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Code · REGISTER · 2005-03-31 · SECURITIES AND EXCHANGE COMMISSION · Rules and Regulations

Rules and Regulations. SECURITIES AND EXCHANGE COMMISSION

20,562 words·~93 min read·/register/2005/03/31/05-6384·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 7905-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-26823] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 March 25, 2005. The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of March, 2005. A copy of each application may be obtained for a fee at the SEC's Public Reference Branch, 450 Fifth St., NW., Washington, DC 20549-0102 (tel. 202-942-8090).
An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on April 19, 2005, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service.
Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549-0609. FOR FURTHER INFORMATION CONTACT: Diane L. Titus at
(202)551-6810, SEC, Division of Investment Management, Office of Investment Company Regulation, 450 Fifth Street, NW., Washington, DC 20549-0504. TS&W/Heitman/Claymore Equity Income Fund [File No. 811-21456] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind. *Filing Date:* The application was filed on February 28, 2005. *Applicant's Address:* 2455 Corporate West Dr., Lisle, IL 60532. Morgan Stanley Market Leader Trust [File No. 811-7915] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On February 24, 2004, applicant transferred its assets to Morgan Stanley Growth Fund, based on net asset value. Expenses of $333,000 incurred in connection with the reorganization were paid by applicant. *Filing Date:* The application was filed on March 7, 2005. *Applicant's Address:* Morgan Stanley Investment Advisors Inc., 1221 Avenue of the Americas, New York, NY 10020. Atalanta Sosnoff Investment Trust [File No. 811-8669] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 1, 2004, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $12,948 incurred in connection with the liquidation were paid by Atalanta Sosnoff Capital, LLC, applicant's investment adviser. *Filing Date:* The application was filed on February 28, 2005. *Applicant's Address:* 101 Park Ave., New York, NY 10178. Phoenix-LJH Advisors Fund LLC [File No. 811-21138] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On September 30, 2004, applicant made a liquidating distribution to its shareholders, based on net asset value. Applicant has two remaining shareholders, once applicant's pending receivables are collected, the remaining assets will be distributed. Applicant paid $45,000 in expenses incurred in connection with the liquidation. *Filing Dates:* The application was filed on November 22, 2004, and amended on March 1, 2005. *Applicant's Address:* 2640 Golden Gate Pkwy., Suite 205, Naples, FL 34105. The Gannett Welsh & Kotler Funds [File No. 811-7673] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On October 4, 2002, applicant transferred its assets to BNY Hamilton Multi-Cap Equity Fund, based on net asset value. Any expenses incurred in connection with the reorganization were paid by Bank of New York, investment adviser to the acquiring fund. *Filing Dates:* The application was filed on November 23, 2004, and amended on March 1, 2005. *Applicant's Address:* Gannett Welsh & Kotler, Inc., 222 Berkeley St., Boston, MA 02116. Brundage, Story and Rose Investment Trust [File No. 811-6185] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On June 8, 2003, applicant transferred its assets to Old Westbury Funds, Inc., based on net asset value. Any expenses incurred in connection with the reorganization were paid by Bessemer Investment Management, investment adviser to the acquiring fund. *Filing Dates:* The application was filed on November 23, 2004, and amended on February 28, 2005. *Applicant's Address:* Brundage, Story and Rose LLC, 630 Fifth Ave., New York, NY 10111. Riggs Funds [File No. 811-6309] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On September 29, 2003, each of applicant's series transferred its assets to corresponding series of the following funds based on net asset value: Federated Capital Appreciation Fund, Federated Kaufmann Fund, Federated Total Return Government Bond Fund, Federated Total Return Bond Fund, Federated Short-Term Municipal Trust, Federated Intermediate Municipal Trust, Automated Cash Management Trust, and Automated Government Money Trust. Expenses of $248,377 incurred in connection with the reorganization were paid by applicant and the acquiring fund. *Filing Dates:* The application was filed on November 16, 2004, and amended on February 23, 2005. *Applicant's Address:* 5800 Corporate Dr., Pittsburgh, PA 15237. Nuveen EquityBuilder Equity Unit Investment Trust Series 1 [File No. 811-7079] *Summary:* Applicant, a unit investment trust, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind. *Filing Dates:* The application was filed on January 25, 2005, and amended on March 11, 2005. *Applicant's Address:* 333 West Wacker Dr., Chicago, IL 60606. Nuveen AIM Municipal Income and Equity Growth Fund [File No. 811-8756] *Summary:* Applicant, a closed-end management company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind. *Filing Dates:* The application was filed on January 25, 2005, and amended on March 11, 2005. *Applicant's Address:* 333 West Wacker Dr., Chicago, IL 60606. Dole Food Automatic Common Exchange Security Trust [File No. 811-7499] Republic Industries Automatic Common Exchange Security Trust [File No. 811-8069] Readers Digest Automatic Common Exchange [File No. 811-8237] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Between August 15, 1999 and February 15, 2001, each applicant made a pro rata liquidating distribution to its shareholders, as provided for in each applicant's registration statement. Applicants incurred no expenses in connection with the liquidations. *Filing Dates:* The applications were filed on January 10, 2005, and amended on March 10, 2005. *Applicants' Address:* Attn: Betty A. Cocozza, Bank of New York, 101 Barclay St., 8th Floor, New York, NY 10286. Express Scripts Automatic Exchange Security Trust [File No. 811-9427] *Summary:* Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. On November 17, 2003, applicant made a pro rata liquidating distribution to its shareholders, as provided for in applicant's registration statement. Applicant incurred no expenses in connection with the liquidation. *Filing Dates:* The application was filed on January 4, 2005, and amended on March 10, 2005. *Applicant's Address:* Attention: Bruce Vecchio—Institutional Trust Services, JP Morgan Chase Bank, 4 New York Plaza, 13th Floor, New York, NY 10004. CVS Automatic Common Exchange Security Trust [File No. 811-8539] Estee Lauder Automatic Common Exchange Security Trust [File No. 811-8761] Estee Lauder Automatic Common Exchange Security Trust II [File No. 811-8827] Amdocs Automatic Common Exchange Security Trust [File No. 811-9245] NBCi Automatic Common Exchange Security Trust [File No. 811-9323] *Summary:* Each applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Between May 15, 2001 and September 11, 2002, each applicant made a pro rata liquidating distribution to its shareholders, as provided for in the applicant's registration statement. Applicants incurred no expenses in connection with the liquidations. *Filing Dates:* The applications were filed on January 4, 2005, and amended on March 10, 2005. *Applicant's Address:* Attention: Bruce Vecchio—Institutional Trust Services, JP Morgan Chase Bank, 4 New York Plaza, 13th Floor, New York, NY 10004. 10K Smart Trust Fund [File No. 811-9283] *Summary:* Applicant seeks an order declaring that it has ceased to be an investment company. On August 31, 2000, applicant made a liquidating distribution to its shareholders, based on net asset value. Applicant incurred no expenses in connection with the liquidation. *Filing Dates:* The application was filed on December 23, 2004, and amended on March 3, 2005. *Applicant's Address:* 5952 Royal Ln., Suite 270, Dallas, TX 75230. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-1411 Filed 3-30-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51433; File No. SR-BSE-2004-54] Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment Nos. 1, 2, and 3 Thereto by the Boston Stock Exchange, Inc. To Trade the streetTRACKS ® Gold Shares Pursuant to Unlisted Trading Privileges March 24, 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 November 29, 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 substantially prepared by the Exchange. The proposal would permit the Exchange to trade the streetTRACKS ® Gold Shares (“GLD” or “Shares”) pursuant to unlisted trading privileges (“UTP”). The Shares represent units of fractional undivided beneficial interests in and ownership of the streetTRACKS ® Gold Trust (“Trust”). The Commission previously has approved GLD for original listing and trading on the New York Stock Exchange (“NYSE”). 3 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 50603 (October 28, 2004), 69 FR 64614 (November 5, 2004) (“NYSE Approval Order”). On December 17, 2004, BSE filed Amendment No. 1, 4 on January 28, 2005, BSE filed Amendment No. 2, 5 and on March 11, 2005, BSE filed Amendment No. 3 6 to the proposal. The Commission is publishing this notice and order to solicit comments on the proposed rule change, as amended, from interested persons and to approve the proposal on an accelerated basis. 4 In Amendment No. 1, BSE revised its proposal by specifically indicating additions to existing rule text. 5 In Amendment No. 2, BSE replaced the amended filing in its entirety to, among other things:
(1)M ake certain corrections to reflect that the Shares were listed and have been trading on NYSE;
(2)clarify that last sale prices for the Shares are disseminated on a real-time basis;
(3)state that BSE would provide a link to the Trust's Web site;
(4)add a description of the initial Shares issuance and continued trading of the Shares;
(5)clarify that the Shares would trade on the Exchange until 4:15 p.m. Eastern Time; and
(6)that its surveillance procedures would be adequate to detect and deter manipulation. 6 In Amendment No. 3, BSE amended the proposed rule text to specify that an approved person of an equity specialist that has established and obtained Exchange approval of procedures restricting the flow of material, non-public market information between itself and the specialist member organization pursuant to BSE Chapter II, Section 36 and any member, officer, or employee associated therewith, may act in a market-making capacity, other than as a specialist in the Shares on another market center, in gold or gold derivatives. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change BSE proposes to trade GLD pursuant to UTP. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.bostonstock.com* ), at the principal office of the Exchange, 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 III 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 trade the streetTRACKS ® Gold Shares (ticker symbol: GLD) pursuant to UTP. The value of each Share will correspond to a fixed amount of gold 7 and fluctuate with the spot price of gold. Purchasing Shares in the Trust provides investors a mechanism to participate in the gold market. 7 Initially, each Share will correspond to one-tenth of a troy ounce of gold. The amount of gold associated with each Share is expected to decrease over time as the Trust incurs and pays maintenance fees and other expenses. a. Description of the Gold Market The global trade in gold consists of over-the-counter (“OTC”) transactions in spot, forwards, and options and other derivatives, together with exchange-traded futures and options. The global gold market consists of the following components, described briefly below.
(1)The OTC Market The OTC market trades on a continuous basis 24 hours per day and accounts for most global gold trading. Liquidity in the OTC market can vary from time to time during the course of the 24-hour trading day. Fluctuations in liquidity are reflected in adjustments to dealing spreads—the differential between a dealer's “buy” and “sell” prices. According to the Trust's Registration Statement, the period of greatest liquidity in the gold market is typically when trading in the European time zones overlaps with trading in the United States, which is when OTC market trading in London, New York, and other centers coincides with futures and options trading on the Commodity Exchange Inc. (“COMEX”), a division of the New York Mercantile Exchange, Inc. (“NYMEX”). This period lasts for approximately four hours each New York business day morning. The OTC market has no formal structure and no open-outcry meeting place. The main centers of the OTC market are London, New York, and Zurich. Bullion dealers have offices around the world, and most of the world's major bullion dealers are either members or associate members of the London Bullion Market Association (“LBMA”), a trade association of participants in the London bullion market. There are no authoritative published figures for overall worldwide volume in gold trading. There are certain published sources that suggest the significant size of the overall market. The LBMA publishes statistics compiled from the five members offering clearing services. 8 The monthly average daily volume figures published by the LBMA for 2003 range from a high of 19 million to a low of 13.6 million troy ounces per day. 9 COMEX publishes price and volume statistics for transactions in contracts for the future delivery of gold. COMEX figures for 2003 indicate that the average daily volume for gold futures contracts was 4.9 million troy ounces per day. 10 8 Information regarding clearing volume estimates by the LBMA can be found at *http://www.lbma.org.uk/clearing_table.htm* . The three measures published by the LBMA are: Volume, the amount of metal transferred on average each day measured in million of troy ounces; value, measured in U.S. dollars, using the monthly average London p.m. fixing price; and the number of transfers, which is the average number recorded each day. The statistics exclude allocated and unallocated balance transfers where the sole purpose is for overnight credit and physical movements arranged by clearing members in locations other than London. 9 See NYSE Approval Order, 69 FR at 64614. 10 Information regarding average daily volume estimates by COMEX can be found at *http://www.nymex.com/jsp/markets/md_annual_volume6.jsp#2* . The statistics are based on gold futures contracts, each of which relates to 100 troy ounces of gold.
(2)Futures Exchanges The most significant gold futures exchanges are COMEX and the Tokyo Commodity Exchange (“TOCOM”). 11 Trading on these exchanges is based on fixed delivery dates and transaction sizes for the futures and options contracts traded. Trading costs are negotiable. As a matter of practice, only a small percentage of the futures market turnover ever comes to physical delivery of the gold represented by the contracts traded. Both exchanges permit trading on margin. COMEX operates through a central clearance system. TOCOM has a similar clearance system. In each case, the exchange acts as a counterparty for each member for clearing purposes. 11 There are other gold exchange markets, such as the Istanbul Gold Exchange, the Shanghai Gold Exchange, and the Hong Kong Chinese Gold & Silver Exchange Society.
(3)Gold Market Regulation There is no direct regulation of the global OTC market in gold. However, indirect regulation of some of the overseas participants does occur in some capacity. In the United Kingdom, responsibility for the regulation of the financial market participants, including the major participating members of the LBMA, falls under the authority of the Financial Services Authority (“FSA”), as provided by the Financial Services and Markets Act 2000 (“FSM Act”). Under the FSM Act, all U.K.-based banks, together with other investment firms, are subject to a range of requirements, including fitness and properness, capital adequacy, liquidity, and systems and controls. The FSA is responsible for regulating investment products, including derivatives, and those who deal in investment products. Regulation of spot, commercial forwards, and deposits of gold and silver not covered by the FSM Act is provided for by The London Code of Conduct for Non-Investment Products, which was established by market participants in conjunction with the Bank of England, and is a voluntary code of conduct among market participants. Participants in the U.S. OTC market for gold are generally regulated by their institutional supervisors, which regulate their activities in other markets in which they operate. For example, participating banks are regulated by the banking authorities. In the United States, the Commodity Futures Trading Commission regulates futures market participants and has established rules designed to prevent market manipulation, abusive trade practices, and fraud. TOCOM has authority to perform financial and operational surveillance on its members' trading activities, scrutinize positions held by members and large-scale customers, and monitor the price movements of futures markets by comparing them with cash and other derivative markets' prices. b. Trust Management and Structure The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust. The purpose of the Trust is to hold gold bullion. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold, less the Trust's expenses. The Trust is an investment trust and is not managed like a corporation or an active investment vehicle. The Trust has no board of directors or officers or persons acting in a similar capacity. The Trust is not a registered investment company under the Investment Company Act of 1940 (“1940 Act”) and is not required to register under the 1940 Act. World Gold Trust Services, LLC, a wholly owned limited liability company of the World Gold Council, 12 is the sponsor of the Trust (“Sponsor”). The Bank of New York is the trustee of the Trust (“Trustee”). HSBC Bank USA, an indirect wholly owned subsidiary of HSBC Holdings plc, is the custodian of the Trust (“Custodian”). State Street Global Markets LLC, a wholly owned subsidiary of State Street Corporation, is the Marketing Agent of the Trust (“Marketing Agent”). The Marketing Agent and Custodian are registered broker-dealers. The Custodian and Marketing Agent and their affiliates, and affiliates of the Trustee, may act as Authorized Participants or purchase or sell gold or the Shares for their own account as agent for customers and for accounts over which they exercise investment discretion. To the extent deemed appropriate by these entities, information barriers will exist between the Custodian, Marketing Agent, Trustee, and their affiliates transacting in the gold cash market or the Shares; however, the Exchange will not require such information barriers. UBS Securities LLC was the initial purchaser of the Shares (“Initial Purchaser”), as described below. The Sponsor, Trustee, Custodian, and Initial Purchaser are not affiliated with one another or with the Exchange. 12 The World Gold Council is a not-for-profit association registered under Swiss law. c. Trust Expenses and Management Fees Generally, the assets of the Trust ( *e.g.* , gold bullion) will be sold to pay Trust expenses and management fees. These expenses and fees will reduce the value of an investor's Share as gold bullion is sold to pay such costs. Ordinary operating expenses of the Trust include:
(1)Fees paid to the Sponsor;
(2)fees paid to the Trustee;
(3)fees paid to the Custodian;
(4)fees paid to the Marketing Agent; and
(5)various Trust administration fees, including printing and mailing costs, legal and audit fees, registration fees, and NYSE listing fees. The Trust's estimated ordinary operating expenses are accrued daily and reflected in the net asset value (“NAV”) of the Trust. d. Description and Characteristics of the Shares
(1)Liquidity The Shares may trade at a discount or premium relative to the NAV per Share because of non-concurrent trading hours between the major gold markets and the Exchange. While the Shares will trade on the Exchange until 4:15 p.m. Eastern Time, liquidity in the OTC market for gold will be reduced after the close of COMEX at 1:30 p.m. Eastern Time. During this time, trading spreads and the resulting premium or discount on the Shares may widen as a result of reduced liquidity in the OTC gold market. Because of the potential for arbitrage inherent in the structure of the Trust, the Sponsor believes that the Shares will not trade at a material discount or premium to the underlying gold held by the Trust. The arbitrage process, which in general provides investors the opportunity to profit from differences in prices of assets, increases the efficiency of the markets, serves to prevent potentially manipulative efforts, and can be expected to operate efficiently in the case of the Shares and gold.
(2)Creation and Redemption of Trust Shares The Trust will create Shares on a continuous basis only in aggregations of 100,000 Shares (such aggregation referred to as a “Basket”). Authorized Participants are the only persons that may place orders to create and redeem Baskets. Authorized Participants purchasing Baskets will be able to separate a Basket into individual Shares for resale. Authorized Participants purchasing a Basket must make an in-kind deposit of gold (“Gold Deposit”), together with, if applicable, a specified cash payment (“Cash Deposit” 13 and together with the Gold Deposit, the “Creation Basket Deposit”). The Sponsor anticipates that in the ordinary course of the Trust's operations a cash deposit will not be required for the creation of Baskets. Similarly, the Trust will redeem Shares only in Baskets, principally in exchange for gold and, if applicable, a cash payment (“Cash Redemption Amount” 14 and together with the gold, the “Redemption Distribution”). 13 The amount of any required Cash Deposit will be determined as follows:
(1)The fees, expenses, and liabilities of the Trust will be subtracted from any cash held or receivable by the Trust as of the date an Authorized Participant places an order to purchase one or more Baskets (“Purchase Order”); and
(2)the remaining amount will be divided by the number of Baskets outstanding and then multiplied by the number of Baskets being created pursuant to the Purchase Order. If the resulting amount is positive, that amount will be the required Cash Deposit. If the resulting amount is negative, the amount of the required Gold Deposit will be reduced by a number of fine ounces of gold equal in value to that resulting amount, determined by reference to the price of gold used in calculating the NAV of the Trust on the Purchase Order date. Fractions of an ounce of gold of less than 0.001 of an ounce included in the Gold Deposit amount will be disregarded. 14 The Cash Redemption Amount is equal to the excess (if any) of all assets of the Trust other than gold, less all estimated accrued but unpaid fees, expenses, and other liabilities, divided by the number of Baskets outstanding and multiplied by the number of Baskets included in the Authorized Participant's order to redeem one or more Baskets (“Redemption Order”). The Trustee will distribute any positive Cash Redemption Amount through the Depository Trust Company (“DTC”) to the account of the Authorized Participant at DTC. If the Cash Redemption Amount is negative, the credit to the Authorized Participant's unallocated account (“Authorized Participant Unallocated Account”) will be reduced by the number of fine ounces of gold equal in value to that resulting amount, determined by reference to the price of gold used in calculating the NAV of the Trust on the Redemption Order date. Fractions of a fine ounce of gold included in the Redemption Distribution of less than 0.001 of an ounce will be disregarded. Redemption Distributions will be subject to the deduction of any applicable tax or other governmental charges due. The Exchange expects that certain Authorized Participants will be able to participate directly in the gold bullion market and the gold futures market. The Sponsor believes that the size and operation of the gold bullion market make it unlikely that an Authorized Participant's direct activities in the gold or securities markets would impact the price of gold or the price of the Shares. Each Authorized Participant is:
(1)Regulated as a broker-dealer regulated under the Act and registered with NASD; or
(2)is exempt from being, or otherwise is not required to be, regulated as a broker-dealer under the Act or registered with NASD, and in either case is qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants will be regulated under Federal and State banking laws and regulations. Each Authorized Participant will have its own set of rules and procedures, internal controls, and information barriers as it determines is appropriate in light of its own regulatory regime. Authorized Participants may act for their own accounts or as agents for broker-dealers, custodians, and other securities market participants that wish to create or redeem Baskets. An order for one or more Baskets may be placed by an Authorized Participant on behalf of multiple clients. The total amount of gold and any cash required for the creation or redemption of each Basket will be in the same proportion to the total assets of the Trust (net of accrued and unpaid fees, expenses, and other liabilities) on the date the Purchase Order is properly received as the number of Shares to be created in respect of the Creation Basket Deposit bears to the total number of Shares outstanding on the date the Purchase Order is received. Except when aggregated in Baskets, the Shares are not redeemable. The Trust will impose transaction fees in connection with creation and redemption transactions. The Trustee will determine the NAV 15 and daily adjusted NAV (“ANAV”) of the Trust on each business day at the earlier of the London p.m. fix for such day or 12 p.m. Eastern Time. 16 In determining the Trust's NAV and ANAV, the Trustee will value the gold held by the Trust based on the London p.m. fix price for a troy ounce of gold. Once the value of the gold has been determined, the Trustee will determine the ANAV of the Trust by subtracting all accrued fees (other than the fees to be computed by reference to the ANAV or custody fees based on the value of the gold held by the Trust), expenses, and other liabilities of the Trust from the total value of the gold and all other assets of the Trust (other than any amounts credited to the Trust's reserve account, if established). Then the ANAV of the Trust is used to compute the Trustee's, the Sponsor's, and Marketing Agent's fees. 17 To determine the Trust's NAV, the Trustee will subtract from the ANAV the amount of estimated accrued but unpaid fees that are based on the ANAV ( *e.g.* , the Trustee's, the Sponsor's, and Marketing Agent's fees) and the amount of custody fees, which are based on the value of the gold held by the Trust. The Trustee will also determine the NAV per Share by dividing the NAV of the Trust by the number of the Shares outstanding as of the close of trading on NYSE. 15 The NAV of the Trust is the aggregate value of the Trust's assets less its liabilities (which include accrued expenses). 16 The London fix is the most widely used benchmark for daily gold prices and is quoted by various financial information sources. 17 The Custodian's fee is not calculated based on ANAV, but rather the value of the gold held by the Trust. The Exchange understands that, upon initiation of trading on NYSE, UBS Securities LLC, the Initial Purchaser, purchased 100,000 Shares, which comprised the seed Basket. The Initial Purchaser also purchased 900,000 Shares, which comprise the initial Baskets. The Trust received all proceeds from the offering of the seed Basket and the initial Baskets in gold bullion. In connection with the offering and sale of the initial Baskets, the Sponsor paid a fee to the Initial Purchaser at the time of its purchase of the initial Baskets. In addition, the Initial Purchaser received commissions/fees from investors who purchased Shares from the initial Baskets through their commission/fee-based brokerage accounts.
(3)Information About Underlying Gold Holdings The last-sale price for the Shares will be disseminated, on a real-time basis, over the Consolidated Tape by each market trading the Shares. There is a considerable amount of gold price and gold market information available on public Web sites and through professional and subscription services. In most instances, real-time information is available only for a fee, and information available free of charge is subject to delay (typically, 20 minutes). Investors may obtain on a 24-hour basis gold pricing information based on the spot price for a troy ounce of gold from various financial information service providers, such as Reuters and Bloomberg. Reuters and Bloomberg provide at no charge on their Web sites delayed information regarding the spot price of gold and last sale prices of gold futures, as well as information about news and developments in the gold market. Reuters and Bloomberg also offer a professional service to subscribers for a fee that provides information on gold prices directly from market participants. An organization named EBS provides an electronic trading platform to institutions such as bullion banks and dealers for the trading of spot gold, as well as a feed of live streaming prices to Reuters and Moneyline Telerate subscribers. Complete real-time data for gold futures and options prices traded on COMEX are available by subscription from Reuters and Bloomberg. NYMEX also provides delayed futures and options information on current and past trading sessions and market news free of charge on its Web site. The Exchange notes that there are a variety of other public Web sites providing information on gold, ranging from those specializing in precious metals to sites maintained by major newspapers, such as *The Washington Post* . Many of these sites offer price quotations drawn from other published sources, and as the information is supplied free of charge, it generally is subject to time delays. 18 Current gold spot prices are also available with bid/ask spreads from gold bullion dealers. 18 There may be incremental differences in the gold spot price among the various information service sources. While the Exchange believes the differences in the gold spot price may be relevant to those entities engaging in arbitrage or in the active daily trading of gold or gold-based products, the Exchange believes such differences are likely of less concern to individual investors intending to hold the Shares as part of a long-term investment strategy. In addition, the Exchange, via a link to the Trust's Web site ( *http://www.streettracksgoldshares.com* ), will provide at no charge continuously updated bids and offers indicative of the spot price of gold on its own public Web site, *http://www.bostonstock.com.* 19 The Trust Web site provides a calculation of the estimated NAV (also known as the Intraday Indicative Value or “IIV”) of a Share, as calculated by multiplying the indicative spot price of gold by the quantity of gold backing each Share. Comparing the IIV with the last sale price of the Shares helps an investor to determine whether, and to what extent, Shares may be selling at a premium or a discount to the NAV. Although provided free of charge, the indicative spot price and IIV per Share will be provided on an essentially real-time basis. 20 The Trust Web site provides the NAV of the Trust as calculated each business day by the Sponsor. In addition, the Trust Web site contains the following information, on a per-Share basis, for the Trust:
(1)The IIV as of the close of the prior business day and the midpoint of the bid/ask price 21 in relation to such IIV (“Bid/Ask Price”), and a calculation of the premium or discount of such price against such IIV; and
(2)data in chart format displaying the frequency distribution of discounts and premiums of the Bid/Ask Price against the IIV, within appropriate ranges, for each of the four previous calendar quarters. The Trust Web site also provides the Trust's prospectus, as well as the two most recent reports to stockholders. Finally, the Trust Web site provides the last sale price of the Shares as traded in the U.S. market, subject to a 20-minute delay. 22 19 The Trust Web site's gold spot price will be provided by The Bullion Desk ( *http://www.thebulliondesk.com* ). The Trust Web site will indicate that there are other sources for obtaining the gold spot price. In the event that the Trust Web site should cease to provide this indicative spot price from an unaffiliated source (and the intraday indicative value) of the Shares, the Exchange will cease to trade the Shares. 20 The Trust's Web site, to which the Exchange's Web sites will link, will disseminate an indicative spot price of gold and the IIV and indicate that these values are subject to an average delay of 5 to 10 seconds. 21 The bid/ask price is determined using the highest bid and lowest offer on the Consolidated Tape as of the time of calculation of the closing day IIV. 22 The last sale price of the Shares in the secondary market is available on a real-time basis for a fee from regular data vendors. e. Initial Share Issuance and Continued Trading The Exchange understands that a minimum of three Baskets were outstanding at the commencement of trading on NYSE. The number of Shares per Basket is 100,000. The Exchange's applicable continued trading criteria require it to delist the Shares if any of the following occur:
(1)The value of gold is no longer calculated or available on at least a 15-second delayed basis from a source unaffiliated with the Sponsor, the Trust, the Custodian, Marketing Agent, or the Exchange, or the Exchange stops providing the hyperlink on its Web site to any such unaffiliated gold value;
(2)the IIV is no longer made available on at least a 15-second delayed basis; or
(3)such other event shall occur or condition exist that, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. In addition, the Exchange will remove the Shares from trading upon termination of the Trust or delisting from the NYSE without immediate re-listing on another exchange. f. Exchange Trading Rules and Policies Proposed BSE Chapter XXIV-C, Section 1 deals with the trading of the Shares. Paragraph
(c)of that Section states that the Shares are included in the definition of “securities” under the Exchange's Constitution and Rules and are subject to all applicable Exchange trading rules. In addition, proposed BSE Chapter XXIV-C, Section 1 sets forth that an equity specialist, his member organization, other member, allied member, or approved person in such member organization or officer or employee thereof, is prohibited from acting as a market maker or functioning in any capacity involving market-making responsibilities in the physical gold, gold futures or options on gold futures, or any other gold derivatives. However, an approved person of an equity specialist that has established and obtained Exchange approval of procedures restricting the flow of material, non-public market information between itself and the specialist member organization pursuant to BSE Chapter II, Section 36 and any member, officer, or employee associated therewith, may act in a market-making capacity, other than as a specialist in the Shares on another market center, in physical gold, gold futures or options on gold futures, or any other gold derivatives. Proposed BSE Chapter IIIV-C, Section 2 requires trading and information barriers for member organizations acting as specialist in the Shares. Specifically, a member organization acting as specialist in the Shares is obligated to conduct all trading in the Shares in its specialist account, subject only to the ability to have one or more investment accounts, all of which must be reported to the Exchange. Such member organization acting as specialist must also report to the Exchange and keep current a list identifying all accounts for trading physical gold, gold futures or options on gold futures, or any other gold derivatives, which the specialist may have or over which it may exercise investment discretion. Under the rule, any trading by the member organization that is the specialist in GLD of physical gold or gold derivatives in an account over which the member organization controls, directly or indirectly, trading activities or has a direct interest in the profits or losses is prohibited, except to the extent such accounts and trading activities are reported to the Exchange as required under the rule. Furthermore, a member organization that is the specialist in the Shares will be required to make its books, records, and other relevant information pertaining to its transactions and those of any member, allied member, approved person, registered or non-registered employee affiliated with the member for its or their own accounts in physical gold and gold derivatives available to the Exchange upon request. In addition, the registered specialist in GLD will be prohibited from using any material nonpublic information from any person associated with a member or employee of such person regarding trading of physical gold or any gold derivative products. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. Trading on the Exchange in the Shares may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include:
(1)The extent to which trading is not occurring in gold, or
(2)whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in the Shares is subject to trading halts caused by extraordinary market volatility pursuant to the Exchange's “circuit breaker” rule. 23 23 Chapter II, Section 34A of the BSE Rules. Trading in the Shares on the Exchange will be effected normally until 4:15 p.m. Eastern Time each business day. The minimum trading increment for the Shares on the Exchange will be $0.01, in accordance with BSE Chapter II, Section 41. Additionally, the Shares will be subject to the Exchange's rules pertaining to odd-lot trading, as set forth in BSE Chapter XII, as well as the Exchange's rules governing trading over the Intermarket Trading System (“ITS”) set forth in Chapter XXXI, including those provisions in Section 4 governing trade-throughs and locked markets. g. Surveillance BSE represents that the surveillance procedures it will utilize to surveil trading activity in the Shares are sufficient to detect and deter manipulation of the market. The Exchange's existing surveillance procedures for exchange-traded funds (“ETFs”) will be utilized for the Shares. In addition, for intermarket surveillance purposes, the Exchange has entered into a reciprocal Memorandum of Understanding (“MOU”) with NYMEX for the sharing of information related to any financial instrument based, in whole or in part, upon an interest in or performance of gold. The Exchange is also proposing the adoption of BSE Chapter XXIV-C, Section 2 to ensure that specialists handling the Shares provide the Exchange with all necessary information relating to their trading in physical gold and in gold futures contracts and options thereon or any other gold derivative. 24 As a general matter, the Exchange has regulatory jurisdiction over its member organizations and any person or entity controlling a member organization. The Exchange also has regulatory jurisdiction over a subsidiary or affiliate of a member organization that is in the securities business. A member organization subsidiary or affiliate that does business only in commodities would not be subject to BSE jurisdiction, but the Exchange could obtain certain information regarding the activities of such subsidiary or affiliate through reciprocal agreements with regulatory organizations of which such subsidiary or affiliate is a member. 24 The proposed section also states that, in connection with trading physical gold, gold futures or options on gold futures, or any other gold derivatives (including the Shares), the specialist shall not use any material nonpublic information received from any person associated with a member or employee of such person regarding trading by such person or employee in physical gold, gold futures or options on gold futures, or any other gold derivatives. h. Suitability Under the general principals of customer suitability, as discussed in BSE Chapter VII, Section 2, before a member, member organization, allied member, or employee of such member organization undertakes to recommend a transaction in the Shares, such member or member organization should make a determination that the Shares are suitable for such customer. Before any recommendation is made with respect to the Shares, the person making the recommendation should have a reasonable basis for believing at the time of making the recommendation that the customer has such knowledge and experience in financial matters that he or she may reasonably be expected to be capable of evaluating the risks and any special characteristics of the recommended transaction, and is financially able to bear the risks of the recommended transaction. i. Information Circular The Exchange will distribute an information circular to its members in connection with the trading in the Shares. The circular will discuss the special characteristics and risks of trading this type of security. Specifically, the circular, among other things, will discuss what the Shares are, how a Basket is created and redeemed, the requirement that members and member firms deliver a prospectus to investors purchasing the Shares prior to or concurrently with the confirmation of a transaction, applicable Exchange rules, dissemination information regarding the indicative price of gold and the IIV, trading information, and the applicability of the Exchange suitability rule. The information circular will also explain that the Trust is subject to various fees and expenses described in the Registration Statement, and that the number of ounces of gold required to create a Basket or to be delivered upon a redemption of a Basket will gradually decrease over time because the Shares comprising a Basket will represent a decreasing amount of gold due to the sale of the Trust's gold to pay the Trust's expenses. The information circular will also reference the fact that there is no regulated source of last-sale information regarding physical gold, and that the Commission has no jurisdiction over the trading of gold as a physical commodity. In the information circular, members and member organizations will be informed that procedures for purchases and redemptions of the Shares in Baskets and that the Shares are not individually redeemable but are redeemable only in Basket-size aggregations or multiples thereof. The information circular will also advise members of their suitability obligations with respect to recommended transactions to customers in the Shares. The circular will also discuss any relief if granted by the Commission or the staff from any rules under the Act. The information circular will likewise disclose that the NAV for the Shares will be calculated as of the earlier of the London p.m. fix for such day or 12 p.m. Eastern Time each day that BSE is open for trading. 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) of the Act, 25 in general, and furthers the objectives of Section 6(b)(5) of the Act, 26 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, 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. 25 15 U.S.C. 78f(b). 26 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 would 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. 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-BSE-2004-54 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-2004-54. 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 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-2004-54 and should be submitted on or before April 21, 2005. IV. Commission's Findings and Order Granting Accelerated Approval of the Proposed Rule Change The Commission finds that the proposed rule change, as amended, is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. 27 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act, 28 which requires that an exchange have rules designed, among other things, 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 Commission believes that the proposal will benefit investors by increasing competition among markets that trade GLD. 27 In approving the proposal, the Commission has considered its impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 28 15 U.S.C. 78f(b)(5). In addition, the Commission believes that the proposal is consistent with Section 12(f) of the Act, 29 which permits an exchange to trade, pursuant to UTP, a security that is listed and traded on another exchange. 30 The Commission notes that it previously approved the listing and trading of the Shares on NYSE. 31 The Commission also believes that the proposal is consistent with Rule 12f-5 under the Act, 32 which provides that an exchange shall not extend UTP to a security unless the exchange has in effect a rule or rules providing for transactions in the class or type of security to which the exchange extends UTP. The Exchange represented that it meets this requirement because it deems the Shares to be equity securities, thus rendering trading in the Shares subject to the existing rules of the Exchange governing the trading of equity securities, including rules relating to ITS, trading halts, odd-lots, and the minimum trading increment. 29 15 U.S.C. 78 *l* (f). 30 Section 12(a) of the Act, 15 U.S.C. 78 *l* (a), generally prohibits a broker-dealer from trading a security on a national securities exchange unless the security is registered on that exchange pursuant to Section 12 of the Act. Section 12(f) of the Act excludes from this restriction trading in any security to which an exchange “extends UTP.” When an exchange extends UTP to a security, it allows its members to trade the security as if it were listed and registered on the exchange even though it is not so listed and registered. 31 *See* NYSE Approval Order, *supra* note 3. 32 17 CFR 240.12f-5. The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act, 33 which sets forth Congress's finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Quotations for and last sale information regarding GLD are disseminated through the Consolidated Quotation System. Furthermore, as noted by the Exchange, various means exist for investors to obtain reliable gold price information and thereby to monitor the underlying spot market in gold relative to the NAV of their Shares. Additionally, the Trust's Web site will provide an updated IIV at least every 15 seconds. If the Trust ceases to maintain or to calculate the IIV or if the IIV ceases to be widely available, the Exchange would cease trading GLD. 33 15 U.S.C. 78k-1(a)(1)(C)(iii). The Commission notes that, if GLD were to be delisted by NYSE, the Exchange would no longer have authority to trade GLD pursuant to this order. In support of the proposal, the Exchange made the following representations: 1. The Exchange's surveillance procedures for reviewing trading in GLD will be sufficient to detect and deter manipulation and comparable to the procedures used for reviewing trading in other securities (including ETFs) on the Exchange. In addition, the Exchange entered into an MOU with NYMEX for the sharing of information related to any financial instrument based, in whole or in part, upon an interest in or the performance of gold. 2. The Exchange will distribute an information circular prior to the commencement of trading of GLD on the Exchange that explains its terms, characteristics, and risks of trading GLD. 3. The Exchange will require a member organization with a customer that purchases the Shares on the Exchange to provide that customer with a product prospectus and will note this prospectus delivery requirement in the information circular. This approval order is conditioned on the Exchange's adherence to these representations. Finally, the Commission believes that the Exchange's rules imposing trading restrictions and information barriers on specialists in GLD are reasonable and consistent with the Act. These rules generally require a specialist to report to the Exchange a list of all accounts for trading gold or gold derivatives over which the specialist exercises investment discretion or has an interest. Furthermore, specialists and their affiliated persons will be required to make available to the Exchange, upon request, their books and records pertaining to transactions in gold and gold derivatives. The Commission finds good cause for approving the proposal prior to the 30th day after the date of publication of the notice of filing thereof in the **Federal Register** . As noted previously, the Commission previously found that the listing and trading of GLD on NYSE is consistent with the Act. 34 The Commission presently is not aware of any regulatory issue that should cause the Commission to revisit that earlier finding or preclude the trading of GLD on the Exchange pursuant to UTP. Therefore, accelerating approval of the proposal should benefit investors by creating, without undue delay, additional competition in the market for GLD. 34 *See supra* note 3. V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 35 that the proposed rule change (SR-BSE-2004-54) as amended, is approved on an accelerated basis. 35 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 36 36 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-1410 Filed 3-30-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51429; File No. SR-CBOE-2004-58] Self-Regulatory Organizations; Order Granting Accelerated Approval to a Proposed Rule Change and Amendments No. 1 and 2 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendments No. 3 and 4 to the Proposed Rule Change by the Chicago Board Options Exchange, Incorporated Relating to Market-Maker Quoting Obligations and Market-Maker Appointments March 24, 2005. I. Introduction On August 19, 2004, the Chicago Board Options Exchange, Incorporated (“CBOE” 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 amend existing CBOE rules and to adopt new rules governing quoting by CBOE Market-Makers (“Market-Makers” or “MMs”). On February 2, 2005, CBOE filed Amendment No. 1 to the proposed rule change. 3 On February 17, 2005, CBOE filed Amendment No. 2 to the proposed rule change. 4 The proposed rule change and Amendments No. 1 and 2 were published for comment in the **Federal Register** on March 1, 2005. 5 The Commission received no comments on the proposal. On March 18, 2005, CBOE filed Amendment No. 3 to the proposed rule change. 6 On March 23, 2005, CBOE filed Amendment No. 4 to the proposed rule change. 7 This order approves the proposed rule change and Amendments No. 1 and 2 on an accelerated basis, and publishes notice of and grants accelerated approval to Amendments No. 3 and 4 thereto. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced and superceded CBOE's original 19b-4 filing in its entirety. 4 Amendment No. 2 replaced and superceded CBOE's original 19b-4 filing and Amendment No. 1 in their entirety. 5 *See* Securities Exchange Act Release No. 51234 (February 22, 2005), 70 FR 10006 (“Notice”). 6 In Amendment No. 3, CBOE proposes to
(1)amend the reference date contained in CBOE Rule 8.3A from January 6 to March 18, 2005,
(2)adopt on a one-year pilot basis that portion of proposed CBOE Rule 8.3(c) governing a MM's ability to quote from a location outside of his/her trading station,
(3)adopt procedures governing “temporary appointments” during the rollout of its Initial Remote Market-Market (“RMM”) Appointment Process (“IRAP”), and
(4)incorporate changes to the rule language as a result of the approval of a corresponding CBOE rule filing relating to RMMs. *See* Securities Exchange Act Release No. 51366 (March 14, 2005), 70 FR 13217 (March 18, 2005) (order approving “RMM filing”). The text of Amendment No. 3 is available on CBOE's Web site ( *http://www.cboe.com* ), at the CBOE's Office of the Secretary, and at the Commission's Public Reference Room. 7 In Amendment No. 4, CBOE proposes to amend CBOE Rule 8.3(c) to codify that any MM affiliated with an RMM would be prohibited from submitting electronic quotations from outside of its appointed trading station in any class in which the affiliated RMM has an appointment. This prohibition was specifically published for comment in the Notice. *See* Notice, *supra* note 5, at footnote 13 (“* * * *See also* proposed CBOE Rule 8.4(c)(i) in the Exchange's proposed RMM filing. The same prohibition would apply to MMs affiliated with RMMs and is contingent upon SEC approval of the Exchange's RMM filing * * *”). The text of Amendment No. 4 is available on CBOE's Web site ( *http://www.cboe.com* ), at the CBOE's Office of the Secretary, and at the Commission's Public Reference Room. II. Discussion CBOE's Hybrid Trading System merges the electronic and open outcry trading models, offering market participants the ability to stream electronically their own firm disseminated market quotes representing their trading interest. On July 12, 2004, the Commission approved a CBOE proposal to add a new category of market participant called “e-DPMs,” who function as remote competing specialists in their allocated securities. By contrast, regular Designated Primary Market-Makers (“DPMs”) and MMs on CBOE are required to operate from within their appointed trading station. 8 Under the current proposal, CBOE proposes to grant its MMs the ability to stream quotes from locations other than their appointed trading stations. 9 Accordingly, CBOE proposes to amend its rules governing the MM appointment process (CBOE Rule 8.3) and MM quoting obligations (CBOE Rule 8.7). 8 The current Hybrid rules allow MMs on CBOE to stream electronic quotes only when they are physically present in their appointed trading stations. 9 For example, rather than “calling in sick” to work and thereby relinquishing the ability to quote altogether, a MM would be able to stream quotes from his/her home office. This proposal, as amended, only allows current MMs to quote remotely ( *i.e.* , from outside of their appointed trading stations) on a one-year pilot basis. *See* proposed CBOE Rule 8.3(c). *See also* CBOE Rule 8.4 and RMM filing for rules governing Remote Market-Makers. 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 10 and, in particular, the requirements of Section 6 of the Act 11 and the rules and regulations thereunder. The Commission specifically finds that the proposed rule change, as amended, is consistent with Section 6(b)(5) of the Act 12 in that 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. 10 In approving this proposed rule change, as amended, 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. 78f. 12 15 U.S.C. 78f(b)(5). A. Market-Maker Appointments Currently, a MM's appointment consists of all classes traded at a particular trading station, regardless of the number of classes actually trading at that station and regardless of whether the MM owns or leases a membership. In addition, CBOE Rule 8.3(c) currently provides that MMs may have appointments in up to ten trading stations on the floor. The Exchange proposes to amend these requirements in several respects. As proposed, a MM's appointment would confer the right to quote in open outcry all classes traded on the Exchange, regardless of the trading station at which they are located. 13 A MM's appointment would also confer the right to quote electronically in all Hybrid classes traded on the Hybrid Trading System that are located in one designated/appointed trading station, and, with respect to Hybrid 2.0 Classes (as defined in CBOE Rule 1.1(aaa)), the ability to submit electronic quotations in up to 40 classes for each Exchange membership it owns or up to 30 classes for each Exchange membership it leases, all of which must be located in the MM's one appointed trading station. 14 However, a MM affiliated with an e-DPM or an RMM would be prohibited from submitting electronic quotations from outside of its appointed trading station in any class in which the affiliated e-DPM or affiliated RMM has an appointment. 15 13 For margin purposes, these transactions would qualify as MM transactions. 14 If a trading station consists of fewer than 40
(30)Hybrid 2.0 Classes, each MM that owns (leases) a membership would be eligible to submit electronic quotations in each of the Hybrid 2.0 Classes at that trading station, in accordance with the requirements of CBOE Rule 8.3A. In addition, Amendment No. 3 places MMs ability to quote electronically in his/her appointed Hybrid and Hybrid 2.0 classes from a location outside of his/her appointed trading station on a one-year pilot. *See* proposed CBOE Rule 8.3(c). 15 *See* CBOE Rules 8.93(vii) and 8.4(c)(ii). *See also* Amendment No. 4. Under the proposal, a MM that trades in open outcry away from his/her appointed trading station would be restricted to open outcry trading only for classes at that trading station and would not be eligible to quote electronically in those classes until such time that the MM notifies the Exchange of his/her request to change his/her appointment and such request is approved in accordance with CBOE's rules. On any day a MM trades in open outcry outside of his/her appointed trading station, that MM may be required to undertake market-making obligations in those classes in which the MM trades in open outcry at the request of the Order Book Official. 16 16 *See* CBOE Rule 8.7(c), discussed *infra* . The proposal limits a MM's appointments to the classes located at one trading station. In Hybrid, MMs currently may only stream quotes where they are physically present in the trading crowd, which in essence already creates a “one trading station” appointment. 17 As is the case today, MMs would continue to be able to leave one trading station and trade in another trading station; however, they would be required to notify the Exchange *prior* to switching trading stations and request an appointment in the classes located at a new trading station, which would be granted on a space-available basis (as described in more detail in CBOE Rule 8.3A). A MM's ability to trade in non-appointed classes would be limited to submitting orders for automatic execution pursuant to CBOE Rules 6.8 or 6.13. 18 17 The Exchange represents that it is gradually transferring all equity classes to the Hybrid Trading System and anticipates having all such classes on Hybrid within the first quarter of 2005. 18 As part of its appointment, a MM may trade in open outcry all classes located on the Exchange. *See* proposed CBOE Rule 8.7(b)(iii) for the permissible methods by which MMs may submit quotes and orders in appointed and non-appointed classes. CBOE Rule 6.8 applies to non-Hybrid classes, while CBOE Rule 6.13 applies to Hybrid classes. Proposed CBOE Rule 8.3(c) provides that a MM would be presumed to have an appointment in all non-Hybrid 2.0 classes located at his/her appointed trading station unless the MM specifically indicates to the Exchange that he/she does not want to include a particular class(es) as part of his/her appointment (“excluded classes”). 19 When a MM excludes a class, the Exchange would be able to provide an appointment in that excluded class to a MM that does not currently trade that class but who has an interest in doing so. A MM is not eligible to submit electronic quotations into any class it designates as an excluded class. Any request by a MM to receive a subsequent appointment in a previously excluded class would be handled in accordance with CBOE Rule 8.3A. 19 Because MMs must specifically designate which Hybrid 2.0 Classes they would trade as part of their appointment, there is no need to have them designate which Hybrid 2.0 Classes they would not trade. The Commission believes that the proposed amendments to CBOE Rule 8.3 to allow MMs the ability to stream quotes electronically from remote locations outside of a MM's appointed trading station are consistent with the Act. B. Market-Maker Quoting Obligations The Exchange proposes several changes to CBOE Rule 8.7 to accommodate MMs quoting from outside of their appointed trading stations. The Exchange proposes to revise CBOE Rule 8.7(b)(i) to obligate MMs to compete with other MMs to improve markets in all series of options classes comprising the MM's appointment, whether trading electronically or in person. In addition, the Exchange proposes to amend CBOE Rule 8.7(b)(iii) in two primary respects. The first change proposes to obligate a MM to update quotes in his/her appointed classes at the trading station where the MM quotes, whether in person or electronically. The second change is designed to clarify the permissible methods by which a MM may submit quotes and orders in both appointed and non-appointed classes. Specifically, proposed CBOE Rule 8.7(b)(iii)(A) provides that, with respect to trading in appointed classes:
(1)MMs who are physically present in their appointed trading station may enter quotes and orders in their appointed classes by public outcry in response to a request for a quote or, in classes in which Hybrid or Hybrid 2.0 is implemented, through an Exchange-approved electronic interface via an Exchange-approved quote generation device;
(2)MMs may also enter quotes and orders in their appointed Hybrid and Hybrid 2.0 classes from outside of their appointed trading stations (pursuant to CBOE Rule 8.3) through an Exchange-approved electronic interface via an Exchange-approved quote generation device; and
(3)MMs, whether physically present in their appointed trading stations or not, may also submit orders for automatic execution in accordance with the requirements of CBOE Rules 6.8 or 6.13. Proposed CBOE Rule 8.7(b)(iii)(B) provides that, with respect to trading in non-appointed classes, MMs may submit orders for automatic execution in accordance with the requirements of CBOE Rules 6.8 or 6.13. 20 20 In this regard, CBOE Rule 8.3 also would prohibit a MM from quoting electronically into a non-appointed class. The Exchange also proposes changes to CBOE Rule 8.7(c) to ensure that a MM who trades in classes located outside of his appointed trading station would be required to fulfill all obligations imposed by CBOE Rule 8.7(b) and, for the rest of the trading day, the MM may be called back to that station to make markets in open outcry in the classes in which he/she traded. Current CBOE Rule 8.7(d) governs market-making obligations in Hybrid classes. Generally, the extent of a MM's obligations is dictated by the amount of volume a MM transacts electronically. The Exchange intends to retain CBOE Rule 8.7(d)(i) 21 and to amend CBOE Rule 8.7(d)(ii). As amended, MMs that transact more than 20% of their volume electronically would be obligated to comply with the bid-ask width requirements of CBOE Rule 8.7(b)(iv), 22 maintain continuous quotes for at least ten contracts in 60% of the series of his/her appointed classes, 23 and respond to all open outcry requests for quotes with a ten-up, legal width market. 24 Proposed for elimination is the tiered continuous quoting requirement that is dependent upon the amount of volume transacted electronically on the Exchange. CBOE believes an across-the-board 60% quoting requirement is simpler and more effective. 21 CBOE Rule 8.7(d)(i) applies to MMs that transact less than 20% of their contract volume electronically. 22 Bid-ask width requirements are currently $5 except during the opening rotation. 23 A MM's undecremented quote must be for ten contracts unless the underlying market disseminates a 1-up market, in which case MMs who have automated the process may similarly quote 1-up. This “1-up” pilot program is scheduled to expire on August 17, 2005. *See* CBOE Rules 8.7(d)(i)(B) and (d)(ii)(B). 24 Only MMs physically present in a trading station would have the ability to provide markets in open outcry. The Exchange also proposes changes to Interpretations and Policies .03 to CBOE Rule 8.7. All MMs would still be required to comply with CBOE Rule 8.7.03(A), which requires 75% of a MM's volume to be in his/her appointed classes. The Exchange intends to retain the in-person requirement contained in current paragraph (B), but limit its application to non-Hybrid classes. Because MMs would have the ability to quote from outside of their appointed trading stations, CBOE believes that an in-person requirement no longer makes sense. 25 The Exchange further proposes changes to Interpretations and Policies .09 to CBOE Rule 8.7 to clarify the applicability of the rule to a MM electronically quoting outside of his/her appointed trading station in accordance with proposed CBOE Rule 8.3(c). 25 A MM's ability to quote electronically from outside of its appointed trading station is limited to appointed Hybrid and Hybrid 2.0 classes, as described and proposed in CBOE Rule 8.3(c). The Commission believes that the proposed changes to MM quoting obligations are appropriate to accommodate MMs' ability to electronically stream quotes in their appointed Hybrid classes and appointed Hybrid 2.0 classes from outside of their appointed trading stations. As such, the Commission finds the changes to CBOE Rule 8.7 relating to MM obligations to be consistent with the Act. C. Amendments No. 3 and 4 to the Proposed Rule Change Amendment No. 3 to the proposed rule change
(1)amends the reference date contained in CBOE Rule 8.3A,
(2)adopts on a one-year pilot basis that portion of proposed CBOE Rule 8.3(c) governing a MM's ability to quote electronically from outside his/her appointed trading station,
(3)adopts procedures governing “temporary appointments,” and
(4)incorporates changes to rule language as a result of the approval of CBOE's RMM filing. 26 26 *See* RMM filing, *supra* note 6. 1. Changing the Grandfather Date From January 6 to March 18, 2005 CBOE Rule 8.3A establishes procedures for determining the maximum number of market participants that may quote electronically in a given class. As part of those procedures, the Exchange has used a January 6, 2005 “grandfather” date for the purpose of determining who will be entitled to quote electronically. The Exchange proposes to amend this rule to substitute March 18, 2005, as the new “grandfather” date. 27 Using a later date allows the Exchange to ensure that members would be “grandfathered” into the crowds in which they are quoting as of a date that is more close to the actual rollout of its RMM program. 28 27 The practical effect of this rule is to ensure that the DPMs, all MMs, and all e-DPMs would be guaranteed the ability to quote electronically in products trading at their primary trading stations as of March 18, 2005. CBOE represents that there were no products as of this date for which the number of members quoting electronically exceeded the Class Quoting Limit (“CQL”) for that product. 28 The Exchange made a similar change in Amendment No. 2 to the RMM filing when it “pushed back” the previous “grandfather” date from December to January 6, 2005. *See* RMM filing, *supra* note 6, for a more detailed description of the RMM program. 2. Adoption of CBOE Rule 8.3(c) on Pilot Basis One of the proposed changes to CBOE Rule 8.3(c) would allow a MM to submit electronic quotations from a location outside of the appointed trading station in his/her appointed Hybrid classes and his/her appointed Hybrid 2.0 Classes. The Exchange proposes to further amend this aspect of the rule such that it is on a one-year pilot basis. As part of a pilot program, the Exchange would have the ability to evaluate this provision's effectiveness. At the end of the one-year period, based upon the conclusions reached, the Exchange could propose to extend the pilot or request permanent approval, in which case it would need to submit a rule filing pursuant to Section 19 of the Act and receive Commission approval. Alternatively, the Exchange could determine to allow this provision to lapse, in which case MMs no longer would have the ability to quote from outside of their appointed trading stations. 3. “Temporary Appointments” The Exchange proposes to adopt procedures governing the ability of MMs to change their appointed trading stations from the period between the “grandfather” date (described above) and the end of the IRAP. The IRAP is the process by which Exchange will grant appointments to RMMs and it will work on a time priority basis. The Exchange expects the process to begin the week of April 18, 2005 and to be finalized by April 22, 2005. In this regard, the purpose of these procedures is to enable the Exchange to know with certainty the number of electronic appointments that will be available in each product during the IRAP. If MMs that receive “grandfathered” appointments were able to change their trading stations, it would be extremely difficult for the Exchange to know with certainty how many electronic appointments were available on a per product basis. For this reason, the Exchange proposes that, for the limited period from March 21, 2005, through the end of the IRAP, MMs would be able to switch trading stations, albeit on a temporary basis, as described below. Under proposed Interpretations and Policies .02 to CBOE Rule 8.3A (“Temporary Appointments” for the Period from March 21, 2005 through the end of the Initial RMM Appointment Process), the following procedures would apply to MMs' requests to change their appointed trading stations during the period commencing March 21, 2005, and lasting until the end of the IRAP. 1. Beginning March 21, 2005, until the termination of the IRAP, all MM requests to change their appointed trading stations would be granted on a temporary basis (“temporary appointment”), provided the CQL for the requisite product has not been met ( *i.e.* , on a space-available basis, as described in Rule 8.3A.01). Each temporary appointment terminates at 3:15 p.m.
(CT)on the last day of the IRAP, at which point all MMs' appointed trading stations would revert to the appointed trading station the MM held on March 18, 2005. 2. In order to receive a permanent appointment in a product in which a MM previously held a temporary appointment, a MM must participate in the IRAP and be allocated such product. 3. Upon termination of the IRAP, all MM (including RMM) requests for appointments and/or appointed trading stations would be handled subject to the requirements of Rule 8.3A (Class Quoting Limits) and in accordance with the appointment procedures of Rules 8.3 (MM appointments) and 8.4 (RMM appointments), as applicable. Amendment No. 4 to the proposed rule change proposes to amend CBOE Rule 8.3(c) to codify that any MM affiliated with an RMM would be prohibited from submitting electronic quotations from outside of its appointed trading station in any class in which the affiliated RMM has an appointment. 29 29 *See supra* note 7. The Commission believes that the proposed changes in Amendment No. 3 are necessary and appropriate to allow the Exchange to commence its IRAP knowing exactly how many electronic quoting appointments would be available in each of the products included in the RMM program based on the number of grandfathered MM appointments in particular classes. This certainty would enable the appointment process to operate efficiently and expediently. In addition, the Commission believes that placing that portion of proposed CBOE Rule 8.3(c) governing MMs' ability to stream electronic quotes from locations outside of their appointed trading stations on a one-year pilot should allow the Exchange ample opportunity to evaluate the effectiveness such pilot. Furthermore, the Commission notes that the proposed amendment to CBOE Rule 8.3(c) in Amendment No. 4 simply incorporates into the proposed rule a prohibition against a MM affiliated with an RMM from streaming electronic quotes from outside of his/her appointed trading station into any class in which the affiliated RMM has an appointment. 30 As a result, the Commission finds that Amendments No. 3 and 4 are consistent with the Act. 30 The Commission notes that this prohibition was specifically published for comment in the Notice. *See supra* note 5. D. Accelerated Approval of the Proposed Rule Change and Amendments No. 1, 2, 3 and 4 The Commission finds good cause for approving the proposed rule change and Amendments No. 1, 2, 3, and 4 thereto prior to the thirtieth day after the amendment is published for comment in the **Federal Register** pursuant to Section 19(b)(2) of the Act. 31 The Commission believes that accelerating approval of the proposal, as amended, is necessary to the proper operation of the CBOE's Hybrid Trading System and Hybrid 2.0 Platform because it would allow MMs to quote electronically from outside of their appointed trading stations at approximately the same time that CBOE begins the rollout of its RMM program, and would allow CBOE to commence its IRAP with a better understanding of how many electronic appointments would be available in products included in the RMM program. The Commission therefore believes that accelerated approval of the proposed rule change and Amendments No. 1, 2, 3, and 4 is appropriate, and finds that it is consistent with the Act. 31 15 U.S.C. 78s(b)(2). III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendments No. 3 and 4 to the proposed rule change are 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-2004-58 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-2004-58. 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 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-2004-58 and should be submitted on or before April 21, 2005. IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 32 that the 32 15 U.S.C. 78s(b)(2). proposed rule change (SR-CBOE-2004-58), as amended, be approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 33 33 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E5-1408 Filed 3-30-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51430; File No. SR-CHX-2005-03] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto by the Chicago Stock Exchange, Inc. Relating to Participant Fees and Credits March 24, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 2 thereunder, notice is hereby given that on March 1, 2005, the Chicago Stock Exchange, Inc. (“CHX” 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 CHX. On March 18, 2005, the Exchange filed Amendment No. 1 to the proposal to clarify three issues in the original filing. 3 The proposed rule change has been filed by the CHX as establishing or changing a due, fee, or other charge, pursuant to Section 19(b)(3)(A)(ii) of the Act, 4 and Rule 19b-4(f)(2) 5 thereunder, 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 *See* Form 19b-4, dated March 18, 2005 (“Amendment No. 1”), which replaced the original filing in its entirety. The Exchange filed Amendment No. 1 to:
(a)Remove the inadvertent underlining of the term “Tape B” in the proposed rule text;
(b)clarify the language in footnote 8 by using the term “NBBO” instead of using both the terms “NBBO” and “ITS BBO” when confirming how CHXpress orders will be handled when they would improperly lock or cross the best bid or offer in the market; and
(c)clarify that the Exchange proposes to classify as “Designated CHX Securities” all securities in which the CHXpress functionality is enabled. For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on March 18, 2005, the date the Exchange 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 CHX proposes to amend its Participant Fee Schedule to exempt, from the fixed fees paid by specialist firms, securities in which CHXpress TM orders are processed by the Exchange. Below is the text of the proposed rule change. Proposed new language is in *italics* . Participant Fees and Credits E. Specialist Fixed Fees Except in the case of Tape B Exemption Eligible Securities (as defined above in Section D), *and Designated CHXpress Securities (as defined below),* which shall be exempt from assessment of fixed fees, specialists will be assigned a fixed fee per assigned stock on a monthly basis, to be calculated as follows: *“Designated CHXpress Securities” are those issues which have been designated by the Exchange on a monthly basis as fixed-fee exempt.* 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 CHX 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 CHX 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 stated that it is rolling out a new, automated functionality for the handling of particular orders, called CHXpress. TM According to the Exchange, the CHXpress functionality is designed to provide additional opportunities for the Exchange's participants to seek and receive liquidity through automated executions of orders at the Exchange. 6 With a few exceptions, CHXpress orders will be executed immediately and automatically against same or better-priced orders in the specialist's book, or against the specialist's quote (when that functionality is available). 7 If a CHXpress order cannot be immediately executed, it will be placed in the specialist's book for instantaneous display or later execution. 8 A CHX specialist may not cancel or place a CHXpress order on hold or otherwise prevent the order-sending firm from canceling the order. 6 *See* Securities Exchange Act Release No. 50481 (Sept. 30, 2004); 69 FR 60197 (Oct. 7, 2004) (SR-CHX-2004-12). 7 CHXpress orders will not be executed if those executions would improperly trade-through another ITS market or if trading in the issue had been halted. CHXpress orders that would improperly trade through an ITS market or that are received during a trading halt will be cancelled. If trading in an issue has been halted, CHXpress orders in the book will be cancelled. 8 A CHXpress order will be instantaneously and automatically displayed when it constitutes the best bid or offer in the CHX book. *See* Article XX, Rule 37(b)11(D). CHXpress orders, like all other orders at the Exchange, will not be eligible for automated display if that display would improperly lock or cross the NBBO. A CHXpress order that would improperly lock or cross the NBBO will be cancelled. CHXpress orders cannot be excluded from the CHX's quote. The Exchange stated that this new functionality currently is available in select issues, and the Exchange plans to extend the use of this functionality to additional issues in upcoming weeks. The Exchange also stated that the implementation of the CHXpress functionality has been somewhat slower than it anticipated because of the need for the Exchange to focus on other trading system improvements. According to the Exchange, two CHXpress-related projects—to automate the execution of inbound ITS commitments and to provide for the automatic execution of a specialist's quote—are among the projects that have not yet been completed. 9 9 The Exchange stated that it is also working to enhance its systems' ability to process the many order messages that will be sent when the CHXpress functionality is rolled out to all securities. The Exchange stated that it has seen that the firms currently using this functionality typically will send an order and, if the order is not immediately executed, will send an immediate cancellation message. In general terms, these messages greatly increase the number of slots (one slot for each message) that must be available within the Exchange's systems. The Exchange believes that the CHXpress functionality has provided the speed and certainty sought by some of the Exchange's participants and plans to extend the functionality to new securities over the next several weeks. According to the Exchange, CHX specialist firms, on the other hand, have noted that they will be best able to handle issues associated with the automatic execution of CHXpress orders when inbound ITS commitments are automatically executed and when they can display (and have automatically executed) their manual proprietary quotes—issues that will be addressed with upcoming systems work. 10 In the interim, the Exchange is proposing to exempt, from the specialist fixed fees, all securities in which CHXpress orders are processed by the Exchange. 11 The Exchange intends to identify these securities, on a monthly basis, at the beginning of each month, based on business factors including the interest demonstrated by order-sending firms in trading a particular security. The Exchange stated that the CHXpress functionality would be enabled for these Designated CHXpress Securities throughout the month. 10 According to the Exchange, it is currently possible for a specialist to receive an ITS commitment seeking execution at a displayed quote, and to be in the process of manually executing that commitment, when a CHXpress order seeking execution against the same interest automatically executes at that price. In these situations, a specialist is obligated to fill the earlier-received ITS commitment, even though the displayed bid or offer has already been satisfied. The Exchange believes that the automatic execution of inbound ITS commitments would resolve this double liability by taking down (or decrementing, when appropriate) the bid or offer immediately upon the automatic execution of the ITS commitment. Any later-received CHXpress order would then be executed, if possible, against the CHX's updated quote. The Exchange also stated that, when a CHX specialist displays a manual, proprietary bid or offer, the Exchange's systems are not currently able to allow incoming orders, including CHXpress order, to automatically execute against that quote. As a result, in securities where the CHXpress functionality is enabled (and where automated executions are required against displayed quotes), a CHX specialist does not display manual bids and offers. 11 The Exchange stated that the proposed elimination of the fixed fee is designed to compensate specialists for the potential double liability associated with the handling of ITS commitments when CHXpress orders are automatically executing against displayed bids and offers and for their inability to manually post bids and offers in CHXpress-eligible securities. 2. Statutory Basis The CHX believes that the proposed rule change, as amended, 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 provides for the equitable allocation of reasonable dues, fees and other charges among its members. 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 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 imposed by the Exchange. 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. 78s(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, 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-CHX-2005-03 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-CHX-2005-03. 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 CHX. 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-CHX-2005-03 and should be submitted on or before April 21, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E5-1409 Filed 3-30-05; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF STATE [Public Notice 5037] Bureau of Educational and Cultural Affairs
(ECA)Request for Grant Proposals: Tibet Professional, Educational and Cultural Exchange Program *Announcement Type:* New Grant. *Funding Opportunity Number:* ECA/PE/C/WHA/EAP-05-58. *Catalog of Federal Domestic Assistance Number:* 00.000. *Key Dates:* *Application Deadline:* May 9, 2005. Executive Summary The Office of Citizen Exchanges welcomes proposals in an open competition for Tibet Professional, Educational and Cultural Exchange Projects that focus on the themes of Cultural Preservation and Economic Self-sufficiency. The Office seeks proposals that train and assist Tibetans living in Tibetan communities in China by providing professional experience and exposure to American life and culture through internships, workshops and other learning and sharing experiences hosted by local U.S. institutions. The experiences also will provide Americans the opportunity to learn about Tibetan culture and the social and economic challenges Tibetans face today. These two-way exchanges should not be simply academic in nature but should provide practical, hands-on experience in U.S. public or private sector settings that may be adapted to an individual's institution upon return home. Proposals may combine elements of professional enrichment, job shadowing and internships appropriate to the language ability and interests of the participants. Applicants should ensure that their proposals comply with the Tibet Policy Act of 2002, particularly that their projects promote in all stages the active participation of Tibetans. Section 616
(d)of the Foreign Relations Authorization Act, 2003 (Pub. L. 107-228) defines the Tibet Project Principles.
(d)Tibet Project Principles—Projects in Tibet supported by international financial institutions, other international organizations, nongovernmental organizations, and the United States entities referred to in subsection (c), should
(1)Be implemented only after conducting a thorough assessment of the needs of the Tibetan people through field visits and interviews;
(2)Be preceded by cultural and environmental impact assessments;
(3)Foster self-sufficiency and self-reliance of Tibetans;
(4)Promote accountability of the development agencies to the Tibetan people and active participation of Tibetans in all project stages;
(5)Respect Tibetan culture, traditions, and the Tibetan knowledge and wisdom about their landscape and survival techniques;
(6)Be subject to on-site monitoring by the development agencies to ensure that the intended target group benefits;
(7)Be implemented by development agencies prepared to use Tibetan as the working language of the projects;
(8)neither provide incentive for, nor facilitate the migration and settlement of, non-Tibetans into Tibet; and
(9)neither provide incentive for, nor facilitate the transfer of ownership of, Tibetan land or natural resources to non-Tibetans. 1. Funding Opportunity Description Authority Overall grant making authority for this program is contained in the Mutual Educational and Cultural Exchange Act of 1961, Public Law 87-256, as amended, also known as the Fulbright-Hays Act. The purpose of the Act is “to enable the Government of the United States to increase mutual understanding between the people of the United States and the people of other countries * * *; to strengthen the ties which unite us with other nations by demonstrating the educational and cultural interests, developments, and achievements of the people of the United States and other nations * * * and thus to assist in the development of friendly, sympathetic and peaceful relations between the United States and the other countries of the world.” The funding authority for the program above is provided through legislation. Purpose The Office of Citizen Exchanges welcomes proposals that focus on the themes of Cultural Preservation and Economic Self-sufficiency under this competition for FY-2005 Tibet Professional, Educational and Cultural Exchange Projects. Cultural Preservation Projects under this theme should aim to assist Tibetans in preserving their cultural heritage through activities designed to reduce the pillage of irreplaceable cultural heritage and to create opportunities to develop long-term strategies for preserving cultural property through training and conservation, museum development, and public education. Projects might include supporting the preservation of cultural sites; objects in a site, museum or similar institution; or forms of traditional cultural expression. The proposals may encompass topics such as museum needs, historic buildings, collections, archaeological sites, rare manuscripts, language, or traditional arts, crafts, or music. Economic Self-Sufficiency Vocational Education Proposals are sought which emphasize vocational training or administration and development of vocational schools targeted towards the practical needs of Tibetan communities. Discussion of how to integrate education with economic planning, how to diversify revenue sources, and how to recruit, train and retain strong faculty would all contribute towards increased emphasis on vocational education and its importance to both Americans and Tibetans in a modern and changing economy. Vocational education may include practical training of entrepreneurs, development of Tibetan-language educational materials (such as Tibetan-English teaching guides or Tibetan-language public health education materials), or development of distance-learning technology solutions for remote rural schools. English-language training projects that are held in China are preferred over ones that would bring Tibetans to the U.S. for training. Developing Entrepreneurship Projects under this theme may focus on the skills Tibetans, many of whom come from rural backgrounds with rudimentary economies, need to function effectively in a modern economy ( *e.g.* finance, accounting, and language skills). Projects will be favored that explore ways in which both the government and the private sector can help promote sustainable entrepreneurship, including access to credit, ecologically conscious tourism policies and investment, or English language training for trade or tourism purposes. Programs that train budding entrepreneurs and develop micro-finance programs for them are welcome. Sustainable Growth and Eco-Tourism Exchanges funded under this theme would help American and Tibetan conservationists, tourism planners, and economic planners share their experience in managing tourism resources and development projects, particularly in ecologically fragile areas, and would contribute to better understanding of conservation and concepts essential to responsible economic growth. Local community projects are invited in fields such as eco-tourism, renewable energy, or poverty alleviation projects, including farm technology, animal husbandry, or agricultural marketing. II. Award Information *Type of Award:* Grant Agreement. *Fiscal Year Funds:* Fiscal Year 2005. *Approximate Total Funding:* $500,000. *Approximate Number of Awards:* Four. *Approximate Average Award:* $125,000. *Floor of Award Range:* $60,000. *Ceiling of Award Range:* $135,000. *Anticipated Award Date:* September 1, 2005. *Anticipated Project Completion Date:* December 31, 2007. III. Eligibility Information III.1. Eligible applicants Applications may be submitted by public and private non-profit organizations meeting the provisions described in Internal Revenue Code section 26 U.S.C. 501(c)(3). III.2. Cost Sharing or Matching Funds There is no minimum or maximum percentage required for this competition. However, the Bureau encourages applicants to provide maximum levels of cost sharing and funding in support of its programs. When cost sharing is offered, it is understood and agreed that the applicant must provide the amount of cost sharing as stipulated in its proposal and later included in an approved grant agreement. Cost sharing may be in the form of allowable direct or indirect costs. For accountability, you must maintain written records to support all costs that are claimed as your contribution, as well as costs to be paid by the Federal government. Such records are subject to audit. The basis for determining the value of cash and in-kind contributions must be in accordance with OMB Circular A-110, (Revised), Subpart C.23—Cost Sharing and Matching. In the event you do not provide the minimum amount of cost sharing as stipulated in the approved budget, ECA's contribution will be reduced in like proportion. III.3. Other Eligibility Requirements Grants awarded to eligible organizations with less than four years of experience in conducting international exchange programs will be limited to $60,000. IV. Application and Submission Information Note: Please read the complete **Federal Register** announcement before sending inquiries or submitting proposals. Once the RFGP deadline has passed, Bureau staff may not discuss this competition with applicants until the proposal review process has been completed. IV.1 Contact Information To Request an Application Package Please contact the Office of Citizen Exchanges, ECA/PE/C, Room 224, U.S. Department of State, SA-44, 301 4th Street, SW., Washington, DC 20547, telephone number 202-453-8154 and fax number 202-453-8168, *McnealDB@state.gov* to request a Solicitation Package. Please refer to the Funding Opportunity Number ECA/PE/C/WHA/EAP-050-58 located at the top of this announcement when making your request. The Solicitation Package contains the Proposal Submission Instruction
(PSI)document that consists of required application forms, and standard guidelines for proposal preparation. Please specify Douglas McNeal and refer to the Funding Opportunity Number ECA/PE/C/WHA/EAP-05-58 located at the top of this announcement on all other inquiries and correspondence. IV.2. To Download a Solicitation Package Via Internet The entire Solicitation Package may be downloaded from the Bureau's Web site at *http://exchanges.state.gov/education/rfgps/menu.htm.* Please read all information before downloading. IV.3. Content and Form of Submission Applicants must follow all instructions in the Solicitation Package. The original and ten copies of the application should be sent per the instructions under IV.3e. “Submission Dates and Times section” below. IV.3a. You are required to have a Dun and Bradstreet Data Universal Numbering System
(DUNS)number to apply for a grant or cooperative agreement from the U.S. Government. This number is a nine-digit identification number, which uniquely identifies business entities. Obtaining a DUNS number is easy and there is no charge. To obtain a DUNS number, access *http://www.dunandbradstreet.com* or call 1-866-705-5711. Please ensure that your DUNS number is included in the appropriate box of the SF-424 which is part of the formal application package. IV.3b. All proposals must contain an executive summary, proposal narrative and budget. Please Refer to the Solicitation Package. It contains the mandatory Proposal Submission Instructions
(PSI)document for additional formatting and technical requirements. IV.3c. You must have nonprofit status with the IRS at the time of application. If your organization is a private nonprofit which has not received a grant or cooperative agreement from ECA in the past three years, or if your organization received nonprofit status from the IRS within the past four years, you must submit the necessary documentation to verify nonprofit status as directed in the PSI document. Failure to do so will cause your proposal to be declared technically ineligible. IV.3d. Please take into consideration the following information when preparing your proposal narrative: IV.3d.1 *Adherence To All Regulations Governing The J Visa.* The Office of Citizen Exchanges of the Bureau of Educational and Cultural Affairs is the official program sponsor of the exchange program covered by this RFGP, and an employee of the Bureau will be the “Responsible Officer” for the program under the terms of 22 CFR part 62, which covers the administration of the Exchange Visitor Program (J visa program). Under the terms of 22 CFR part 62, organizations receiving grants under this RFGP will be third parties “cooperating with or assisting the sponsor in the conduct of the sponsor's program.” The actions of grantee program organizations shall be “imputed to the sponsor in evaluating the sponsor's compliance with” 22 CFR part 62. Therefore, the Bureau expects that any organization receiving a grant under this competition will render all assistance necessary to enable the Bureau to fully comply with 22 CFR part 62 *et seq.* The Bureau of Educational and Cultural Affairs places great emphasis on the secure and proper administration of Exchange Visitor (J visa) Programs and adherence by grantee program organizations and program participants to all regulations governing the J visa program status. Therefore, proposals should *explicitly state in writing* that the applicant is prepared to assist the Bureau in meeting all requirements governing the administration of Exchange Visitor Programs as set forth in 22 CFR part 62. If your organization has experience as a designated Exchange Visitor Program Sponsor, the applicant should discuss their record of compliance with 22 CFR part 62 *et seq.* , including the oversight of their Responsible Officers and Alternate Responsible Officers, screening and selection of program participants, provision of pre-arrival information and orientation to participants, monitoring of participants, proper maintenance and security of forms, record-keeping, reporting and other requirements. The Office of Citizen Exchanges of ECA will be responsible for issuing DS-2019 forms to participants in this program. A copy of the complete regulations governing the administration of Exchange Visitor
(J)programs is available at *http://exchanges.state.gov* or from: United States Department of State, Office of Exchange Coordination and Designation, ECA/EC/ECD—SA-44, Room 734, 301 4th Street, SW., Washington, DC 20547, Telephone:
(202)401-9810, FAX:
(202)401-9809. IV.3d.2 *Diversity, Freedom and Democracy Guidelines.* Pursuant to the Bureau's authorizing legislation, programs must maintain a non-political character and should be balanced and representative of the diversity of American political, social, and cultural life. “Diversity” should be interpreted in the broadest sense and encompass differences including, but not limited to ethnicity, race, gender, religion, geographic location, socio-economic status, and disabilities. Applicants are strongly encouraged to adhere to the advancement of this principle both in program administration and in program content. Please refer to the review criteria under the ‘Support for Diversity’ section for specific suggestions on incorporating diversity into your proposal. Public Law 104-319 provides that “in carrying out programs of educational and cultural exchange in countries whose people do not fully enjoy freedom and democracy,” the Bureau “shall take appropriate steps to provide opportunities for participation in such programs to human rights and democracy leaders of such countries.” Public Law 106-113 requires that the governments of the countries described above do not have inappropriate influence in the selection process. Proposals should reflect advancement of these goals in their program contents, to the full extent deemed feasible. IV.3d.3. *Program Monitoring and Evaluation.* Proposals must include a plan to monitor and evaluate the project's success, both as the activities unfold and at the end of the program. The Bureau recommends that your proposal include a draft survey questionnaire or other technique plus a description of a methodology to use to link outcomes to original project objectives. The Bureau expects that the grantee will track participants or partners and be able to respond to key evaluation questions, including satisfaction with the program, learning as a result of the program, changes in behavior as a result of the program, and effects of the program on institutions (institutions in which participants work or partner institutions). The evaluation plan should include indicators that measure gains in mutual understanding as well as substantive knowledge. Successful monitoring and evaluation depend heavily on setting clear goals and outcomes at the outset of a program. Your evaluation plan should include a description of your project's objectives, your anticipated project outcomes, and how and when you intend to measure these outcomes (performance indicators). The more that outcomes are “smart” (specific, measurable, attainable, results-oriented, and placed in a reasonable time frame), the easier it will be to conduct the evaluation. You should also show how your project objectives link to the goals of the program described in this RFGP. Your monitoring and evaluation plan should clearly distinguish between program *outputs* and *outcomes* . *Outputs* are products and services delivered, often stated as an amount. Output information is important to show the scope or size of project activities, but it cannot substitute for information about progress towards outcomes or the results achieved. Examples of outputs include the number of people trained or the number of seminars conducted. *Outcomes,* in contrast, represent specific results a project is intended to achieve and is usually measured as an extent of change. Findings on outputs and outcomes should both be reported, but the focus should be on outcomes. We encourage you to assess the following four levels of outcomes, as they relate to the program goals set out in the RFGP (listed here in increasing order of importance): 1. *Participant satisfaction* with the program and exchange experience. 2. *Participant learning,* such as increased knowledge, aptitude, skills, and changed understanding and attitude. Learning includes both substantive (subject-specific) learning and mutual understanding. 3. *Participant behavior,* concrete actions to apply knowledge in work or community; greater participation and responsibility in civic organizations; interpretation and explanation of experiences and new knowledge gained; continued contacts between participants, community members, and others. 4. *Institutional changes,* such as increased collaboration and partnerships, policy reforms, new programming, and organizational improvements. Please note: Consideration should be given to the appropriate timing of data collection for each level of outcome. For example, satisfaction is usually captured as a short-term outcome, whereas behavior and institutional changes are normally considered longer-term outcomes. Overall, the quality of your monitoring and evaluation plan will be judged on how well it
(1)specifies intended outcomes;
(2)gives clear descriptions of how each outcome will be measured;
(3)identifies when particular outcomes will be measured; and
(4)provides a clear description of the data collection strategies for each outcome ( *i.e.* , surveys, interviews, or focus groups). (Please note that evaluation plans that deal only with the first level of outcomes [satisfaction] will be deemed less competitive under the present evaluation criteria.) Grantees will be required to provide reports analyzing their evaluation findings to the Bureau in their regular program reports. All data collected, including survey responses and contact information, must be maintained for a minimum of three years and provided to the Bureau upon request. IV.3e. Please take the following information into consideration when preparing your budget: IV.3e.1. Applicants must submit a comprehensive budget for the entire program. Awards may not exceed $135,000. There must be a summary budget as well as breakdowns reflecting both administrative and program budgets. Applicants may provide separate sub-budgets for each program component, phase, location, or activity to provide clarification. IV.3e.2. Allowable costs for the program include the following: *Travel costs:* International and domestic airfares; visas; transit costs; ground transportation costs. Please note that all air travel must be in compliance with the Fly America Act. There is no charge for J-1 visas for participants in Bureau sponsored programs. Please note that Tibetan participants may not travel to the U.S. primarily for English language instruction. *Per Diem:* For the U.S. program, organizations have the option of using a flat $160/day for program participants or the published U.S. Federal per diem rates for individual American cities. For activities outside the U.S., the published Federal per diem rates must be used. NOTE: U.S. escorting staff must use the published Federal per diem rates, not the flat rate. Per diem rates may be accessed at *http://www.policyworks.gov/* . *Interpreters:* If needed, interpreters for the U.S. program are available through the U.S. Department of State Language Services Division. Typically, a pair of simultaneous interpreters is provided for every four visitors who need interpretation. Bureau grants do not pay for foreign interpreters to accompany delegations from their home country. Grant proposal budgets should contain a flat $160/day per diem for each Department of State interpreter, as well as home-program-home air transportation of $400 per interpreter plus any U.S. travel expenses during the program. Salary expenses are covered centrally and should not be part of an applicant's proposed budget. Locally arranged interpreters with adequate skills and experience may be used by the grantee in lieu of State Department interpreters, with the same 1:4 interpreter to participant ratio. Costs associated with using their services may not exceed rates for U.S. Department of State interpreters. *Book and cultural allowance:* Foreign participants are entitled to and escorts are reimbursed a one-time cultural allowance of $150 per person, plus a participant book allowance of $50. U.S. program staff members are not eligible to receive these benefits. *Consultants:* Consultants may be used to provide specialized expertise, design or manage development projects or to make presentations. Honoraria generally do not exceed $250 per day. Subcontracting organizations may also be used, in which case the written agreement between the prospective grantee and subcontractor should be included in the proposal. Subcontracts should be itemized in the budget. *Room rental:* Room rental may not exceed $250 per day. Materials development: Proposals may contain costs to purchase, develop, and translate materials for participants. *Equipment:* Proposals may contain limited costs to purchase equipment crucial to the success of the program, such as computers, fax machines and copy machines. However, equipment costs must be kept to a minimum, and costs for furniture are not allowed. *Working Meal:* The grant budget may provide for only one working meal during the program. Per capita costs may not exceed $5-8 for a lunch and $14-20 for a dinner, excluding room rental. The number of invited guests may not exceed participants by more than a factor of two-to-one. Interpreters must be included as participants. *Return travel allowance:* A return travel allowance of $70 for each foreign participant may be included in the budget. This may be used for incidental expenses incurred during international travel. *Health Insurance:* Foreign participants will be covered under the terms of a U.S. Department of State-sponsored health insurance policy. The premium is paid by the U.S. Department of State directly to the insurance company. Applicants are permitted to included costs for travel insurance for U.S. participants in the budget. *Administrative Costs:* Costs necessary for the effective administration of the program may include salaries for grant organization employees, benefits, and other direct or indirect costs per detailed instructions in the proposal submission instructions. Please refer to the Solicitation Package for complete budget guidelines and formatting instructions. IV.3f. *Submission Dates and Times: Application Deadline Date:* Monday, May 9, 2005. *Explanation of Deadlines:* Due to heightened security measures, proposal submissions must be sent via a nationally recognized overnight delivery service ( *i.e.* , DHL, Federal Express, UPS, Airborne Express, or U.S. Postal Service Express Overnight Mail, etc.) and be shipped no later than the above deadline. The delivery services used by applicants must have in-place, centralized shipping identification and tracking systems that may be accessed via the Internet and delivery people who are identifiable by commonly recognized uniforms and delivery vehicles. Proposals shipped on or before the above deadline but received at ECA more than seven days after the deadline will be ineligible for further consideration under this competition. Proposals shipped after the established deadlines are ineligible for consideration under this competition. It is each applicant's responsibility to ensure that each package is marked with a legible tracking number and to monitor/confirm delivery to ECA via the Internet. ECA will *not* notify you upon receipt of application. Delivery of proposal packages *may not* be made via local courier service or in person for this competition. Faxed documents will not be accepted at any time. Only proposals submitted as stated above will be considered. Applications may not be submitted electronically at this time. Applicants must follow all instructions in the Solicitation Package. Important note: When preparing your submission please make sure to include one extra copy of the completed SF-424 form and place it in an envelope addressed to “ECA/EX/PM”. The original and ten copies of the application should be sent to: U.S. Department of State, SA-44, Bureau of Educational and Cultural Affairs, Ref.: ECA/PE/C/WHA/EAP-05-58, Program Management, ECA/EX/PM, Room 534, 301 4th Street, SW., Washington, DC 20547. Along with the Project Title, all applicants must enter the above Reference Number in Box 11 on the SF-424 contained in the mandatory Proposal Submission Instructions
(PSI)of the solicitation document. IV.3g. *Intergovernmental Review of Applications:* Executive Order 12372 does not apply to this program. Applicants must also submit the “Executive Summary” and “Proposal Narrative” sections of the proposal in text (.txt) format on a PC-formatted disk. The Bureau will provide these files electronically to the appropriate Public Affairs Section(s) at the U.S. embassy(ies) for its (their) review. V. Application Review Information V.1. Review Process The Bureau will review all proposals for technical eligibility. Proposals will be deemed ineligible if they do not fully adhere to the guidelines stated herein and in the Solicitation Package. All eligible proposals will be reviewed by the program office, as well as the Public Diplomacy section overseas, where appropriate. Eligible proposals will be subject to compliance with Federal and Bureau regulations and guidelines and forwarded to Bureau grant panels for advisory review. Proposals may also be reviewed by the Office of the Legal Adviser or by other Department elements. Final funding decisions are at the discretion of the Department of State's Assistant Secretary for Educational and Cultural Affairs. Final technical authority for assistance awards grants resides with the Bureau's Grants Officer. Review Criteria Technically eligible applications will be competitively reviewed according to the criteria stated below. These criteria are not rank ordered and all carry equal weight in the proposal evaluation: 1. *Program Planning and Ability To Achieve Objectives:* Program objectives should be stated clearly and should reflect the applicant's expertise in the subject area and region. Objectives should respond to the priority topics in this announcement and should relate to the current conditions in the target country/countries. A detailed agenda and relevant work plan should explain how objectives will be achieved and should include a timetable for completion of major tasks. The substance of workshops, internships, seminars and/or consulting should be described in detail. Sample training schedules should be outlined. Responsibilities of proposed in-country partners should be clearly described. 2. *Institutional Capacity:* Proposals should include
(1)the institution's mission and date of establishment;
(2)detailed information about proposed in-country partner(s) and the history of the partnership;
(3)an outline of prior awards—U.S. government and/or private support received for the target theme/country/region; and
(4)descriptions of experienced staff members who will implement the program. The proposal should reflect the institution's expertise in the subject area and knowledge of the conditions in the target country/countries. Proposals should demonstrate an institutional record of successful exchange programs, including responsible fiscal management and full compliance with all reporting requirements for past Bureau grants as determined by Bureau Grants Staff. The Bureau will consider the past performance of prior recipients and the demonstrated potential of new applicants. Proposed personnel and institutional resources should be adequate and appropriate to achieve the program's goals. The Bureau strongly encourages applicants to submit letters of support from proposed in-country partners. 3. C *ost Effectiveness and Cost Sharing:* Overhead and administrative costs in the proposal budget, including salaries, honoraria and subcontracts for services, should be kept to a minimum. Priority will be given to proposals whose administrative costs are less than thirty
(30)percent of the total funds requested from the Bureau. Applicants are strongly encouraged to cost share a portion of overhead and administrative expenses. Cost sharing, including contributions from the applicant, proposed in-country partner(s), and other sources should be included in the budget request. Proposal budgets that do not reflect cost sharing will be deemed not competitive in this category. 4. *Support of Diversity:* Proposals should demonstrate substantive support of the Bureau's policy on diversity. Achievable and relevant features should be cited in both program administration (selection of participants, program venue and program evaluation) and program content (orientation and wrap-up sessions, program meetings, resource materials and follow-up activities). Applicants should refer to the Bureau's Diversity, Freedom and Democracy Guidelines in the Proposal Submission Instructions
(PSI)and the Diversity, Freedom and Democracy Guidelines section above for additional guidance. 5. *Post-Grant Activities:* Applicants should provide a plan to conduct activities after the Bureau-funded project has concluded in order to ensure that Bureau-supported programs are not isolated events. Funds for all post-grant activities must be in the form of contributions from the applicant or sources outside of the Bureau. Costs for these activities should not appear in the proposal budget, but should be outlined in the narrative. 6. *Evaluation:* Proposals should include a detailed plan to evaluate the program. Applicants must identify objectives that respond to our goals listed in the RFGP. Objectives should state what the concrete results of the program would be. Clearly stated objectives are needed to enable an evaluation plan to determine whether the program has done what it has set out to do. Applicant's staff must plan to evaluate the project's success, after each program phase and at the completion of the program activity. As part of the evaluation process, your evaluation plan should clearly distinguish between program outputs and outcomes. Outputs are the units of service (number of participants, number of events conducted, number of documents translated or distributed). Outcomes are the impacts on individual participants in the exchanges, the larger beneficiary audience, and institutional structures. Findings on outputs and outcomes should both be reported, but the focus should be on outcomes. The more that outcomes are “smart” (specific, measurable, attainable, results-oriented, and placed in a reasonable time frame), the stronger will be the evaluation. The Bureau also requires that grantee institutions submit a final narrative and financial report. VI. Award Administration Information VI.1. Award Notices Final awards cannot be made until funds have been appropriated by Congress, allocated and committed through internal Bureau procedures. Successful applicants will receive an Assistance Award Document
(AAD)from the Bureau's Grants Office. The AAD and the original grant proposal with subsequent modifications (if applicable) shall be the only binding authorizing document between the recipient and the U.S. Government. The AAD will be signed by an authorized Grants Officer, and mailed to the recipient's responsible officer identified in the application. Unsuccessful applicants will receive notification of the results of the application review from the ECA program office coordinating this competition. VI.2 Administrative and National Policy Requirements Terms and Conditions for the Administration of ECA agreements include the following: Office of Management and Budget Circular A-122, “Cost Principles for Nonprofit Organizations.” Office of Management and Budget Circular A-21, “Cost Principles for Educational Institutions.” OMB Circular A-87, “Cost Principles for State, Local and Indian Governments”. OMB Circular No. A-110 (Revised), Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Nonprofit Organizations. OMB Circular No. A-102, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments. OMB Circular No. A-133, Audits of States, Local Government, and Non-profit Organizations. Please reference the following websites for additional information: *http://www.whitehouse.gov/omb/grants* . *http://exchanges.state.gov/education/grantsdiv/terms.htm#articleI* . VI.3. Reporting Requirements You must provide ECA with a hard copy original plus two copies of the following reports: 1. A final program and financial report no more than 90 days after the expiration of the award; 2. A program report should be submitted after each program phase. 3. A financial report will be submitted quarterly. Grantees will be required to provide reports analyzing their evaluation findings to the Bureau in their regular program reports. (Please refer to IV. Application and Submission Instructions (IV.3.d.3) above for Program Monitoring and Evaluation information. All data collected, including survey responses and contact information, must be maintained for a minimum of three years and provided to the Bureau upon request. All reports must be sent to the ECA Grants Officer and ECA Program Officer listed in the final assistance award document. VII. Agency Contacts For questions about this announcement, contact: Douglas McNeal, Office of Citizen Exchanges, ECA/PE/C Room 216, ECA/PE/C/WHA/EAP-05-58, U.S. Department of State, SA-44, 301 4th Street, SW., Washington, DC 20547, telephone number 202-453-8154 and fax number 202-453-8168, e-mail address *mcnealDB@state.gov* . All correspondence with the Bureau concerning this RFGP should reference the above title and number ECA/PE/C/WHA/EAP-05-58. Please read the complete **Federal Register** announcement before sending inquiries or submitting proposals. Once the RFGP deadline has passed, Bureau staff may not discuss this competition with applicants until the proposal review process has been completed. VIII. Other Information Notice The terms and conditions published in this RFGP are binding and may not be modified by any Bureau representative. Explanatory information provided by the Bureau that contradicts published language will not be binding. Issuance of the RFGP does not constitute an award commitment on the part of the Government. The Bureau reserves the right to reduce, revise, or increase proposal budgets in accordance with the needs of the program and the availability of funds. Awards made will be subject to periodic reporting and evaluation requirements per section VI.3 above. Dated: March 25, 2005. C. Miller Crouch, Principal Deputy Assistant Secretary, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 05-6384 Filed 3-30-05; 8:45 am]
Connectionstraces to 8
8 references not yet in our index
  • 17 CFR 240.19
  • 15 USC 78
  • 17 CFR 240.12
  • Pub. L. 107-228
  • Pub. L. 87-256
  • 22 CFR 62
  • Pub. L. 104-319
  • Pub. L. 106-113
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cites case law
Rules and Regulations
SECURITIES AND EXCHANGE COMMISSION
U.S.C.§ 78s
U.S.C.§ 78f
U.S.C.§ 552
U.S.C.§ 78c
U.S.C.§ 78k–1
C.F.R.§ 200.30-3
U.S.C.§ 501
Fed. Reg.Notices
Cite17 CFR 240.19
Cite15 USC 78
Cite17 CFR 240.12
Pub. L.Pub. L. 107-228
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