicant if the applicant can show that an appropriate basis exists for waiving this requirement. The text of the proposed rule change is as follows: New text is *italicized* ; deleted text is in [brackets]. Rules of PCX Equities, Inc. Rule 2 Equity Trading Permits Denial of or Conditions to ETPs Rule 2.4(b) (1-9)—No change.

(10)does not successfully complete [such written proficiency] examinations as required by the Corporation to [enable it to examine and] verify the applicant's qualifications to function in [one or more of the] capacities *covered by the application* [applied for]; Series 7 Requirement

(A)Traders of ETP Holders for which the Corporation is the Designated Examining Authority (“DEA”) must successfully complete the *Series 7 Examination* . [General Securities Registered Representative Examination (Test Series 7), if the primary business of the ETP Holder involves the trading of securities that is unrelated to the performance of the functions of a registered Market Maker. Unless required to complete the Series 7 under Rule 7.21(b)(2), the following are exempt from the requirement to successfully complete the Series 7 Examination:] ETP Holders [who are] performing the function of a registered Market Maker [(]pursuant to Rule 7 *.21(b)(2)[)] are exempt from this requirement.* For purposes of this Rule:

(i)The term “trader” means a person

(a)Who is directly or indirectly compensated by an ETP Holder, or who is any other associated person of an ETP Holder and

(b)who trades, makes trading decisions with respect to, or otherwise engages in the proprietary or agency trading of securities. [; and

(ii)The term “primary business” means greater than 50% of the ETP Holder's business.

(B)Each ETP Holder for which the Corporation is the DEA must complete, on an annual basis, and on a form prescribed by the Corporation, a written attestation as to whether the ETP Holder's primary business is conducted in the performance of the function of a registered Market Maker (pursuant to Rule 7).] [(C)] *(B)* The requirement to complete the Series 7 Examination will apply to current traders of ETP Holders that meet the criteria of subsection (A), above, as well as to future traders of ETP Holders that meet the criteria of subsection (A), above, at a later date. Traders of ETP Holders that meet the criteria of subsection (A), above, at the time of SEC approval of this Rule, must successfully complete the Series 7 Examination within six months of notification by the Corporation. Rule 2.4(b) (11-13)—No change.

(c)The Corporation may waive or modify a required examination *for any Trader who has been a member of a self regulatory organization within six months of applying for trading privileges under an ETP if appropriate basis for an exemption from a required examination exists based on the following standards of evidence regarding an applicant's qualifications:* [for any applicant if, within two years of the date of such applicant applied to the Corporation for an ETP, such applicant has successfully completed a comparable examination administered by a self-regulatory organization or the Securities and Exchange Commission.] *(1) length and quality of securities industry experience or professional experience in investment related fields;* *(2) specific registration requested by the applicant and type of business to be conducted in relation to the applicant's experience;* *(3) previous registration history with the Corporation and nature of any pre-existing regulatory matters; and* *(4) other examinations (e.g. Series 1 Examination) taken by the applicant that may be acceptable substitutes in conjunction with securities industry experience.* *Within fifteen calendar days after the Corporation reviews a request for a waiver of the examination requirement, the Corporation shall provide the applicant with a written determination of whether the waiver was granted or denied. If the Corporation denies the request for a waiver, the notice shall include a statement with the reasons for the denial. An applicant whose request for a waiver is denied may appeal the decision of the Corporation in accordance with the terms and conditions of Rule 10.13.* Rule 2.4(d-f)—No change. 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 PCX 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 PCX has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Purpose The Exchange is proposing to amend PCXE Rule 2.4(b)-(c) to allow the Exchange to waive the examination requirement for an ETP applicant if the Exchange believes the applicant is qualified based upon the applicant's industry experience, the type of registration requested, the previous history of the applicant with the PCX and any other examinations the applicant has successfully completed that may be considered acceptable substitutes. The Exchange is also proposing to make certain technical changes to PCXE Rule 2.4(b)(10) so that the Rule for ETP applicants is similar to the existing rule for individuals who apply for an Options Trading Permit (“OTP”). The Exchange believes that the proposed changes will bring the PCX examination requirements up to date and make the PCX's requirements similar to those at other SROs. 3 The Exchange notes that the proposed waiver is similar to one recently approved by the Commission for individuals who apply for an OTP at the PCX. 4 3 *See* Philadelphia Stock Exchange Rule 620(a) and (b), the American Stock Exchange Rule 353, and the Boston Stock Exchange Rule Chapter 15, Section (1)(b)(3). 4 *See* Securities Exchange Act Release No. 49922 (June 28, 2004), 69 FR 40701 (July 6, 2004). Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 5 in general, and furthers the objectives of Section 6(b)(5), 6 in particular, because it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments and perfect the mechanisms of a free and open market and to protect investors and the public interest. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act, 7 and subparagraph (f)(6) of Rule 19b-4, 8 thereunder because it does not:

(i)Significantly affect the protection of investors or the public interest;

(ii)impose any significant burden on competition; and

(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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. 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b-4(f)(6). The PCX has requested that the Commission waive the 30-day operative delay so that the proposed rule change will become immediately effective upon filing. The Commission believes waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission believes that accelerating the operative date will permit the Exchange to implement the changes to its examination requirements without undue delay. The Commission notes that it previously approved a similar proposed rule change for options trading on PCX and therefore the instant proposed rule change should not raise any new regulatory issues. 9 Accordingly, the Commission designates the proposal to be effective and operative upon filing with the Commission. 10 9 *See* Securities Exchange Act Release No. 49922 (June 28, 2004), 69 FR 40701 (July 6, 2004) (SR-PCX-2003-51). 10 For the purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 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 e-mail to *rule-comments@sec.gov* . Please include File Number SR-PCX-2004-70 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File No. SR-PCX-2004-70. 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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the PCX. 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-PCX-2004-70 and should be submitted on or before September 21, 2004. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E4-1978 Filed 8-30-04; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION Privacy Act of 1974, as Amended; Computer Matching Program (SSA/Centers for Medicare and Medicaid Services

(CMS)Match Number 1094) AGENCY: Social Security Administration (SSA). ACTION: Notice of renewal of an existing computer matching program which expired on September 21, 2003. The next match is scheduled to take place in November 2004. SUMMARY: In accordance with the provisions of the Privacy Act, as amended, this notice announces the renewal of an existing computer matching program that SSA is currently conducting with CMS. DATES: SSA will file a report of the subject matching program with the Committee on Governmental Affairs of the Senate, the Committee on Government Reform of the House of Representatives and Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). The renewal of the matching program will be effective as indicated below. ADDRESSES: Interested parties may comment on this notice by either telefax to

(410)965-8582 or writing to the Associate Commissioner for Income Security Programs, 245 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401. All comments received will be available for public inspection at this address. FOR FURTHER INFORMATION CONTACT: The Associate Commissioner for Income Security Programs as shown above. SUPPLEMENTARY INFORMATION: A. *General:* The Computer Matching and Privacy Protection Act of 1988 (Public Law (Pub. L.) 100-503) amended the Privacy Act (5 U.S.C. 552a) by establishing the conditions under which computer matching involving the Federal government could be performed and adding certain protections for individuals applying for and receiving Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) further amended the Privacy Act regarding protections for such individuals. The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:

(1)Negotiate written agreements with the other agency or agencies participating in the matching programs;

(2)Obtain the Data Integrity Boards” approval of the match agreements;

(3)Publish notice of the computer matching program in the **Federal Register** ;

(4)Furnish detailed reports about matching programs to Congress and OMB;

(5)Notify applicants and beneficiaries that their records are subject to matching; and

(6)Verify match findings before reducing, suspending, terminating, or denying an individual's benefits or payments. B. *SSA Computer Matches Subject to the Privacy Act:* We have taken action to ensure that all of SSA's computer matching programs comply with the requirements of the Privacy Act, as amended. Dated: August 19, 2004. Martin H. Gerry, Deputy Commissioner for Disability and Income Security Programs. Notice of Computer Matching Program, Social Security Administration

(SSA)with the Centers for Medicare and Medicaid Services

(CMS)A. *Participating Agencies:* SSA and CMS. B. *Purpose of the Matching Program:* The purpose of this matching program is to establish the conditions, safeguards and procedures under which CMS agrees to disclose Medicare non-utilization data to SSA. In some instances, if an individual has not used Medicare benefits for an extended period of time, this may indicate that the individual is deceased. SSA will use the selected data as an indicator of cases that should be reviewed to determine continued eligibility to SSA-administered programs. C. *Authority for Conducting the Matching Program:* Sections 202 (42 U.S.C. 402) and 205(c) (42 U.S.C. 405(c)) of the Social Security Act. D. *Categories of Records and Individuals Covered by the Matching Program:* SSA will periodically furnish CMS with an electronic finder file containing Title II Claim Account Number

(CAN)and Title II Beneficiary Identification Code

(BIC)of beneficiaries from SSA's file of Master Beneficiary Records (SSA/OEEAS 60-0090) who receive Medicare. SSA will request CMS to match the finder file against their National Claims History (09-70-0005) and the Enrollment Database (09-70-0502) and release an electronic file to SSA containing certain identifying information on enrollees who have not used Medicare for a specified period of a least 12 consecutive months. E. *Inclusive Dates of the Matching Program:* The matching program shall become effective no sooner than 40 days after notice for the program is sent to Congress and OMB, or 30 days after publication of this notice in the **Federal Register** , whichever date is later. The matching program will continue for 18 months from the effective date and may be extended for an additional 12 months thereafter, if certain conditions are met. [FR Doc. 04-19815 Filed 8-30-04; 8:45 am]

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