Fed. Reg. Notices — SECURITIES AND EXCHANGE COMMISSION

BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50834; File No. SR-BSE-2004-55] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by the Boston Stock Exchange, Inc. Relating to Trading Hours for Options Contracts Overlying the Nasdaq 100 Index Trading Stock® on the Boston Options Exchange December 10, 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 December 1, 2004, the Boston Stock Exchange, Inc.

(“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. On December 3, 2004, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Exchange filed the proposal, as amended, as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 4 and Rule 19b-4(f)(6) thereunder. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 superseded and replaced the proposed rule change in its entirety. 4 15 U.S.C. 78s(b)(3)(A)(iii). 5 17 CFR 240.19b-4(f)(6).

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend a section of the Boston Options Exchange (“BOX”) rules regarding the hours during which options transactions may be made on BOX. The text of the proposed rule change, as amended, is set forth below. Proposed new language is in *italics.* CHAPTER V. DOING BUSINESS ON BOX Sec. 1-2 No Change Sec. 3 Days and Hours of Business

(a)No change.

(b)Except for unusual conditions as may be determined by the Board, hours during which transactions in options on individual stocks may be made on BOX shall correspond to the normal business days and hours for business set forth in the rules of the primary market trading the securities underlying BOX options; provided, however, that transactions may be effected in an options class on BOX until two

(2)minutes after the primary market on which the underlying security trades closes for trading. (See BSE Rules Chapter I-B, “Business Hours”, Section 1, “Primary Session”). *Notwithstanding the foregoing, transactions may be effected in options contracts overlying the Nasdaq 100 Index Trading Stock® on BOX until 4:15 p.m.*

(c)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 Exchange included statements concerning the purpose of, and statutory 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to permit the hours during which options contracts overlying the Nasdaq 100 Index Trading Stock® (the “Index Trading Stock”) may be made on BOX to remain unchanged after the Index Trading Stock lists on the Nasdaq Stock Market (“Nasdaq”) beginning December 1, 2004. Prior to December 1, 2004, the Index Trading Stock was listed on the American Stock Exchange and trading in the options contracts overlying the Index Trading Stock traded on BOX until 4:15 p.m. Eastern Time. Currently, Chapter V, Section 3(b) of BOX's rules provides that hours during which transactions in options on individual stocks may be made on BOX shall correspond to the normal business days and hours for business set forth in the rules of the primary market trading the securities underlying BOX options; provided, however, that transactions may be effected in an options class on BOX until two

(2)minutes after the primary market on which the underlying security trades closes for trading. Because Nasdaq will trade the Index Trading Stock until 4 p.m. Eastern Time, under its current rules, BOX can only trade in the options contracts overlying the Index Trading Stock until 4:02 p.m. Eastern Time. BOX Market Makers have requested that BOX consider maintaining the status quo, and allow trading in options contracts overlying the Index Trading Stock to continue until 4:15 p.m. Eastern Time. The rules of other options exchanges currently provide for trading in these options contracts to continue until this time. 6 BOX believes the investment community would benefit from maintaining continuity and consistency in the marketplace. As a result, the Exchange proposes to amend Chapter V, Section 3(b) of BOX's rules to allow trading in options contracts overlying the Index Trading Stock to continue until 4:15 p.m. Eastern Time. 6 *See* Rule 7.1, commentary .02 of the rules of the Pacific Exchange. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, 7 in general, and Section 6(b)(5) of the Act, 8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 7 15 U.S.C. 78f(b). 8 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 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 The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change, as amended, as a “non-controversial” rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 9 and subparagraph (f)(6) of Rule 19b-4 thereunder. 10 The Exchange represents that the foregoing 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 for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the five-day pre-filing notice requirement and the 30-day operative delay period for “non-controversial” proposals and make the proposed rule change, as amended, effective and operative upon filing. 9 15 U.S.C. 78s(b)(3)(A)(iii). 10 17 CFR 240.19b-4(f)(6). The Commission has determined to waive the five-day pre-filing notice requirement and the 30-day operative delay period. 11 The Commission notes that accelerating the operative date will allow the trading hours for options contracts overlying the Index Trading Stock to remain unchanged and provide continuity to the marketplace. Therefore, the foregoing rule change has become immediately effective and operative upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 12 and Rule 19b-4(f)(6) thereunder. 13 11 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). 12 15 U.S.C. 78s(b)(3)(A)(iii). 13 17 CFR 240.19b-4(f)(6). 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. 14 14 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers that period to commence on December 3, 2004, the date the Exchange filed Amendment No. 1 to the proposed rule change. *See* 15 U.S.C. 78s(b)(3)(C). 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-BSE-2004-55 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 Number SR-BSE-2004-55. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 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 Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BSE-2004-55 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3701 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50840; File No. SR-CBOE-2004-79] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by the Chicago Board Options Exchange, Incorporated Relating to the Trading Hours for Options on Units and Options on the Nasdaq-100 Index Tracking Stock December 10, 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 November 30, 2004, the Chicago Board Options Exchange, Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. On December 10, 2004, the Exchange filed Amendment No. 1 to the proposed rule change. 3 The Exchange filed the proposal, as amended, as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 4 and Rule 19b-4(f)(6) thereunder. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 is incorporated into this notice. 4 15 U.S.C. 78s(b)(3)(A)(iii). 5 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules relating to the hours of trading for options on Units 6 and options on the Nasdaq-100 Index Tracking Stock. The text of the proposed rule change is set forth below. 6 ``Units'' are defined in Interpretation and Policy .06 to CBOE Rule 5.3. Proposed new language is in *italics.* Proposed deletions are in brackets. CHAPTER VI Doing Business on the Exchange Floor (Rule 6.1-6.85) Section A: General Rule 6.1—Days and Hours of Business. Rule 6.1.—No Change. * * * Interpretations and Policies: .01-.02 No Change. .03 *Options on Units, as defined under Interpretation and Policy .06 to Rule 5.3, and options on the Nasdaq-100 Index Tracking Stock may be traded on the Exchange until 3:15 p.m. each business day.* *.04* The Board of Directors has determined that the Exchange will not be open for business on New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day or Christmas Day. The Board has also determined that, when any holiday observed by the Exchange falls on a Saturday, the Exchange will not be open for business on the preceding Friday, and that when any holiday observed by the Exchange falls on a Sunday, the Exchange will not be open for business on the following Monday, unless unusual business conditions exist at the time. *.05* [.04] No Change. Rule 6.2-6.85 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 Exchange included statements concerning the purpose of, and statutory basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant 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 The Exchange proposes to amend CBOE Rule 6.1 (``Days and Hours of Business'') by adding a new Interpretation and Policy .03 that will codify CBOE's practice of trading options on Units 7 and options on the Nasdaq-100 Index Tracking Stock (``QQQs'') until 3:15 p.m. (CST). Since CBOE began trading options on Units and options on the QQQs, the trading hours for these options have lasted until 3:15 p.m. (CST). 7 Interpretation and Policy .06 to CBOE Rule 5.3 provides the listing standards for Units and other similar types of products. The 3:15 p.m. termination time coincides with the trading hours termination time for options on stock indexes, including options on the NDX index. Recently, the Nasdaq Stock Market, Inc. (``Nasdaq'') announced its intention to transfer the listing of the QQQs from the American Stock Exchange (``Amex'') to Nasdaq with trading to begin on December 1, 2004. The QQQs traded on the Amex until 3:15 p.m. (CST), and as of December 1, 2004, Nasdaq will close trading on the QQQs at 3 p.m. (CST), but will allow trading in the QQQs to continue in after hours trading until 7 p.m. (CST). CBOE intends to continue to trade options on the QQQs during its regular trading session until 3:15 p.m. (CST), as it does options on other index or basket products. CBOE notes that the Amex and the Pacific Exchange, Inc. (``PCX'') are allowed under their respective rules to specifically trade options on QQQs until 3:15 p.m. (CST). 8 The new Interpretation and Policy .03 will codify CBOE's longstanding practice of trading options on QQQs and Units until 3:15 p.m. (CST). CBOE represents that this will serve to avoid any confusion in the marketplace over the trading hours of QQQs options in light of Nasdaq's shift of the listing venue of QQQs and to codify the trading hours for options on Units and on QQQs. 8 *See* Commentary .02 to Amex Rule 1 and Commentary .02 to PCX Rule 7.1. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, 9 in general, and Section 6(b)(5) of the Act, 10 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition 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 No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change, as amended, as a ``non-controversial'' rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 11 and subparagraph (f)(6) of Rule 19b-4 thereunder. 12 The Exchange represents that the foregoing 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 for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the five-day pre-filing notice requirement and the 30-day operative delay period for ``non-controversial'' proposals and make the proposed rule change, as amended, effective and operative upon filing. 11 15 U.S.C. 78s(b)(3)(A)(iii). 12 17 CFR 240.19b-4(f)(6). The Commission has determined to waive the five-day pre-filing notice requirement and the 30-day operative delay period. 13 The Commission notes that accelerating the operative date will allow the trading hours for options on Units and options on the QQQs to remain unchanged and provide continuity to the marketplace. Therefore, the foregoing rule change has become immediately effective and operative upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 14 and Rule 19b-4(f)(6) thereunder. 15 13 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). 14 15 U.S.C. 78s(b)(3)(A)(iii). 15 17 CFR 240.19b-4(f)(6). 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. 16 16 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers that period to commence on December 10, 2004, the date the Exchange filed Amendment No. 1 to the proposed rule change. *See* 15 U.S.C. 78s(b)(3)(C). 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-CBOE-2004-79 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 Number SR-CBOE-2004-79. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 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 Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2004-79 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3700 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50837; File No. SR-CBOE-2004-76] Self Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange, Inc. Relating to a DPM and Market-Maker Transaction Fee in Options on the Mini-Nasdaq-100 Index December 10, 2004. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder 2 notice is hereby given that on November 23, 2004, the Chicago Board Options Exchange, Inc. (“CBOE” or the “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 CBOE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self Regulatory Organization's Statement of the Terms and Substance of the Proposed Rule Change CBOE proposes to amend its Fee Schedule to establish a $.10 per contract license fee on all Designated Primary Market-Maker and market-maker contracts traded in options on the Mini-Nasdaq-100 Index (“MNX”). The text of the proposed rule change is available at the Office of the Secretary, CBOE and at 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, CBOE 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 CBOE 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, Proposed Rule Change 1. Purpose The Exchange proposes to establish a $.10 per contract license fee on all Designated Primary Market-Maker (“DPM”) and market-maker contracts traded in MNX options. Currently, the MNX DPM is charged a $.25 per contract supplemental transaction fee for transactions for its proprietary account, in addition to the regular transaction fee of $.24 per contract. The $.25 per contract supplemental transaction fee is charged to the DPM to assist the Exchange in offsetting some of the royalty fees that the Exchange must pay to the Nasdaq Stock Market (“Nasdaq”) for its license to trade the MNX product. 3 3 Securities Exchange Act Release No. 43226 (August 29, 2000), 65 FR 54322 (September 7, 2000) (SR-CBOE-00-33). On November 23, 2004, MNX options will begin trading on the Exchange's Hybrid Trading System (“Hybrid”). In light of MNX options moving to the Hybrid system, the Exchange has determined to spread the license fee obligation among all market-makers in the MNX trading crowd, including the DPM. Instead of assessing only the MNX DPM a supplemental fee of $.25 per contract, the Exchange proposes to assess the MNX DPM and all MNX market-makers a license fee of $.10 per contract (in addition to the regular transaction fee of $.24 per contract) to help the Exchange meet its license fee obligation to Nasdaq. The Exchange believes that the proposed license fee results in a more equitable allocation of the MNX license fee obligation in MNX's new Hybrid Trading System environment. The proposed license fee is consistent with similar license fees that the Exchange has previously implemented to recover license costs for the RUT and DJX option classes. 4 The Exchange intends to implement this license fee on December 1, 2004. 4 Securities Exchange Act Release No. 49601 (April 22, 2004), 69 FR 23836 (April 30, 2004) (SR-CBOE-2004-19) (RUT license fee), and Securities Exchange Act Release Act No. 48223 (July 24, 2003), 68 FR 44978 (July 31, 2003) (SR-CBOE-2003-26) (DJX license fee). 2. Statutory 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)(4) of the Act 6 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A)(ii) 7 of the Act and subparagraph (f)(2) of Rule 19b-4 8 thereunder. 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)(ii). 8 17 CFR 240.19b-4(f)(2). 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-CBOE-2004-76 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 Number SR-CBOE-2004-76. 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 CBOE. 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-CBOE-2004-76 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3703 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50839; File No. SR-ISE-2004-39] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 by the International Securities Exchange, Inc., Relating to the Hours of Trading for Options on Fund Shares, Including the Nasdaq 100 Tracking Stock December 10, 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 December 2, 2004, the International Securities Exchange, Inc. (“Exchange” or “ISE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. On December 6, 2004, the Exchange filed Amendment No. 1 to the proposed rule change, and on December 9, 2004, the Exchange filed Amendment No. 2 to the proposed rule change. 3 The Exchange filed the proposed rule change, as amended, as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 4 and Rule 19b-4(f)(6) thereunder. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 The substance of Amendment Nos. 1 and 2 is incorporated into this notice. 4 15 U.S.C. 78s(b)(3)(A)(iii). 5 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change ISE proposes to codify its existing policy relating to hours of trading for options on certain Fund Shares, including the Nasdaq 100 Tracking Stock (“QQQ”). The text of the proposed rule change, as amended, is set forth below. Proposed new language is in *italics.* Proposed deletions are in brackets. Rule 700. Days and Hours of Business The Board shall determine the days the Exchange shall be open for business (referred to as “business days”) and the hours of such days during which transactions may be made on the Exchange. No Member shall make any bid, offer, or transaction on the Exchange before or after such hours.

(a)Except for unusual conditions as may be determined by the Board, hours during which transactions in options on individual stocks may be made on the Exchange shall correspond to the normal business days and hours for business set forth in the rules of the primary market trading the stocks underlying Exchange options; provided, however, that transactions may be effected in an options class on the Exchange until two

(2)minutes after the primary market on which the underlying stock trades closes for trading. *(b) Options on Fund Shares, as defined in Rule 502(h), may be traded on the Exchange until 4:15 p.m. each business day.* [(b)] *(c)* The Exchange shall not be open for business on the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day or Christmas Day. When any holiday observed by the Exchange falls on a Saturday, the Exchange will not be open for business on the preceding Friday. When any holiday observed by the Exchange falls on a Sunday, the Exchange will not be open for business on the following Monday, unless unusual business conditions exist at the time. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, ISE included statements concerning the purpose of, and statutory 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. ISE 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 1. Purpose The purpose of this proposed rule change is to amend ISE Rule 700 (“Days and Hours of Business”) by adding a new subsection

(b)that will codify ISE's practice of trading options on certain Fund Shares, including the QQQ, until 4:15 p.m. (New York Time). The 4:15 p.m. termination coincides with the trading hours termination time for options on stock indexes. Recently, the Nasdaq Stock Market, Inc. (“Nasdaq”) announced its intention to transfer the listing of the QQQ from the American Stock Exchange (“Amex”) to Nasdaq, effective as of the opening of trading on December 1, 2004. QQQ previously traded on the Amex until 4:15 p.m., but as of December 1, 2004, Nasdaq closes trading in the QQQ at 4 p.m., but will allow trading in the QQQ to continue in after hours trading until 8 p.m. ISE intends to continue to trade options on the QQQ during its regular trading session until 4:15 p.m., as it does options on certain other Fund Shares and indexes. ISE notes that Amex and the Pacific Exchange, Inc. (“PCX”) trade options on QQQ until 4:15 p.m. (New York Time) under their respective rules. 6 The new proposed subsection

(b)to ISE Rule 700 will codify ISE's longstanding practice of trading options on QQQ and certain Fund Shares until 4:15 p.m. The ISE submits that this rule change will serve to avoid any confusion in the marketplace over the trading hours of QQQ options in light of Nasdaq's shift of the listing venue of QQQ and to codify the trading hours for options on certain Fund Shares and on QQQ. 6 *See* Commentary .02 to Amex Rule 1 and Commentary .02 to PCX Rule 7.1. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, 7 in general, and Section 6(b)(5) of the Act, 8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not 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 The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change, as amended, as a “non-controversial” rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 9 and subparagraph (f)(6) of Rule 19b-4 thereunder. 10 The Exchange represents that the foregoing 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 for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the five-day pre-filing notice requirement and the 30-day operative delay period for “non-controversial” proposals and make the proposed rule change, as amended, effective and operative upon filing. 9 15 U.S.C. 78s(b)(3)(A)(iii). 10 17 CFR 240.19b-4(f)(6). The Commission has determined to waive the five-day pre-filing notice requirement and the 30-day operative delay period. 11 The Commission notes that accelerating the operative date will allow the trading hours for options on the QQQ to remain unchanged and provide continuity to the marketplace. Therefore, the foregoing proposed rule change has become immediately effective and operative upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 12 and Rule 19b-4(f)(6) thereunder. 13 11 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). 12 15 U.S.C. 78s(b)(3)(A)(iii). 13 17 CFR 240.19b-4(f)(6). 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. 14 14 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers that period to commence on December 9, 2004, the date the Exchange filed Amendment No. 2 to the proposed rule change. *See* 15 U.S.C. 78s(b)(3)(C). 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-ISE-2004-39 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 Number SR-ISE-2004-39. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 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 Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2004-39 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3702 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50838; File No. SR-NASD-2004-128] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Granting Approval of Proposed Rule Change To Modify the Annual Fee for Certain Issuers Listed on the Nasdaq Stock Market, Inc. December 10, 2004. I. Introduction On August 25, 2004, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to modify the annual fee for domestic and foreign issuers (other than American Depositary Receipts) listed on the Nasdaq National Market and for all issuers listed on The Nasdaq SmallCap Market. The proposed rule change was published for notice and comment in the **Federal Register** on October 28, 2004. 3 The Commission received no comments in response to the proposal as published in the **Federal Register.** The Nasdaq Office of General Counsel, however, received one comment letter before the proposal was published for comment. 4 This order approves the proposed rule change as filed. 1 15 U.S.C. 78s(b)(1). 2 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 50577 (Oct. 21, 2004), 69 FR 62926 (Oct. 28, 2004). Footnote number 3 of the release incorrectly identified Mr. Golub; his correct information is: Arnold Golub, Office of General Counsel, Nasdaq. 4 *See* letter from Dorrance W. Lamb, Chief Financial Officer, Performance Technologies, Inc., to Nasdaq Office of General Counsel, dated October 20, 2004. II. Summary of Comments The Nasdaq's Office of General Counsel received one letter in response to an e-mail it sent to listed issuers, before the proposal was published in the **Federal Register,** notifying listed issuers of the planned rule filing and the potential fee increase. 5 The commenter did not file a comment on the proposal with the Commission; however, the Nasdaq forwarded the letter to the Commission and the Commission placed the letter in the public file. The commenter opposed the proposed increase in the annual fee and expressed concern over the fee for the listing of additional shares. In particular, the commenter opined that the fee charged for listing additional shares unfairly burdens listed issuers who reissue treasury shares as a result of stock option exercises and, accordingly, can result in total fees consistent with, or more than, the fees charged to listed issuers with a higher range of total shares outstanding. 5 *See id.* The proposal was published in the **Federal Register** on October 28, 2004, eight days after the date of Performance Technologies, Inc.'s letter to Nasdaq. III. The Nasdaq's Response to the Comment The Nasdaq acknowledged the commenter's concerns, but explained that the Nasdaq does not charge the fee for listing additional shares in connection with the reissuance of treasury shares. 6 Further, the Nasdaq affirmed that the proposed fee schedule does not, by its terms, preference any class of listed issuers, but rather applies equally to all similarly situated listed issuers. 7 The Nasdaq also noted that issuers falling into a higher total shares outstanding category similarly would be subject to the fee for listing additional shares, which fee would be proportionate to their total shares outstanding. 8 The Commission believes that the Nasdaq's response to the commenter's concerns is reasonable. 6 Telephone conference between Arnold Golub, Office of General Counsel, Nasdaq, and Richard Holley, Attorney, Division of Market Regulation, Commission, on December 3, 2004. 7 *See id.* 8 *See id.* IV. Discussion and Commission Findings 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 association, 9 and, in particular, the requirements of Section 15A(b)(5) of the Act. 10 The Commission believes that the proposed rule change will result in the equitable allocation of annual fees among listed issuers. The Commission notes that the Nasdaq plans to use the proposed fee increase to support its ongoing costs of issuer services and to fund future product and service investments. 9 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78 *o* -3(b)(5). V. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 11 that the proposed rule change (SR-NASD-2004-128) be, and it hereby is, approved. 11 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3706 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50828; File No. SR-NYSE-2004-66] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the New York Stock Exchange, Inc. To Extend the Pilot for Its Automatic Execution Facility for Certain Limit Orders (NYSE Direct+ ® ) December 9, 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 November 22, 2004, the New York Stock Exchange, Inc. (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“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. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend until December 23, 2005 the effectiveness of the pilot program (“Pilot”) for NYSE Direct+ ® (“Direct+”). The Pilot was initially approved on a one-year basis and subsequently extended until December 23, 2004. 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In light of the fact that the Commission is still considering the Exchange's proposed enhancements to Direct+ (“hybrid market proposal”), 3 the Exchange seeks to extend the Pilot as it currently operates for an additional year until December 23, 2005. Direct+ was originally approved as a one-year pilot ending on December 21, 2001. 4 The Pilot was subsequently extended for three additional one-year periods, and is currently scheduled to end on December 23, 2004. 5 3 *See* Securities Exchange Act Release Nos. 50173 (August 10, 2004), 69 FR 50407 (August 16, 2004) and 50667 (November 15, 2004), 69 FR 67980 (November 22, 2004) (SR-NYSE-2004-05). 4 *See* Securities Exchange Act Release No. 43767 (December 22, 2000), 66 FR 834 (January 4, 2001) (SR-NYSE-00-18). 5 *See* Securities Exchange Act Release Nos. 45331 (January 24, 2002), 67 FR 5024 (February 1, 2002) (SR-NYSE-2001-50); 46906 (November 25, 2002), 67 FR 72260 (December 4, 2002) (SR-NYSE-2002-47); and 48772 (November 12, 2003), 68 FR 65756 (November 21, 2003) (SR-NYSE-2003-30). The Pilot provides for the automatic execution of limit orders of 1099 shares or less (“auto ex orders”) against trading interest reflected in the Exchange's published quotation. It is not mandatory that all limit orders of 1099 shares be entered as auto ex orders; rather, the member organization entering the order, or its customer if enabled by the member organization, can choose to enter an auto ex order when such member organization (or customer) believes that the speed and certainty of an execution at the Exchange's published bid or offer price is in its customer's best interest. The Exchange proposes to extend the Pilot for an additional year until December 23, 2005. Four filings which impact Direct+ and that have been approved by the Commission during the current Pilot are now part of the Pilot. 6 These filings are set forth below. 6 In addition, SR-NYSE-2003-20 proposed to disengage Direct+ in five actively-traded stocks on a pilot basis. However, this pilot expired on June 20, 2003 and, therefore, does not impact the Pilot as proposed to be extended. *See* Securities Exchange Act Release No. 47965 (June 2, 2003), 68 FR 34691 (June 10, 2003) (SR-NYSE-2003-20).

(a)A filing which amended NYSE Rule 1000 to provide that Direct+ executions would not be available if the resulting trade would be more than five cents away from the last sale. 7 The amendment also provided that during the process for completing NYSE Rule 127 transactions, the specialist should publish a bid and/or offer that is more than five cents away from the last reported transaction price in the subject security on the Exchange. 7 *See* Securities Exchange Act Release No. 47463 (March 7, 2003), 68 FR 12122 (March 13, 2003) (SR-NYSE-2002-44).

(b)A filing which

(i)amended NYSE Rule 13 to provide for a one-year pilot program (also expiring on December 23, 2004) to expand Direct+ order size eligibility (for up to 10,000 shares) for Exchange-Traded Funds (“ETFs”) and Holding Company Depositary Receipts (“HOLDRs”);

(ii)amended NYSE Rule 1002 to include ETFs and HOLDRs and provide that ETFs trade until 4:15 p.m.; and

(iii)amended NYSE Rule 1005 to reflect that the rule applies to ETFs and HOLDRs. 8 8 *See* Securities Exchange Act Release No. 47024 (December 18, 2002), 67 FR 79217 (December 27, 2002) (SR-NYSE-2002-37).

(c)A filing which amended NYSE Rule 1005 to permit entry of limit orders up to 1099 shares within 30 seconds for an account in which the same person has an interest, provided that the orders are entered from different terminals and that the member or member organization responsible for the entry of the orders to the trading floor has procedures to monitor compliance with the separate terminal requirement. 9 9 *See* Securities Exchange Act Release No. 47353 (February 12, 2003), 68 FR 8318 (February 20, 2003) (SR-NYSE-2002-58).

(d)A filing which amended NYSE Rules 1000 and 1001 in connection with the NYSE LiquidityQuote SM initiative. 10 In conjunction with autoquoting of bids and offers, NYSE Rule 1000 was amended to provide that a Direct+ order equal to or greater than the size of the published bid/offer would exhaust the entire bid/offer rather than decrease it to 100 shares, and NYSE Rule 1001(c) was deleted. 11 10 *See* Securities Exchange Act Release No. 47614 (April 2, 2003), 68 FR 17140 (April 8, 2003) (SR-NYSE-2002-55). 11 NYSE Rule 1001(c) formerly provided that if executions of auto ex orders have traded with all trading interest reflected in the Exchange's published bid or offer, the Exchange will disseminate a bid or offer at that price of 100 shares until the specialist requotes that market. The above-mentioned filings became part of the Direct+ rules and were incorporated into the Pilot upon their respective approvals by the Commission. 12 Therefore, the Exchange proposes that an extension of the Pilot for an additional year would also extend the above-mentioned filings as part of the Pilot. 12 *See* Amendment No. 1 to SR-NYSE-2002-47, *supra* note 5. However, if the Commission approves the hybrid market proposal during the extension of the Pilot period (December 24, 2004 to December 23, 2005), the Exchange proposes that the hybrid market proposal would supersede this filing. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 13 in general, and furthers the objectives of Section 6(b)(5) of the Act 14 in particular, because it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange also believes that the proposed rule change is designed to support the principles of Section 11A(a)(1) of the Act 15 in that it seeks to assure economically efficient execution of securities transactions, makes it practicable for brokers to execute investors' orders in the best market, and provides an opportunity for investors' orders to be executed without the participation of a dealer. 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78k-1(a)(1). 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 The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule 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 if consistent with the protection of investors and the public interest, provided that the self-regulatory organization has given the Commission 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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 16 and Rule 19b-4(f)(6) thereunder. 17 At any time within 60 days of the filing of such 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. 18 16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b-4(f)(6). 18 15 U.S.C. 78s(b)(3)(C). The Exchange requests that the Commission waive the five business days pre-filing requirement and the 30-day operative delay under Rule 19b-4(f)(6)(iii). 19 The Exchange believes that the continuation of the Pilot is in the public interest as it will avoid inconvenience and interruption to the public. 19 17 CFR 240.19b-4(f)(6)(iii). The Commission believes that waiver of the 30 days operative delay is consistent with the protection of investors and the public interest, 20 because it will allow the Exchange to continue, without interruption, the existing operation of its Pilot for an additional year, while the Commission considers the hybrid market proposal. Accordingly, the Commission designates that the proposal shall become operative as of the date of this notice. 20 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.* Please include File Number SR-NYSE-2004-66 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 Number SR-NYSE-2004-66. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 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-2004-66 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 21 21 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3704 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50830; File No. SR-PCX-2004-58] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Pacific Exchange, Inc. Relating to the Exchange's Rules Under the Minor Rule Plan and Recommended Fine Schedule December 9, 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 December 2, 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, II and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to amend the PCX Minor Rule Plan (“MRP”) and Recommended Fine Schedule (“RFS”). The text of the proposed rule change is below. Proposed new language is in *italics;* proposed deletions are in brackets. 3 3 PCX noted that there was a typographical error appearing in the proposed rule change. Note 1 should tie to PCX Rule 10.12(i) instead of Rule 10.12(k). PCX agrees to correct this error in an amendment to the rule filing to be filed prior to the expiration of the public comment period. Telephone conversation between Tania J.C. Blanford, Staff Attorney, PCX, and Jennifer C. Dodd, Attorney, Division of Market Regulation, Commission, on December 9, 2004. Rules of the Pacific Exchange, Inc. Rule 10 Disciplinary Proceedings and Appeals Minor Rule Plan Rule 10.12(a)-(g)—No change.

(h)Minor Rule Plan: Options Floor Decorum and Minor Trading Rule Violations. (1)-(44)—No change. *(45) Failure to maintain adequate procedures and controls to monitor and supervise the entry of electronic orders by Users to prevent the prohibited practices set forth in Rules 6.87(d) and 6.90(e). (Rules 6.87(c)(4) and 6.90(d)(3)).*

(i)No change.

(j)No change. Rule 10.12(k) Minor Rule Plan: Recommended Fine Schedule 1 1 Fines for multiple violations of Options Floor Decorum and Minor Trading Rules are calculated on a running two-year basis.

(i)Options Floor Decorum and Minor Trading Rule Violations. 1.-44.—No change. 45. *Failure to maintain adequate procedures and controls to monitor and supervise the entry of electronic orders by Users to prevent the prohibited practices set forth in Rules 6.87(d) and 6.90(e). (Rules 6.87(c)(4) and 6.90(d)(3)).* *1st Violation* *2nd Violation* *3rd Violation* *$1,000.00* *Full Disciplinary Proceeding* *Full Disciplinary Proceeding.* 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend PCX's MRP and RFS to add provisions for violations by an Order Entry Firm 4 of PCX Rules 6.87(c)(4) and 6.90(d)(3), which require Order Entry Firms to maintain adequate procedures and controls to monitor and supervise the entry of electronic orders. 5 Currently, the MRP sets forth penalties and sanctions for improperly dividing up an order to make its parts eligible for execution on Auto-Ex or PCX Plus. 6 The Exchange believes that the proposed amendments to its MRP and RFS are appropriate to include as part of the MRP and RFS since failure to monitor Users 7 regarding the entry of electronic orders corresponds to the violation of improperly dividing up an order to make its parts eligible for execution on Auto-Ex or PCX Plus. 4 *See* PCX Rule 6.87(a)(3). 5 PCX Rule 6.87(c)(4) requires Order Entry Firms to maintain adequate procedures and controls that will permit the Order Entry Firm to effectively monitor and supervise the entry of electronic orders by all Users. Order Entry Firms must monitor and supervise the entry of orders by Users to prevent prohibited practices set forth in PCX Rule 6.87(d). PCX Rule 6.90(d)(3) sets forth the equivalent requirement for Order Entry Firms with respect to PCX Plus. 6 *See* PCX Rules 10.12(h)(33) and 10.12(i)(33). 7 *See* PCX Rule 6.87(a)(2). The Exchange proposes a fine of $1,000 for the first violation for failure to maintain adequate procedures and controls to monitor and supervise the entry of electronic orders pursuant to PCX Rules 6.87(c)(4) and 6.90(d)(3). In lieu of proposing fines for a second and third violation, the Exchange proposes to treat subsequent violations as a formal disciplinary matter. A formal disciplinary proceeding would be appropriate to the extent that it addresses an Order Entry Firm's repeated failure to maintain proper procedures given that the Order Entry Firm has already been charged with an MRP violation. Thus, the Exchange believes that an Order Entry Firm's repeated failure to have proper procedures in place, which are essential for the monitoring and supervising of the entry of electronic orders, warrants a formal disciplinary proceeding. The Exchange believes that the proposed rule change will strengthen the ability of the Exchange to carry out its oversight responsibilities as a self-regulatory organization (“SRO”). The proposed rule change should also aid the Exchange in carrying out its surveillance and enforcement functions. The Exchange does not minimize the importance of compliance with these rules, and all other rules subject to the imposition of fines under the Exchange's MRP. The Exchange relies on its MRP as a tool to address enumerated violations to provide the Exchange with greater flexibility to address violations that may not require formal disciplinary proceedings. Under the proposed rules, the Enforcement Department would continue to exercise its discretion under Rule 10.12(f) and pursue certain cases as a formal disciplinary matter, and not within the MRP process, to the extent that the facts or circumstances warrant such action. 2. Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act, 8 in general, and Section 6(b)(5) of the Act, 9 in particular, in that it will promote just and equitable principles of trade; facilitate transactions in securities, remove impediments to and perfect the mechanisms of a free and open market and a national market system; and protect investors and the public interest. The proposal is also consistent with Sections 6(b)(6) 10 and 6(b)(7), 11 which require that members and persons associated with members are appropriately disciplined for violations of Exchange rules and are provided a fair procedure for disciplinary procedures. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). 10 15 U.S.C. 78f(b)(6). 11 15 U.S.C. 78f(b)(7). 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or

(ii)as to which the self-regulatory organization consents, the Commission will:

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

(B)institute proceedings to determine whether the proposed rule change should be disapproved. 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 *rules-comments@sec.gov.* Please include Filed No. SR-PCX-2004-58 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathon G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File No. SR-PCX-2004-58. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing will also 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 No. SR-PCX-2004-58 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3705 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50833; File No. SR-Phlx-2004-86] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to the Definition of an Exchange-Traded Fund Share December 10, 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 December 1, 2004, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II, below, which Items have been prepared by the Phlx. The Exchange filed the proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder. 4 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 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Phlx Rule 1000(b)(42) to include the Nasdaq-100 Index Tracking Stock 5 in its definition of “Exchange-Traded Fund Share.” The text of the proposed rule change is set forth below. 5 The Nasdaq-100®, Nasdaq-100 Index®, Nasdaq®, The Nasdaq Stock Market®, Nasdaq-100 Shares SM , Nasdaq-100 Trust SM , Nasdaq-100 Index Tracking Stock SM , and QQQ SM are trademarks or service marks of The Nasdaq Stock Market, Inc. (“Nasdaq”) and have been licensed for use for certain purposes by the Exchange pursuant to a License Agreement with Nasdaq. The Nasdaq-100 Index® (“Index”) is determined, composed, and calculated by Nasdaq without regard to Phlx, the Nasdaq-100 Trust SM , or the beneficial owners of Nasdaq-100 Shares SM . Nasdaq has complete control and sole discretion in determining, comprising, or calculating the Index or in modifying in any way its method for determining, comprising, or calculating the Index in the future. Proposed new language is in *italics.* Applicability, Definitions and References Rule 1000.

(a)No change.

(b)1.-41. No change. 42. Exchange-Traded Fund Share—For purposes of these Rules, the term Exchange-Traded Fund Share shall include the *Nasdaq-100 Index Tracking Stock and* Exchange-listed securities representing interests in open end unit investment trusts or open-end management investment companies that hold securities based on an index or a portfolio of securities. (c)-(d) 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 Phlx included statements concerning the purpose of, and statutory 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 Phlx 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 1. Purpose The Exchange proposes to amend the definition of an Exchange Traded Fund Share (“ETF”) to include the Nasdaq-100 Index Tracking Stock (“QQQ”) in order to preserve the Exchange's ability to trade options overlying QQQ until 4:15 p.m. ET and to be clear that throughout the Exchange's options rules, QQQ continues to be, by definition, an ETF. As of December 1, 2004, the QQQ has been listed and has begun trading on the Nasdaq under the new symbol QQQQ. Under the Exchange's current rule, because Nasdaq is not a national securities exchange as defined under the Act, QQQ does not qualify as an ETF, currently defined in Exchange Rule 1000(b)(42) as an “exchange-listed” security. The fact that QQQ is no longer an “exchange-listed” security (and therefore under the current rule is not by definition an ETF) affects the hours of trading in options overlying QQQ. The trading session for most equity options ends at 4:02 p.m. ET. However, pursuant to Exchange Rule 101, options overlying indexes and ETFs (such as QQQ) trade on the Phlx until 4:15 p.m. ET. Because QQQ is no longer included in the definition of an ETF, it would not be eligible for trading past 4:02 p.m. ET under current Exchange rules. In order to preserve the Exchange's ability to trade options overlying QQQ until 4:15 p.m. ET, the proposed rule change would specifically include reference to the Nasdaq-100 Index Tracking Stock in the definition of an ETF. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, 6 in general, and Section 6(b)(5) of the Act, 7 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 6 15 U.S.C. 78f(b). 7 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 inappropriate burden on competition 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 No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change as a “non-controversial” rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 8 and subparagraph (f)(6) of Rule 19b-4 thereunder. 9 The Exchange represents that the foregoing 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 for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the five-day pre-filing notice requirement and the 30-day operative delay period for “non-controversial” proposals and make the proposed rule change effective and operative upon filing. 8 15 U.S.C. 78s(b)(3)(A)(iii). 9 17 CFR 240.19b-4(f)(6). The Commission has determined to waive the five-day pre-filing notice requirement and the 30-day operative delay period. 10 The Commission notes that accelerating the operative date will allow the trading hours for options overlying the QQQ to remain unchanged and provide continuity to the marketplace. Therefore, the foregoing rule change has become immediately effective and operative upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 11 and Rule 19b-4(f)(6) thereunder. 12 10 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). 11 15 U.S.C. 78s(b)(3)(A)(iii). 12 17 CFR 240.19b-4(f)(6). 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. 13 13 15 U.S.C. 78s(b)(3)(C). 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-Phlx-2004-86 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 Number SR-Phlx-2004-86. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 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 Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2004-86 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3707 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50832; File No. SR-Phlx-2004-62] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval to Proposed Rule Change To Waive the Options Specialist Shortfall Fee for One Specialist Unit That Did Not Have a Specialized Quote Feed in Place December 9, 2004. On September 23, 2004, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 a proposed rule change to waive the options specialist shortfall fee for the period May 2004 through August 2004 for one specialist unit that did not have a specialized quoted feed in place that could price an option accurately for any option where the primary volume in the underlying security shifted to another market. The proposed rule change was published for comment in the **Federal Register** on November 1, 2004. 3 The Commission received no comments on the proposal. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 50591 (October 26, 2004), 69 FR 63427. 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 4 and, in particular, the requirements of section 6 of the Act 5 and the rules and regulations thereunder. The Commission finds specifically that the proposed rule change is consistent with section 6(b)(4) of the Act, 6 which requires that the rules of the exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. The Commission believes that failure to grant the proposed waiver would result in an inequitable application of the Exchange's options specialist shortfall fee for one particular specialist that, because of a unique situation, did not have a specialized quote feed in place for the period from May 1, 2004 through August 31, 2004. The Commission's decision to approve this waiver from the Phlx specialist shortfall fee is limited in scope to this particular specialist at this time. 7 4 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(4). 7 The waiver of the options specialist shortfall fee in this instance is fact-specific. Future requests for similar waivers, should any arise, must be filed for notice and comment pursuant to Section 19(b) of the Act. 15 U.S.C. 78s(b). *See also,* March 27, 2003 letter from Annette L. Nazareth, Director, Division of Market Regulation, Commission, to T. Grant Callery, Executive Vice President and General Counsel, National Association of Securities Dealers. *It is therefore ordered,* pursuant to section 19(b)(2) of the Act 8 , that the proposed rule change (SR-Phlx-2004-62) be, and it hereby is, approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3708 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50836; File No. SR-Phlx-2004-70] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Impose New License Fees and To Modify the Calculation of the Firm-Related Equity Option and Index Option Fee Cap December 10, 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 November 1, 2004, the Philadelphia Stock Exchange, Inc. (“Phlx” 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. On December 9, 2004, Phlx filed Amendment 1 to the proposed rule change. 3 Phlx filed this proposal pursuant to Section 19(b)(3)(A)(ii) 4 of the Act and Rule 19b-4(f)(2) 5 thereunder as a proposal establishing or changing a due, fee, or other charge imposed by the self-regulatory organization, which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Phlx made minor technical changes; clarified the calculation of the $50,000 cap (described below), specifically as it relates to the firm-related equity option and index option comparison and transaction charges for products without license fees and with license fees; and further clarified that applicable firm-related charges for the QCX, QCE, and FXI will not be counted towards the $50,000 cap. For purpose of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers that period to commence on December 9, 2004, the date that the Phlx filed Amendment No. 1. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to adopt various license fees to be assessed per contract side for equity option “firm” transactions (comprised of equity option firm/proprietary comparison transactions, equity option firm/proprietary transactions and firm/proprietary facilitation transactions). These license fees will be imposed after the Exchange's $50,000 “firm-related” equity option and index option comparison and transaction fee cap, described more fully below, is reached. In addition, the Exchange proposes to impose the normal (not fixed) firm-related equity option and index option comparison and transaction fees, if applicable, for certain options, which would not be subject to the $50,000 cap. The Exchange also proposes to make a minor change to its Summary of Equity Option Charges fee schedule. The text of the proposed rule change is available at Phlx and at 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 Phlx included statements concerning the purpose of and basis for its proposal and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. The Phlx 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 1. Purpose Current Fee Structure Currently, the Exchange imposes a cap of $50,000 per member organization 6 on all “firm-related” equity option and index option comparison and transaction charges combined. Specifically, such “firm-related” charges include equity option firm/proprietary comparison charges, equity option firm/proprietary transaction charges, equity option firm/proprietary facilitation transaction charges, index option firm (proprietary and customer executions) comparison charges, index option firm/proprietary transaction charges, and index option firm/proprietary facilitation transaction charges (collectively “firm-related charges”). 7 Thus, such firm-related charges for equity options and index options, in the aggregate for one billing month, may not exceed $50,000 per month per member organization. 6 The firm/proprietary comparison or transaction charge applies to member organizations for orders for the proprietary account of any member or non-member broker-dealer that derives more than 35% of its annual, gross revenues from commissions and principal transactions with customers. Member organizations will be required to verify this amount to the Exchange by certifying that they have reached this threshold by submitting a copy of their annual report, which was prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). In the event that a member organization has not been in business for one year, the most recent quarterly reports, prepared in accordance with GAAP, will be accepted. *See* Securities Exchange Act Release No. 43558 (November 14, 2000), 65 FR 69984 (November 21, 2000) (SR-Phlx-00-85). 7 On October 28, 2004, the Exchange submitted a proposed rule change to the Securities and Exchange Commission (“Commission”) to delineate two separate “firm” charges on the Summary of Index Option and FXI Option Charges fee schedule: firm/proprietary and firm/proprietary facilitation, to be more consistent with the reference to the firm transaction charges on the Exchange's Summary of Equity Option Charges. *See* Securities Exchange Act Release No. 50679 (November 16, 2004), 69 FR 68208 (November 23, 2004) (SR-Phlx-2004-69). The Exchange also imposes a license fee of $0.10 per contract side for equity option “firm” transactions on options on Nasdaq-100 Index Tracking Stock sm 8 traded under the symbol QQQ (“QQQ”) after the $50,000 cap, as described above, is reached. Therefore, when a member organization exceeds the $50,000 cap (comprised of combined firm-related charges), the member organization is charged $50,000, plus the QQQ license fee of $0.10 per contract side for any QQQ trades (if any) over those that were included in reaching the $50,000 cap. In other words, the $0.10 license fee is imposed in addition to the $50,000 cap, if the cap is reached, on firm-related transactions. 8 The Nasdaq-100 ®, Nasdaq-100 Index ®, Nasdaq ®, The Nasdaq Stock Market ®, Nasdaq-100 Shares SM , Nasdaq-100 Trust SM , Nasdaq-100 Index Tracking Stock SM , and QQQ SM are trademarks or service marks of The Nasdaq Stock Market, Inc. (“Nasdaq”) and have been licensed for use for certain purposes by the Phlx pursuant to a License Agreement with Nasdaq. The Nasdaq-100 Index ® (the “Index”) is determined, composed, and calculated by Nasdaq without regard to the Licensee, the Nasdaq-100 Trust SM , or the beneficial owners of Nasdaq-100 Shares SM . Nasdaq has complete control and sole discretion in determining, comprising, or calculating the Index or in modifying in any way its method for determining, comprising, or calculating the Index in the future. Proposed Changes to the $50,000 Firm Related Equity Option and Index Option Cap Proposed Fixed Fee Program The Exchange proposes to adopt the specific license fees per contract side for the following products for equity option firm transactions, which will be imposed after the $50,000 cap is reached: Product License fee per contract side Russell 1000 Growth iShares (“IWF”) $0.10 Russell 2000 iShares (“IWM”) 0.10 Russell 2000 Value iShares (“IWN”) 0.10 Russell 2000 Growth iShares (“IWO”) 0.10 Russell Midcap Growth iShares (“IWP”) 0.10 Russell Midcap Value iShares (“IWS”) 0.10 NYSE Composite Index (“NYC”) 0.10 NYSE U.S. 100 Index (“NY”) 0.10 Thus, when a member organization exceeds the $50,000 cap, the member organization will be charged $50,000 plus any applicable license fees listed above (as well as QQQ license fees) for any trades over those trades that were included in reaching the $50,000 cap. 9 9 Consistent with current practice, when calculating the $50,000 cap, the Exchange first calculates all equity option and index option transaction and comparison charges for products without license fees and then equity option transaction and comparison charges for products with license fees ( *i.e.* , QQQ license fees) that are assessed by the Exchange after the $50,000 cap is reached. *See* Securities Exchange Act Release No. 48459 (September 8, 2003), 68 FR 54034 (September 15, 2003) (SR-Phlx-2003-61, Exhibit 3). In addition, the Exchange proposes to impose the normal (not fixed) firm-related charges for the following three options: Full-size index options (“QCX”) and Mini index options (“QCE”) on the Nasdaq Composite Index, Inc.® 10 and options listed on the iShares FTSE/Xinhua China 25 Index Fund (“FXI Options”), 11 an exchange-traded fund. Thus, a member organization will be charged the applicable firm-related charges for the QCX, QCE or FXI, regardless of whether the $50,000 cap described above is reached, and these charges will not be counted towards the $50,000 cap. 10 The Nasdaq Composite Index ® is a registered trademark of The Nasdaq Stock Market, Inc., and is licensed for use by Phlx. 11 The Exchange began listing FXI Options, a product that is an equity option, on October 19, 2004, but are assessed fees pursuant to the Summary of Index Option and FXI Options Charges. *See* Securities Exchange Act Release No. 50676 (November 16, 2004), 69 FR 38206 (November 23, 2004) (SR-Phlx-2004-67). The fees set forth in this proposal are scheduled to become effective for transactions settling on or after November 1, 2004. The purpose of assessing the various license fees per contract side after reaching the $50,000 cap as described in this proposal is to help defray licensing costs associated with the trading of these products, while still capping member organizations' fees enough to attract volume from other exchanges. The purpose of allowing the QCE, QCX and FXI products to be charged the normal (not fixed) firm-related charges is to generate revenue (that was previously capped) because these are not the products in which the Exchange is seeking to attract firm-related volume from other exchanges. In addition to the foregoing, the Exchange proposes to make a minor change to its Summary of Equity Option Charges to delete the word “transaction” from the reference to the firm/proprietary facilitation option transaction charge and to delete reference to the QQQ license fees of $0.10 per contract side from the Summary of Index Option and FXI Options Charges, as this language is unnecessary. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 12 in general, and furthers the objectives of Section 6(b)(4) of the Act 13 in particular, in that it is an equitable allocation of reasonable dues, fees, and other charges among Exchange members and issuers and other persons using its facilities. 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(4). 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 No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposal has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 14 and Rule 19b-4(f)(2) 15 thereunder as a proposal establishing or changing a due, fee, or other charge imposed by the self-regulatory organization. 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. 16 14 15 U.S.C. 78s(b)(3)(A)(ii). 15 17 CFR 240.19b-4(f)(2). 16 *See supra* note 3. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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-Phlx-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 Number SR-Phlx-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 Room. Copies of such filing also will be available for inspection and copying at the principal office of the Phlx. 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-Phlx-2004-70 and should be submitted on or before January 7, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-3709 Filed 12-16-04; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [Declaration of Disaster #10003] State of North Carolina (NC-00001) Pender County and the contiguous counties of Bladen, Brunswick, Columbus, Duplin, New Hanover, Onslow, and Sampson in the State of North Carolina constitute a disaster area as a result of damages caused by tornadoes created from remnants of Hurricane Charley that occurred August 12-13, 2004. Applications for loans for physical damage as a result of this disaster may be filed until the close of business on February 8, 2005 and for economic injury until the close of business on September 9, 2005 at the address listed below or other locally announced locations: U.S. Small Business Administration, Disaster Area 1 Office, 360 Rainbow Blvd., South 3rd Floor, Niagara Falls, NY 14303. The interest rates are: Percent For Physical Damage: Homeowners With Credit Available Elsewhere: 6.375 Homeowners Without Credit Available Elsewhere: 3.187 Businesses With Credit Available Elsewhere: 5.800 Businesses and Non-Profit Organizations Without Credit Available Elsewhere: 2.900 Others (Including Non-Profit Organizations) With Credit Available Elsewhere: 4.875 For Economic Injury: Businesses and Small Agricultural Cooperatives Without Credit Available Elsewhere: 2.900 The number assigned to this disaster for physical damage is 10003 and for economic damage is 10004. (Catalog of Federal Domestic Assistance Program Nos. 59002 and 59008.) Dated: December 9, 2004. Hector V. Barreto, Administrator. [FR Doc. 04-27651 Filed 12-16-04; 8:45 am]

Notices. SECURITIES AND EXCHANGE COMMISSION