Notices. Notice of Social Security Ruling

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BILLING CODE 6325-49-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51155; File No. PCAOB-2004-02] Public Company Accounting Oversight Board; Order Approving Proposed Rule and Amendment No. 1 Amending Bylaws February 8, 2005. I. Introduction On November 12, 2004, the Public Company Accounting Oversight Board (the “Board” or the “PCAOB”) filed with the Securities and Exchange Commission (the “Commission”) proposed amendments to its bylaws, as modified by Amendment No. 1 to the proposed amendments, (PCAOB-2004-02) pursuant to Sections 101 and 107 of the Sarbanes-Oxley Act of 2002 (the “Act”), which clarify existing bylaw provisions and address certain internal operational and administrative matters.

Notice of the proposed bylaw amendments was published in the **Federal Register** on January 4, 2005. The Commission received no comment letters relating to the proposed bylaw amendments. For the reasons discussed below, the Commission is granting approval of the proposed bylaw amendments. II. Description Section 101(g)(1) of the Act directs the PCAOB to adopt rules to provide for the operation and administration of the Board, the exercise of its authority, and the performance of its responsibilities under the Act.

Pursuant to its organizational and rulemaking authority under the Act, the Board adopted a set of bylaws on January 3, 2003 to establish rules, standards and procedures for the conduct of the PCAOB's business affairs. On April 25, 2003, the Board amended the bylaws to specify the powers of the PCAOB's Chair. The Commission approved the Board's bylaws, as amended, on July 23, 2003. The Board adopted additional amendments to its bylaws on March 9, 2004 to clarify existing provisions and to cause the bylaws to address certain internal operational and administrative PCAOB matters, and submitted the proposed bylaw amendments to the Commission on March 18, 2004.

On October 26, 2004, the PCAOB adopted modifications to the proposed amendments, and submitted the proposed amendments, as modified, for Commission approval on November 12, 2004. Pursuant to the requirements of Section 107(b) of the Act and Section 19(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the Commission published the proposed amendments, as modified, for public comment on January 4, 2005. III. Discussion The Commission received no public comments relating to the PCAOB's proposed amendments to its bylaws.

The proposed amendments are intended to revise the PCAOB's bylaws to clarify existing provisions and to cause the bylaws to address certain internal operational and administrative PCAOB matters. The proposed amendments also are generally intended to make the bylaw provisions more consistent with District of Columbia and Internal Revenue Service provisions for nonprofit corporations and to make the Board's operations more transparent. IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed amendments to the Board's bylaws are consistent with the requirements of the Act and the securities laws and are necessary and appropriate in the public interest and for the protection of investors. *It is therefore ordered,* pursuant to Section 107 of the Act and Section 19(b)(2) of the Exchange Act, that the proposed bylaw amendments (File No.

PCAOB-2004-02) be and hereby are approved. By the Commission. Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-604 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51150; File No. SR-Amex-2005-017] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Suspension of the Specialist's and Registered Traders' Transaction Charges for the Trading of Nasdaq-100 Index Tracking Stock® February 8, 2005.

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 February 2, 2005, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, III below, which Items have been prepared by the Exchange. The Amex has designated the proposed rule change as “establishing or changing a due, fee, or other charge” under Section 19(b)(3)(A) of the Act, 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission.

The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Amex proposes to amend the Amex Equity and Exchange Traded Funds and Trust Issued Receipts Fee Schedules (“Amex Fee Schedules”) to extend the temporary suspension of the specialist's and registered traders' transaction charges for the trading of Nasdaq-100 Index Tracking Stock® (Symbol:

QQQQ) pursuant to the Nasdaq Unlisted Trading Privileges Plan. The text of the proposed rule change is available on the Amex's Web site (www.amex.com), at the Amex's Office of the Secretary, and at the Commission's Public Reference Room. 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 Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Effective December 1, 2004, the Nasdaq-100 Index Tracking Stock® listed on the Nasdaq Stock Market, Inc. It trades on Nasdaq under the symbol QQQQ.

The Amex trades the QQQQ on an unlisted trading privileges basis. The transaction charges for the specialist and registered traders are $0.0037 ($0.37 per 100 shares) and $0.0038 ($0.38 per 100 shares) respectively. These transaction charges are also subject to a $300 per trade maximum. The Amex, however, has suspended these charges through January 31, 2005. 5 The Amex now proposes to amend the Amex Fee Schedules to suspend the transaction charges for the specialist and registered traders until February 28, 2005.

The Exchange believes that this fee suspension would encourage competition among markets trading QQQQ and enhance the Amex's competitiveness in trading this security. 5 *See* Securities Exchange Act Release No. 50970 (January 6, 2005), 70 FR 2193 (January 12, 2005) (SR-Amex-2004-110). 2. Statutory Basis The Amex believes the proposed rule change is consistent with Section 6(b) of the Act, 6 in general, and furthers the objectives of Section 6(b)(4) of the Act, 7 in particular, in that it is intended to provide for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities. 6 15 U.S.C. 78f(b). 7 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. 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 foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, and, therefore, has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 8 and subparagraph (f)(2) of Rule 19b-4 thereunder. 9 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. 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 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-Amex-2005-017 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-Amex-2005-017. 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 Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2005-017 and should be submitted on or before March 8, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12).

Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-602 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51152; File No. SR-Amex-2005-016] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change Relating to the Extension of the Suspension of Customer Transaction Charges for the Trading of Nasdaq-100 Index Tracking Stock® February 8, 2005. 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 February 2, 2005, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange.

The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. In addition, the Commission is granting accelerated approval of the proposed rule change. 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 Amex proposes to amend the Amex Equity and Exchange Traded Funds and Trust Issued Receipts Fee Schedules (“Amex Fee Schedules”) to extend the suspension of customer transactions charges for the trading of Nasdaq-100 Index Tracking Stock® (Symbol:

QQQQ) pursuant to the Nasdaq Unlisted Trading Privileges Plan until February 28, 2005. 3 The text of the proposed rule change is available on the Amex's Web site ( *http://www.amex.com* ), at the Amex's Office of the Secretary, and at the Commission's Public Reference Room. 3 The Exchange also submitted a proposed rule change extending the suspension of the specialist's and registered traders' transaction charges for the trading of QQQQ. *See* File No. SR-Amex-2005-017. 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 had received on the proposed rule change.

The text of these statements may be examined at the places specified in Item III below. The Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Effective December 1, 2004, the Nasdaq-100 Index Tracking Stock® listed on the Nasdaq Stock Market, Inc. It trades on Nasdaq under the symbol QQQQ.

The Amex trades the QQQQ on an unlisted trading privileges basis. The Amex amended the Amex Fee Schedules to provide that the customer transaction charges in QQQQ will be $.0015 per share ($.15 per 100 shares), capped at $100 per trade. The Amex, however, has suspended these customer transaction charges through January 31, 2005. 4 The Amex is now proposing to extend the suspension of customer transaction charges until February 28, 2005. The Exchange believes that this fee suspension would encourage competition among markets trading QQQQ and enhance the Amex's competitiveness in trading this security. 4 *See* Securities Exchange Act Release No. 50969 (January 6, 2005), 70 FR 2191 (January 12, 2005) (SR-Amex-2004-111). 2.

Statutory Basis The Amex believes 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 intended to provide for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities. 7 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). 7 The Commission changed this sentence to reflect statutory basis for the proposed rule change pursuant to Section 6(b)(4) of the Act, rather than Section 6(b)(5).

Telephone conversation between Claire P. McGrath, Senior Vice President and Deputy General Counsel, Amex, and Theodore S. Venuti, Attorney, Division of Market Regulation, Commission (February 7, 2005). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition. 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. 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-Amex-2005-016 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-Amex-2005-016. 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 such filing also will be available for inspection and copying at the principal office of the Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR-Amex-2005-016 and should be submitted on or before March 8, 2005. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder, applicable to a national securities exchange. 8 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act, 9 in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities.

The Commission believes that the proposed change in customer transaction charges is not unreasonable and should not discriminate unfairly among market participants. 8 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(4). The Amex has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after publication of notice thereof in the **Federal Register** .

The Commission notes that granting accelerated approval of the proposal would allow the extension of the suspension of customer transactions charges for the trading of QQQQ to coincide with the extension of the suspension of transaction charges for the specialist and registered traders for the trading of QQQQ. 10 Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act, 11 for approving the proposed rule change prior to the thirtieth day after the date of publication of notice thereof in the **Federal Register.** 10 *See* File No.

SR-Amex-2005-017, *supra* note 3. 11 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 12 that the proposed rule change (SR-Amex-2005-016) is hereby approved on an accelerated basis. 12 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-603 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51148;

File No. SR-CBOE-2004-67] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change and Amendment No. 1 Thereto Relating to Split Price Priority February 8, 2005. On October 21, 2004, the Chicago Board Options Exchange, Incorporated (“CBOE”) 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 amend its split price priority rule.

On December 17, 2004, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change, as amended, was published for notice and comment in the **Federal Register** on January 3, 2005. 3 The Commission received no comment letters on the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 50924 (December 23, 2004), 70 FR 128. The proposed rule change would amend the Exchange's rule regarding split price transactions in open outcry generally to permit a member with an order for at least 100 contracts who buys (sells) at least 50 contracts at a particular price to have priority over all others in purchasing (selling) up to an equivalent number of contracts of the same order at the next lower (higher) price without being required to yield to existing customer interest in the limit order book.

The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 4 In particular, the Commission believes that the proposed rule change is consistent with Section 6(b)(5) of the Act, 5 which requires, among other things, that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and, in general, to protect investors and the public interest.

The Commission believes that the proposed rule change should encourage more aggressive quoting by market makers in competition for large-sized orders, and, in turn, lead to better-priced executions. The Commission notes that the proposed rule change includes interpretive language that clarifies that floor brokers who avail themselves of the split priority rule are obligated to ensure compliance with Section 11(a) of the Act. 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(b). *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 6 that the proposed rule change (SR-CBOE-2004-67), as amended, be hereby approved. 6 15 U.S.C. 78f(b)(5).

For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-600 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51147; File No. SR-CBOE-2005-15] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange, Inc., To Permit a Decrease of the Designated Primary Market-Maker Participation Entitlement for Certain Option Classes February 7, 2005.

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 January 31, 2005, the Chicago Board Options Exchange, Incorporated (“Exchange” or “CBOE”) 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 amend Rule 8.87 to permit the Exchange to decrease the Designated Primary Market-Maker (“DPM”) participation entitlement for certain option classes. The text of the proposed rule change follows. Additions are in *italics.* Chicago Board Options Exchange, Incorporated Rules Rule 8.87 Participation Entitlements of DPMs and e-DPMs

(a)Subject to the review of the Board of Directors, the MTS Committee may establish from time to time a participation entitlement formula that is applicable to all DPMs.

(b)The participation entitlement for DPMs and e-DPMs (as defined in Rule 8.92) shall operate as follows:

(1)Generally.

(i)To be entitled to a participation entitlement, the DPM/e-DPM must be quoting at the best bid/offer on the Exchange.

(ii)A DPM/e-DPM may not be allocated a total quantity greater than the quantity that the DPM/e-DPM is quoting at the best bid/offer on the Exchange.

(iii)The participation entitlement is based on the number of contracts remaining after all public customer orders in the book at the best bid/offer on the Exchange have been satisfied.

(2)Participation Rates applicable to DPM Complex. The collective DPM/e-DPM participation entitlement shall be: 50% when there is one Market-Maker also quoting at the best bid/offer on the Exchange; 40% when there are two Market-Makers also quoting at the best bid/offer on the Exchange; and, 30% when there are three or more Market-Makers also quoting at the best bid/offer on the Exchange.

(3)Allocation of Participation Entitlement Between DPMs and e-DPMs. The participation entitlement shall be as follows: If the DPM and one or more e-DPMs are quoting at the best bid/offer on the Exchange, the e-DPM participation entitlement shall be one-half (50%) of the total DPM/e-DPM entitlement and shall be divided equally by the number of e-DPMs quoting at the best bid/offer on the Exchange. The remaining half shall be allocated to the DPM. If the DPM is not quoting at the best bid/offer on the Exchange and one or more e-DPMs are quoting at the best bid/offer on the Exchange, then the e-DPMs shall be allocated the entire participation entitlement (divided equally between them). If no e-DPMs are quoting at the best bid/offer on the Exchange and the DPM is quoting at the best bid/offer on the Exchange, then the DPM shall be allocated the entire participation entitlement. If only the DPM and/or e-DPMs are quoting at the best bid/offer on the Exchange (with no Market-Makers at that price), the participation entitlement shall not be applicable and the allocation procedures under Rule 6.45A shall apply. . . . *Interpretations and Policies:* *.01 Notwithstanding subparagraph (b)(2) above, the Exchange may establish a lower DPM Complex Participation Rate on a product-by-product basis for newly-listed products or products that are being allocated to a DPM trading crowd for the first time. Notification of such lower participation rate shall be provided to members through a Regulatory Circular.* 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* CBOE Rule 8.87 governs the participation entitlement of DPMs and e-DPMs (the “DPM Complex”). Rule 8.87(b)(2) states the actual participation entitlement percentages applicable to the DPM Complex, which are tiered to take into account the number of non-DPM Market-Makers also quoting at the best price. The participation entitlement percentages are as follows: 50% when there is one Market-Maker also quoting at the best bid/offer on the Exchange; 40% when there are two Market-Makers also quoting at the best bid/offer on the Exchange; and 30% when there are three or more Market-Makers also quoting at the best bid/offer on the Exchange. This proposal would allow the Exchange to establish a lower participation right, on a product-by-product basis, for newly-listed options or for options that are being allocated to a DPM for the first time. The Commission has previously approved specialist entitlements as high as 40% (with three or more market-makers also quoting at the same price). This filing merely gives the Exchange the flexibility to implement a lower participation entitlement (something less than 30%) for the DPM Complex if the options are newly-listed or are being allocated to a DPM trading crowd (from a non-DPM trading crowd) for the first time. 2. *Statutory Basis* The Exchange believes that the proposed rule change is consistent with Section 6(b) 3 of the Act in general and furthers the objectives of Section 6(b)(5) 4 in particular, in that it should promote just and equitable principles of trade, serve to remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. 3 15 U.S.C. 78f(b). 4 15 U.S.C. 78f(b)(5). B. *Self-Regulatory Organization's Statement on Burden on Competition* The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. *Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others* 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 proposed rule does not

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

(ii)impose any significant burden on competition; or

(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 5 and Rule 19b-4(f)(6) 6 thereunder. 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) under the Act, 7 the proposal does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The CBOE has requested that the Commission waive the 30-day operative delay so that the proposed rule change becomes effective immediately. 8 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission notes that the proposal would give the Exchange the flexibility to establish lower participation guarantees than the Commission has approved in the past and would apply only to newly-listed products or products that are being allocated to a DPM trading crowd for the first time. Therefore, the Commission has determined to waive the 30-day delay and allow the proposed rule change to become operative immediately. 9 7 17 CFR 240.19b-4(f)(6)(iii). 8 The Exchange gave the Commission written notice of its intent to file the proposed rule change by notice on January 14, 2005. 9 For purposes only of waiving the operative delay of this proposal, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 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. 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 No. SR-CBOE-2005-15 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-2005-15. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. 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-2005-15 and should be submitted on or before March 8, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 Margaret H. McFarland, Deputy Secretary. 10 17 CFR 200.30-3(a)(12). [FR Doc. E5-601 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51156; File No. SR-DTC-2004-12] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Revise Fees for Low Volume Tender Offers February 8, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on November 19, 2004, the Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in items I, II, and III below, which items have been prepared primarily by DTC. 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). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change consists of fee revisions for low volume tender offers processed through the facilities of DTC. The low volume tender offer fee is payable by the offeror in advance of DTC's processing the offer and under the proposed rule change will be payable in advance of DTC's processing each extension of an offer. 2 2 For additional information concerning DTC's low volume tender offer fee, refer to Securities Exchange Act Release No. 41032 (February 9, 1999), 64 FR 7931 [File No. SR-DTC-99-01]. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, DTC 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. DTC has prepared summaries, set forth in sections (A), (B), and

(C)below, of the most significant aspects of these statements. 3 3 The Commission has modified the text of the summaries prepared by DTC.

(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to adjust the fees DTC charges for low volume tender offers so that the fees may be aligned with the estimated costs incurred by DTC with respect to low volume tender offers and extensions thereof. 4 DTC notes that certain offerors in low volume tender offers processed through DTC have extended the expiration of their offers multiple times. For tender offers other than low volume tender offers, extensions are unusual and multiple extensions almost never occur. With respect to low volume tender offers, however, DTC has seen offerors extend the offers as many as 15 times. Each extension involves significant processing costs for DTC. 4 The fee for low volume tender offers will be increased from a flat fee of $2,900 per offer to a fee of $2,900 per offer and per each extension thereof. DTC believes that the proposed rule change is consistent with the requirements of section 17A of the Act 5 and the rules and regulations thereunder applicable to DTC because the fees will be more equitably allocated among the users of these DTC services and products. 5 15 U.S.C. 78q-1.

(B)Self-Regulatory Organization's Statement on Burden on Competition DTC does not believe that the proposed rule change will have any impact or impose any burden on competition.

(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not yet been solicited or received. DTC will notify the Commission of any written comments received by DTC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five 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 ninety 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 *rule-comments@sec.gov.* Please include File Number SR-DTC-2004-12 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-DTC-2004-12. 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 DTC and on DTC's Web site at *http://www.DTC.org.* 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-DTC-2004-12 and should be submitted on or before March 8, 2005. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-620 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51154; File No. SR-NSCC-2003-21] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Withdrawal of a Proposed Rule Change Relating to the New Separately Managed Accounts Service February 8, 2005. On February 2, 2005, the National Securities Clearing Corporation (“NSCC”) withdrew proposed rule change SR-NSCC-2003-21 which had been filed with the Securities and Exchange Commission (“Commission”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 The purpose of the proposed rule was to add a new Rule 59 to NSCC's Rules to establish an information messaging system called the Separately Managed Accounts (“SMA”) Service. Notice of the proposal was published in the **Federal Register** on December 3, 2004. 2 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 48846 (November 26, 2003), 68 FR 67714. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 3 3 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-619 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51153; File No. SR-SCCP-2005-01] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by Stock Clearing Corporation of Philadelphia Relating to the Extension of Its Fee Waiver for Electronic Communications Networks February 8, 2005. 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 January 20, 2005, Stock Clearing Corporation of Philadelphia (“SCCP”) 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 SCCP. 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 purpose of the proposed rule change is to extend SCCP's existing fee waiver for ECN trades for an additional one-year period, through January 23, 2006, with the intention of attracting equity order flow from ECNs to the Exchange. SCCP believes that its current program is a reasonable method to attract large order flow providers such as ECNs to the Exchange and SCCP. Additional order flow should enhance liquidity and improve the Exchange's, and therefore SCCP's, competitive position in equity trading and processing. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, SCCP 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. SCCP 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 SCCP, pursuant to Section 19(b)(1) and Rule 19b-4 thereunder, 3 proposes to amend its schedule of fees to extend SCCP's current one-year pilot program for an additional one-year period, through January 23, 2006, in order to continue the existing SCCP fee waivers for SCCP participants for trades executed on the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) for Electronic Communications Networks (“ECNs”). 4 The current pilot program is scheduled to expire on January 23, 2005. 5 3 17 CFR 240.19b-4. 4 As stated on the SCCP fee schedule, ECNs shall mean any electronic system that widely disseminates to third parties orders entered therein by an Exchange market maker or over-the-counter (“OTC”) market maker, and permits such orders to be executed against in whole or in part; except that the term ECN shall not include: any system that crosses multiple orders at one or more specified times at a single price set by the ECN (by algorithm or by any derivative pricing mechanism) and does not allow orders to be crossed or executed against directly by participants outside of such times; or, any system operated by, or on behalf of, an OTC market maker or exchange market maker that executes customer orders primarily against the account of such market maker as principal, other than riskless principal. See SEC Rule 11Ac1-1(a)(8). 5 Securities Exchange Act Release No. 49189 (February 4, 2004), 69 FR 6713 (February 11, 2004) [File No. SR-SCCP-2004-01]. SCCP has implemented a fee waiver, since early 2001, 6 such that SCCP waives certain fees and charges, including trade recording fees, value fees, treasury transaction charges, charges for non-specialist Nasdaq 100 Trust, Series 1 (“QQQ”), 7 Standard & Poor's Depository Receipts® (“SPDRs”) 8 and DIAMONDS® Exchange Traded Funds (“DIAMONDS®”) 9 (collectively “ETF charges”) for ECN trades, 10 but not account fees, research fees, computer transmission/tape charges, or other charges on its fee schedule. At this time, SCCP proposes to continue this fee waiver through January 23, 2006. 6 Securities Exchange Act Release No. 45145 (December 10, 2001), 66 FR 65017 (December 17, 2001) [File No. SR-SCCP-2001-01]. 7 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 Philadelphia Stock Exchange 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. 8 Standard & Poor's®,” “S&P®,” “S&P 500®,” “Standard & Poor's 500®”, and “500” are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by the Philadelphia Stock Exchange, Inc., in connection with the listing and trading of SPDRs, on the Phlx. These products are not sponsored, sold or endorsed by S&P, a division of The McGraw-Hill Companies, Inc., and S&P makes no representation regarding the advisability of investing SPDRs. 9 Dow Jones®,” “The Dow SM ,” “Dow 30 SM ,” “Dow Jones Industrial Average SM ”, “Dow Jones Industrials SM ,” “DJIA SM ,” “DIAMONDS®” and “The Market's Measure®” are trademarks of Dow Jones & Company, Inc. (“Dow Jones”) and have been licensed for use for certain purposes by the Philadelphia Stock Exchange, Inc., pursuant to a License Agreement with Dow Jones. The DIAMONDS Trust, based on the DJIA, is not sponsored, endorsed, sold or promoted by Dow Jones, and Dow Jones makes no representation regarding the advisability of investing in the DIAMONDS Trust. 10 Certain provisions of the SCCP Fee Schedule do not apply to ECNs because they apply to specialists and/or relate to margin financing, such as specialist discount, margin account interest, P&L statement charges, buy-ins, specialist ETF charges, and SCCP Transaction Charge (Remote Specialists Only). This proposal affects ECN trades not related to such ECN acting as a Phlx specialist or floor broker on the Phlx. Currently, no ECN operates from the Exchange's equity trading floor as a floor broker or specialist unit. If, however, an ECN did operate from the Phlx equity trading floor, it could be subject to various SCCP fees respecting its non-ECN floor operation. In addition, an ECN's transactions as a floor broker would be subject to the applicable SCCP fee, as would any ECN's specialist trades. 11 Even if the ECN is acting as a floor broker or specialist with respect to some trades, those trades for which it is not acting as a floor broker or specialist, but rather an ECN, would be eligible for this fee waiver. 11 For example, an ECN acting as a specialist would be subject to the trade recording fee for specialist trades matching with PACE trades. A copy of SCCP's schedule of fees which includes the fees proposed to be waived for ECNs to the filing of proposed rule change as Exhibit 5. 12 12 No changes are being made to the SCCP fee schedule in connection with the ECN fee as described in this proposal. The Exchange, however, proposes to make a minor, technical change to delete a reference to a date when the fee schedule was last updated (“December 2004”) in order to minimize any member confusion. SCCP believes that its proposal to extend its current pilot program for one year, thereby continuing to implement the existing SCCP fee waivers described above for ECNs, is consistent with Section 17A(b)(3)(D) 13 of the Act because it provides for the equitable allocation of reasonable dues, fees, and other charges in order to attract new order flow to Phlx and SCCP. SCCP believes that structuring this fee for ECNs is appropriate, as ECNs are unique in their role as order flow providers to the Exchange. Specifically, ECNs operate a unique electronic agency business, similar to a securities exchange, as opposed to directly executing orders for their own customers as principal or agent. 13 15 U.S.C. 78q-1(b)(3)(D). B. Self-Regulatory Organization's Statement on Burden on Competition SCCP does not believe that the proposed rule change will impose any inappropriate burden on competition. 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 proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 14 and Rule 19b-4(f)(2) 15 thereunder because it establishes or changes a due, fee, or other charge. 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 15 U.S.C. 78(s)(b)(3)(A)(ii). 15 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-SCCP-2005-01 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-SCCP-2005-01.* 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 the filing also will be available for inspection and copying at the principal office of SCCP. 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-SCCP-2005-01* and should be submitted on or before March 8, 2005. 16 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-605 Filed 2-14-05; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION [Social Security Ruling, SSR 05-1c.] The Social Security Act, Sections 223(d)(2)(A) and 1614(a)(3)(B), as Amended (42 U.S.C. 423(d)(2)(A) and 1382c(a)(3)(B)—Disability Insurance Benefits and Supplemental Security Income—Whether Past Relevant Work Must Exist in Significant Numbers in the National Economy AGENCY: Social Security Administration (SSA). ACTION: Notice of Social Security Ruling. SUMMARY: In accordance with 20 CFR 402.35(b)(1), the Commissioner of Social Security gives notice of Social Security Ruling

(SSR)05-1c. This ruling is based on the decision of the Supreme Court of the United States in the case of *Jo Anne B. Barnhart, Commissioner of Social Security* v. *Pauline Thomas,* 540 U.S. 20, 124 S.Ct. 376 (2003). That decision affirmed as reasonable SSA's interpretation of sections 223(d)(2)(A) and 1614(a)(3)(B) of the Social Security Act (42 U.S.C. 423(d)(2)(A) and 1382c(a)(3)(B)) that an individual who remains physically and mentally able to do his or her past relevant work will be found not disabled, without the need for SSA to investigate whether that previous work exists in the national economy. DATES: *Effective Date:* February 15, 2005. FOR FURTHER INFORMATION CONTACT: Becky Morris, Social Insurance Specialist, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401,

(410)966-7829 or TTY

(800)966-5609. SUPPLEMENTARY INFORMATION: Although 5 U.S.C. 552(a)(1) and (a)(2) do not require us to publish this Social Security Ruling, we are doing so in accordance with 20 CFR 402.35(b)(1). Social Security Rulings make available to the public precedential decisions relating to the Federal old-age, survivors, disability, supplemental security income, and black lung benefits programs. Social Security Rulings may be based on case decisions made at all administrative levels of adjudication, Federal court decisions, Commissioner's decisions, opinions of the Office of the General Counsel, and policy interpretations of the law and regulations. Although Social Security Rulings do not have the same force and effect as the statute or regulations, they are binding on all components of the Social Security Administration, in accordance with 20 CFR 402.35(b)(1), and are to be relied upon as precedents in adjudicating cases. If this Social Security Ruling is later superseded, modified, or rescinded, we will publish a notice in the **Federal Register** to that effect. (Catalog of Federal Domestic Assistance, Programs 96.001 Social Security—Disability Insurance and 96.006 Supplemental Security Income.) Dated: February 9, 2005. Jo Anne B. Barnhart, Commissioner of Social Security. This Ruling concerns the Social Security Administration's

(SSA)interpretation of sections 223(d)(2)(A) and 1614(a)(3)(B) of the Social Security Act (42 U.S.C. 423(d)(2)(A) and 1382(a)(3)(B)) that a claimant who remains physically and mentally able to perform his or her past relevant work will be found not disabled (see 20 CFR 404.1520 and 416.920), regardless of whether that previous work exists in the national economy. In June 1996, the claimant applied for Social Security disability insurance benefits and for Supplemental Security Income, alleging disability due to heart disease and cervical and lumbar radiculopathy. She had worked as an elevator operator for 6 years until her job was eliminated in August 1995. The SSA denied her claim at the initial and reconsideration levels of adjudication and she requested a hearing before an Administrative Law Judge (ALJ). The ALJ found that she was not under a disability because her impairments did not prevent her from performing her past work as an elevator operator. The ALJ rejected the claimant's argument that she was not able to do her past work because it no longer existed in significant numbers in the national economy. The SSA's Appeals Council denied the claimant's request for review. The United States District Court for the District of New Jersey affirmed the ALJ's findings, concluding that whether the old job exists is irrelevant under SSA's regulations. The Court of Appeals for the Third Circuit reversed and remanded, holding that the statute unambiguously provides that the ability to perform prior work disqualifies a claimant from benefits only if the work is “substantial gainful work which exists in the national economy.” The Supreme Court of the United States (the Court) held that 42 U.S.C. 423(d)(2)(A) and 1382c(a)(3)(B) do not require a different interpretation and that, because SSA's regulations (20 CFR 404.1520, 404.1560(b), 416.920, and 416.960(b)) are a reasonable interpretation of the text of the Act, they must be deferred to and given effect. Cite as: 540 U. S. 20

(2003)Opinion of the Court Supreme Court of the United States ____ No. 02-763 ____ Jo Anne B. Barnhart, Commissioner of Social Security, Petitioner v. Pauline Thomas On Writ of Certiorari to the United States Court of Appeals for the Third Circuit [November 12, 2003] Justice Scalia delivered the opinion of the Court. Under the Social Security Act, the Social Security Administration

(SSA)is authorized to pay disability insurance benefits and Supplemental Security Income to persons who have a “disability.” A person qualifies as disabled, and thereby eligible for such benefits, “only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy.” 42 U.S.C. 423(d)(2)(A), 1382c(a)(3)(B). The issue we must decide is whether the SSA may determine that a claimant is not disabled because she remains physically and mentally able to do her previous work, without investigating whether that previous work exists in significant numbers in the national economy. Pauline Thomas worked as an elevator operator for six years until her job was eliminated in August 1995. In June 1996, at age 53, Thomas applied for disability insurance benefits under Title II and Supplemental Security Income under Title XVI of the Social Security Act. See 49 Stat. 622, as amended, 42 U.S.C. 401 *et seq.* (Title II); as added, 86 Stat. 1465, and as amended, section 1381 *et seq.* (Title XVI). She claimed that she suffered from, and was disabled by, heart disease and cervical and lumbar radiculopathy. After the SSA denied Thomas's application initially and on reconsideration, she requested a hearing before an Administrative Law Judge (ALJ). The ALJ found that Thomas had “hypertension, cardiac arrhythmia, [and] cervical and lumbar strain/sprain.” Decision of ALJ 5, Record 15. He concluded, however, that Thomas was not under a “disability” because her “impairments do not prevent [her] from performing her past relevant work as an elevator operator.” Id., at 6, Record 16. He rejected Thomas's argument that she is unable to do her previous work because that work no longer exists in significant numbers in the national economy. The SSA's Appeals Council denied Thomas's request for review. Thomas then challenged the ALJ's ruling in the United States District Court for the District of New Jersey, renewing her argument that she is unable to do her previous work due to its scarcity. The District Court affirmed the ALJ, concluding that whether Thomas's old job exists is irrelevant under the SSA's regulations. *Thomas* v. *Apfel,* Civ. No. 99-2234 (Aug. 17, 2000). The Court of Appeals for the Third Circuit, sitting en banc, reversed and remanded. Over the dissent of three of its members, it held that the statute unambiguously provides that the ability to perform prior work disqualifies from benefits only if it is “substantial gainful work which exists in the national economy.” 294 F. 3d 568, 572 (2002). That holding conflicts with the decisions of four other Courts of Appeals. See *Quang Van Han* v. *Bowen,* 882 F. 2d 1453, 1457 (CA9 1989); *Garcia* v. *Secretary of Health and Human Services,* 46 F. 3d 552, 558 (CA6 1995); *Pass* v. *Chater,* 65 F. 3d 1200, 1206-1207 (CA4 1995); *Rater* v. *Chater,* 73 F. 3d 796, 799 (CA8 1996). We granted the SSA's petition for certiorari. 537 U.S. 1187 (2003). As relevant to the present case, Title II of the Act defines “disability” as the “inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” 42 U.S.C. 423(d)(1)(A). That definition is qualified, however, as follows: “An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that *he is not only unable to do his previous work but cannot,* considering his age, education, and work experience, *engage in any other kind of substantial gainful work which exists in the national economy* * * *” section 423(d)(2)(A) (emphasis added). “[W]ork which exists in the national economy” is defined to mean “work which exists in significant numbers either in the region where such individual lives or in several regions of the country.” Ibid. Title XVI of the Act, which governs Supplemental Security Income benefits for disabled indigent persons, employs the same definition of “disability” used in Title II, including a qualification that is verbatim the same as section 423(d)(2)(A). See 42 U.S.C. 1382c(a)(3)(B). For simplicity's sake, we will refer only to the Title II provisions, but our analysis applies equally to Title XVI. Section 423(d)(2)(A) establishes two requirements for disability. First, an individual's physical or mental impairment must render him “unable to do his previous work.” Second, the impairment must also preclude him from “engag[ing] in any other kind of substantial gainful work.” The parties agree that the latter requirement is qualified by the clause that immediately follows it—which exists in the national economy.” The issue in this case is whether that clause also qualifies “previous work.” The SSA has answered this question in the negative. Acting pursuant to its statutory rulemaking authority, 42 U.S.C. 405(a) (Title II), 1383(d)(1) (Title XVI), the agency has promulgated regulations establishing a five-step sequential evaluation process to determine disability. See 20 CFR 404.1520

(2003)(governing claims for disability insurance benefits); § 416.920 (parallel regulation governing claims for Supplemental Security Income). If at any step a finding of disability or non-disability can be made, the SSA will not review the claim further. At the first step, the agency will find non-disability unless the claimant shows that he is not working at a “substantial gainful activity.” §§ 404.1520(b), 416.920(b). At step two, the SSA will find non-disability unless the claimant shows that he has a “severe impairment,” defined as “any impairment or combination of impairments which significantly limits [the claimant's] physical or mental ability to do basic work activities.” §§ 404.1520(c), 416.920(c). At step three, the agency determines whether the impairment which enabled the claimant to survive step two is on the list of impairments presumed severe enough to render one disabled; if so, the claimant qualifies. §§ 404.1520(d), 416.920(d). If the claimant's impairment is not on the list, the inquiry proceeds to step four, at which the SSA assesses whether the claimant can do his previous work; unless he shows that he cannot, he is determined not to be disabled. 1 If the claimant survives the fourth stage, the fifth, and final, step requires the SSA to consider so-called “vocational factors” (the claimant's age, education, and past work experience), and to determine whether the claimant is capable of performing other jobs existing in significant numbers in the national economy. §§ 404.1520(f), 404.1560(c), 416.920(f), 416.960(c). 2 1 The four-step instructions to the claimant read as follows: “If we cannot make a decision based on your current work activity or on medical facts alone, and you have a severe impairment(s), we then review your residual functional capacity and the physical and mental demands of the work you have done in the past. If you can still do this kind of work, we will find that you are not disabled.” 20 CFR 404.1520(e), 416.920(e)(2003). 2 In regulations that became effective on September 25, 2003, the SSA amended certain aspects of the five-step process in ways not material to this opinion. The provisions referred to as subsections

(e)and

(f)in this opinion are now subsections

(f)and (g). As the above description shows, step four can result in a determination of no disability without inquiry into whether the claimant's previous work exists in the national economy; the regulations explicitly reserve inquiry into the national economy for step five. Thus, the SSA has made it perfectly clear that it does not interpret the clause “which exists in the national economy” in § 423(d)(2)(A) as applying to “previous work.” 3 The issue presented is whether this agency interpretation must be accorded deference. 3 This interpretation was embodied in the regulations that first established the five-step process in 1978, see 43 FR 55349 (codified, as amended, at 20 CFR 404.1520 and 416.920 (1982)). Even before enactment of § 423(d)(2)(A) in 1967, the SSA disallowed disability benefits when the inability to work was caused by “technological changes in the industry in which [the claimant] has worked.” 20 CFR 404.1502(b) (1961). As we held in *Chevron U.S.A. Inc.* v. *Natural Resources Defense Council, Inc.* , 467 U.S. 837, 843 (1984), when a statute speaks clearly to the issue at hand we “must give effect to the unambiguously expressed intent of Congress,” but when the statute “is silent or ambiguous” we must defer to a reasonable construction by the agency charged with its implementation. The Third Circuit held that, by referring first to “previous work” and then to “ *any other* kind of substantial gainful work which exists in the national economy,” 42 U.S.C. 423(d)(2)(A) (emphasis added), the statute unambiguously indicates that the former is a species of the latter. “When,” it said, “a sentence sets out one or more specific items followed by ‘any other’ and a description, the specific items must fall within the description.” 294 F. 3d, at 572. We disagree. For the reasons discussed below the interpretation adopted by SSA is at least a reasonable construction of the text and must therefore be given effect. The Third Circuit's reading disregards—indeed, is precisely contrary to—the grammatical “rule of the last antecedent,” according to which a limiting clause or phrase (here, the relative clause “which exists in the national economy”) should ordinarily be read as modifying only the noun or phrase that it immediately follows (here, “any other kind of substantial gainful work”). See 2A N. Singer, Sutherland on Statutory Construction § 47.33, p. 369 (6th rev. ed. 2000) (“Referential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent”). While this rule is not an absolute and can assuredly be overcome by other indicia of meaning, we have said that construing a statute in accord with the rule is “quite sensible as a matter of grammar.” *Nobelman* v. *American Savings Bank,* 508 U.S. 324, 330 (1993). In *FTC* v. *Mandel Brothers, Inc.,* 359 U.S. 385 (1959), this Court employed the rule to interpret a statute strikingly similar in structure to section 423(d)(2)(A)—a provision of the Fur Products Labeling Act, 15 U.S.C. 69, which defined “ ‘invoice’ as ‘a written account, memorandum, list, or catalog * * * transported or delivered to a purchaser, consignee, factor, bailee, correspondent, or agent, *or any other person who is engaged in dealing commercially in fur products or furs* .’ ” 359 U.S., at 386 (quoting 15 U.S.C. 69(f)) (emphasis added). Like the Third Circuit here, the Court of Appeals in *Mandel Brothers* had interpreted the phrase “ ‘any other’ ” as rendering the relative clause (“ ‘who is engaged in dealing commercially’ ”) applicable to all the specifically listed categories. 359 U.S., at 389. This Court unanimously reversed, concluding that the “limiting clause is to be applied only to the last antecedent.” *Id.,* at 389, and n. 4 (citing 2 J. Sutherland, Statutory Construction § 4921 (3d ed. 1943)). An example will illustrate the error of the Third Circuit's perception that the specifically enumerated “previous work” “must” be treated the same as the more general reference to “any other kind of substantial gainful work.” 294 F. 3d, at 572. Consider, for example, the case of parents who, before leaving their teenage son alone in the house for the weekend, warn him, “You will be punished if you throw a party or engage in any other activity that damages the house.” If the son nevertheless throws a party and is caught, he should hardly be able to avoid punishment by arguing that the house was not damaged. The parents proscribed

(1)a party, and

(2)any other activity that damages the house. As far as appears from what they said, their reasons for prohibiting the home-alone party may have had nothing to do with damage to the house—for instance, the risk that underage drinking or sexual activity would occur. And even if their only concern was to prevent damage, it does not follow from the fact that the same interest underlay both the specific and the general prohibition that proof of impairment of that interest is required for both. The parents, foreseeing that assessment of whether an activity had in fact “damaged” the house could be disputed by their son, might have wished to preclude all argument by specifying and categorically prohibiting the one activity—hosting a party—that was most likely to cause damage and most likely to occur. The Third Circuit suggested that interpreting the statute as does the SSA would lead to “absurd results.” Ibid. See also *Kolman* v. *Sullivan,* 925 F. 2d 212, 213 (CA7 1991) (the fact that a claimant could perform a past job that no longer exists would not be “a rational ground for denying benefits”. The court could conceive of “no plausible reason why Congress might have wanted to deny benefits to an otherwise qualified person simply because that person, although unable to perform any job that actually exists in the national economy, could perform a previous job that no longer exists.” 294 F. 3d, at 572-573. But on the very next page the Third Circuit conceived of just such a plausible reason, namely, that “in the vast majority of cases, a claimant who is found to have the capacity to perform her past work also will have the capacity to perform other types of work.” Id., at 574, n. 5. The conclusion which follows is that Congress could have determined that an analysis of a claimant's physical and mental capacity to do his previous work would “in the vast majority of cases” serve as an effective and efficient administrative proxy for the claimant's ability to do some work that does exist in the national economy. Such a proxy is useful because the step-five inquiry into whether the claimant's cumulative impairments preclude him from finding “other” work is very difficult, requiring consideration of “each of th[e] [vocational] factors and * * * an individual assessment of each claimant's abilities and limitations,” *Heckler* v. *Campbell* , 461 U.S. 458, 460-461, n. 1

(1983)(citing 20 CFR §§ 404.1545-1404.1565 (1982)). There is good reason to use a workable proxy that avoids the more expansive and individualized step-five analysis. As we have observed, “[t]he Social Security hearing system is ‘probably the largest adjudicative agency in the western world.’ * * * The need for efficiency is self-evident.” 461 U.S., at 461, n. 2 (citation omitted). The Third Circuit rejected this proxy rationale because it would produce results that “may not always be true, and * * * may not be true in this case.” 294 F. 3d, at 576. That logic would invalidate a vast number of the procedures employed by the administrative state. To generalize is to be imprecise. Virtually every legal (or other) rule has imperfect applications in particular circumstances. Cf. *Bowen* v. *Yuckert* , 482 U.S. 137, 157

(1987)(O.CONNOR, J., concurring) (“To be sure the Secretary faces an administrative task of staggering proportions in applying the disability benefits provisions of the Social Security Act. Perfection in processing millions of such claims annually is impossible”). It is true that, under the SSA's interpretation, a worker with severely limited capacity who has managed to find easy work in a declining industry could be penalized for his troubles if the job later disappears. It is also true, however, that under the Third Circuit's interpretation, impaired workers in declining or marginal industries who cannot do “other” work could simply refuse to return to their jobs—even though the jobs remain open and available—and nonetheless draw disability benefits. The proper *Chevron* inquiry is not whether the agency construction can give rise to undesirable results in some instances (as here both constructions can), but rather whether, in light of the alternatives, the agency construction is reasonable. In the present case, the SSA's authoritative interpretation certainly satisfies that test. We have considered respondent's other arguments and find them to be without merit. We need not decide today whether Section 423(d)(2)(A) compels the interpretation given it by the SSA. It suffices to conclude, as we do, that § 423(d)(2)(A) does not unambiguously require a different interpretation, and that the SSA's regulation is an entirely reasonable interpretation of the text. The judgment of the Court of Appeals is reversed. *It is so ordered.* Justice Scalia delivered the opinion for a unanimous Court. [FR Doc. 05-2860 Filed 2-14-05; 8:45 am]

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