Notices. SECURITIES AND EXCHANGE COMMISSION

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BILLING CODE 6325-38-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51567; File No. SR-AMEX-2003-66] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment Nos. 1, 2, 3, 4, 5, 6 and 7 Thereto by the American Stock Exchange LLC Relating to the Listing and Trading of Trust Issued Receipts Based on a Single Issuer April 18, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act” or “Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on June 26, 2003 the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange.

On January 30, 2004, the Commission received Amendment No. 1 to the proposed rule change. 3 On May 10, 2004, the Exchange submitted Amendment No. 2 to the proposed rule change. 4 On August 16, 2004, the Exchange submitted Amendment No. 3 to the proposed rule change. 5 On November 8, 2004, the Exchange submitted Amendment No. 4 to the proposed rule change. 6 On January 14, 2005, the Exchange submitted Amendment No. 5 to the proposed rule change. 7 On April 4, 2005, the Exchange submitted Amendment No. 6 to the proposed rule change. 8 On April 15, 2005, the Exchange submitted Amendment No. 7 to the proposed rule change. 9 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* letter from Jeffrey P.

Burns, Associate General Counsel, Amex, to Florence Harmon, Senior Special Counsel, Division of Market Regulation (“Division”), Commission, dated January 28, 2004 (“Amendment No. 1”). Amendment No. 1 revised the original proposal to require the underlying securities in Single TIRs (as defined herein) to meet the market capitalization requirements for equity linked term notes in Rule 107B(d) of the Amex Company Guide (“Company Guide”), modified maintenance listing standards for Single TIRS to increase the minimum amount of receipts required to be outstanding, revised the proposed rule text to allow odd lot trading in Single TIRs, provided a more detailed explanation of how Single TIRs would function, clarified that either Susquehanna Investment Group or an affiliate would be the initial depositor for the Single TIR, and rescinded its earlier request for relief from Commission Rule 10a-1. 4 *See* letter from Jeffrey P.

Burns, Associate General Counsel, Amex, to Nancy J. Sanow, Assistant Director, Division, Commission, dated May 7, 2004 (“Amendment No. 2”). In Amendment No. 2, Amex revised the proposed rule text to require Single TIRs to comply with requirements imposed on equity linked term notes in Rule 107B(e) and

(f)of the Company Guide, added rule text requiring a firewall around affected personnel in the event that a broker-dealer selects the underlying security of a Single TIR, added rule text requiring the Exchange to consider distributing guidance to member firms regarding compliance responsibilities for a Single TIR before its issue, and added a representation in the discussion that Single TIRs are exempt from Commission Rule 10A-3. 5 *See* letter from Jeffrey P. Burns, Associate General Counsel, Amex, to Nancy J. Sanow, Assistant Director, Division, Commission, dated August 13, 2004 (“Amendment No. 3”). In Amendment No. 3, Amex extended the application of Rule 107B(e) and

(f)of the Company Guide to Single TIR underlying securities issued by U.S. issuers as well as foreign issuers, added a requirement that a minimum of 150,000 receipts be outstanding when trading in a Single TIR commences, and eliminated a provision of the proposed rule text deemed to be redundant. Amendment No. 3 also provided guidance on the applicability of Commentary .05 of Amex Rule 190 to Single TIRs. 6 *See* letter from Jeffrey P. Burns, Associate General Counsel, Amex, to Nancy J. Sanow, Assistant Director, Division, Commission, dated November 8, 2004 (“Amendment No. 4”). In Amendment No. 4, Amex added Commentary .13 to Amex Rule 170 to provide a limited exception for specialists in Single TIRs to buy on plus ticks and/or sell on minus ticks to bring a Single TIR into parity with the underlying security. 7 In Amendment No. 5, Amex provided:

(1)A clarification of the fee structure in connection with Single TIRs;

(2)a revision to the continued listing standards stating that an underlying security must be registered pursuant to Section 12 of the Exchange Act;

(3)a revision to the eligibility requirements for a component security of a Single TIR;

(4)the addition of Commentary .05 to Amex Rule 1202 proposing that side-by-side trading and integrated market making is not permitted in connection with Single TIRs;

(5)a description of the trading halt provisions applicable to Single TIRs; and

(6)a description of the prospectus delivery requirements. 8 In Amendment No. 6, Amex made the following revisions:

(1)A clarification in the continuing listing standard for TIRs in Amex Rule 1202 that each component security must be listed on a national securities exchange or traded through the facilities of Nasdaq and reported national market system security;

(2)an amendment to proposed Commentary .03(a)(iii) providing that each component security must be a security of a U.S. or foreign issuer that meets the requirements of Section 107B(f) of the Company Guide (and not

(d)and (e));

(3)the addition of paragraph

(f)in proposed Commentary .03 providing that for the continued trading of a Single TIR, the underlying security must be eligible for standardized equity options trading pursuant to Amex Rule 916;

(4)the addition of proposed Commentary .06 regarding trading halts and

(5)the addition of proposed Commentary .07 regarding the allowable percentages set forth in Section 107B(f) of the Company Guide. 9 In Amendment No. 7, Amex revised rule text in proposed subsection

(f)of Commentary .03 of Amex Rule 1202 to clarify that the equity component of a Single TIR must be eligible for standardized equity options trading. I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to add new Commentaries .03, .05, .06, and .07 to Amex Rule 1202 to accommodate the listing and trading of trust issued receipts based on the common stock of single U.S. corporate issuers or qualified foreign issuers (the “Underlying Company”). The Exchange also proposes to add new Commentary .13 to Amex Rule 170 to allow a limited exception for specialists in Single TIRs to buy on plus ticks and/or sell on minus ticks to bring the Single TIR into parity with the underlying securities. The text of the proposed rule change is attached hereto as Exhibit A and is also available on the Amex Web site *http://www.amex.com,* at the principal office of Amex, 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, Amex included statements concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Under Amex Rule 1201, the Exchange may approve for listing and trading trust issued receipts (“TIRs”) 10 based on one or more securities. 11 The Amex in this proposal seeks to list for trading under Amex Rule 1202, TIRs representing ownership interests in a trust, the assets of which will consist of either the common stock of a single, U.S. corporate issuer or the stock of non-U.S. companies traded in the U.S. market as sponsored American Depositary Receipts, ordinary shares or otherwise (collectively, “foreign securities”) that is listed and traded on a national securities exchange or quoted through The Nasdaq Stock Market, Inc. (“Single TIRs”). The Exchange proposes that the minimum number of receipts or Single TIRs required to be outstanding when trading commences be 150,000. The Exchange expects Susquehanna Investment Group (“SIG”) to offer Single TIRs under the trade name of “BIGS.” 12 10 A TIR is defined in Amex Rule 1200(b) as a security

(a)that is issued by a trust which holds specified securities deposited with the trust;

(b)that, when aggregated in some specified minimum number, may be surrendered to the trust by the beneficial owner to receive the securities; and

(c)that pays beneficial owners dividends and other distributions on the deposited securities, if any are declared and paid to the trustee by an issuer of the deposited securities. 11 The Exchange defines a “security” or “securities” to include stocks, bonds, options, and other interests or instruments commonly known as securities. *See* Amex Constitution, Article I, Section 3(j). Pursuant to Commentary .01 to Amex Rule 1202, initially, no component security of a TIR may represent more than 20% of the overall value of the receipt. If the portfolio of securities underlying the TIR drops to fewer than nine, the SRO will consult with the Commission staff to confirm the appropriateness of continued listing of such TIR. *See* Securities Exchange Act Release No. 41892 (September 21, 1999), 64 FR 52559 (September 29, 1999) (“TIR Approval Order”). 12 SIG, or an affiliate of SIG, intends to form one or more single purpose grantor trusts that will issue BIGS. Bank of New York (“BNY”), a state-chartered bank that is a member of the Federal Reserve System and meeting the standards specified in Section 26(a)(1) of the Investment Company Act of 1940 (the “1940 Act”), will act as trustee. The BIGS trust will not be a registered investment company under the 1940 Act. Each trust will be formed under a depositary trust agreement among SIG or its affiliate, as the initial depositor, the trustee and the registered owners and beneficial owners of BIGS issued by that trust. SIG or an affiliate, as the initial depositor, will capitalize each trust through purchases of the Underlying Company or other transactions by depositing the common stock of the Underlying Company into the trust. The sole asset of each trust will be the common stock of the Underlying Company. Introduction In September 1999, the Exchange adopted rules for the listing and trading of TIRs. 13 TIRs are negotiable receipts issued by trusts that represent investors' discrete identifiable and undivided beneficial ownership interest in the securities deposited into the trust. Since that time, the Exchange has listed 17 TIRs under the trade name of HOLDRS, 14 representing a wide variety of industry sectors and the market as a whole. The original HOLDR was the Internet HOLDR. 13 *See* TIR Approval Order. 14 *See* HOLDRS No-Action Letter infra note 17 and Registration No. 333-78575 filed with the Commission on September 23, 1999 pursuant to Rule 424 (b)(4) CIK No. 00007286(2). To accommodate the listing of additional TIRs, the Exchange in September 2000 revised the existing listing criteria and trading rules to permit the listing and trading, including pursuant to unlisted trading privileges, of TIRs pursuant to Rule 19b-4(e) under the Act (the “Generic Listing Standards”). 15 In order to efficiently list TIRs without submitting a separate rule filing with the Commission for each TIR, the Exchange, consistent with Rule 19b-4(e) under the Act, requires, among other things, evidence of sufficient size, liquidity and non-concentration of the underlying component securities of the TIR. 16 Because of the structure of Single TIRs, the Exchange believes that the current Generic Listing Standards require revision to include the listing and trading of TIRs on the common stock of a single U.S. corporate issuer or qualified foreign securities. As a result, the Exchange submits this proposed rule change for the purpose of adding Commentaries .03, .05, .06, and .07 to Amex Rule 1202 to permit the listing and trading of Single TIRs, including pursuant to Rule 19b-4(e), under the Exchange Act and also submits related proposed Commentary .13 to Amex Rule 170. 15 Commission Rule 19b-4(e), adopted on December 8, 1998, permits the Exchange to list and trade new derivative securities products without submitting a proposed rule change, provided the Exchange has in place trading rules, procedures, a surveillance program and listing standards that pertain to the class of securities covering the new product. *See* Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998). 16 Commentary .01 of Amex Rule 1202 currently provides the eligibility criteria for component securities represented by a series of a TIR as follows:

(1)Each component security must be registered under Section 12 of the Exchange Act;

(2)each component security must have a minimum public float of at least $150 million;

(3)each component security must be listed on a U.S. national securities exchange or traded through the facilities of The Nasdaq Stock Market, Inc. (“Nasdaq”) and a reported national market system security;

(4)each component security must have an average daily trading volume of at least 100,000 shares during the preceding sixty-day trading period;

(5)each component security must have an average daily dollar value of shares traded during the preceding sixty-day trading period of at least $1 million; and

(6)the most heavily weighted component security may not initially represent more than 20% of the overall value of the TIR. Listing Criteria Under Amex Rule 1201, the Exchange may list and trade TIRs based on one or more securities. The securities that are included in a series of a TIR are required to be selected by the Exchange or its agent, a wholly-owned subsidiary of the Exchange, or by such other person as shall have a proprietary interest in such TIRs. 17 Pursuant to Amex Rule 1201, the Exchange submits that it may designate Single TIRs for trading. 17 SIG Indices, LLLP, an affiliate of SIG, will determine the particular Underlying Company stock to be included in each BIGS trust. Under proposed Commentary .03 to Amex Rule 1202, Single TIRs would have eligibility criteria that would conform substantially to the initial and continued listing standards for all TIRs under Amex Rule 1202(a) and (b). 18 The proposed rule text would also modify the continued listing criteria in Amex Rule 1202(b) to provide that each component security of any TIR must be registered under Section 12 of the Exchange Act and listed on a national securities exchange or traded through Nasdaq and reported as a national market system security; and the proposed rule for Single TIRs also includes these requirements. The Single TIRs trust will be formed under a depositary trust agreement, among the trustee, an initial depositor, and other depositors, if any, and the holders of Single TIRs (the “Single TIR Trust” or “Trust”). 19 18 The initial listing standards set forth in Amex Rule 1202(a) provide that the Exchange must establish a minimum number of Single TIRs required to be outstanding at the time of the commencement of trading on the Exchange. The proposed Commentary .03(c) to Amex Rule 1202 would establish that minimum number at 150,000 receipts for all Single TIRs. The continued listing guidelines for all TIRs are set forth in Rule 1202(b) and currently state that the Exchange will consider the suspension of trading in or removal from listing of a trust upon which a series of TIRs is based under any of the following circumstances:

(1)If the trust has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of Trust Issued Receipts for 30 or more consecutive trading days;

(2)if the trust has fewer than 50,000 receipts issued and outstanding;

(3)if the market value of all receipts issued and outstanding is less than $1,000,000; or

(4)if such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. In addition, for Single TIRs, the component equity security must continue to be eligible for standardized equity options trading. Upon termination of a trust, the Exchange requires that any TIRs issued in connection with such trust be removed from Exchange listing. In addition, a trust may terminate in accordance with the provisions of the trust prospectus, which may provide for termination if the value of securities in the trust falls below a specified amount. 19 The trust is not a registered investment company under the 1940 Act. See SEC No-Action Letter dated September 3, 1999 to Merrill Lynch, Pierce, Fenner & Smith Incorporated, providing relief from registration as a management investment company under the 1940 Act for HOLDRS (the “HOLDRS No-Action Letter”). The Underlying Company Securities The common stock of the Underlying Company or the stock of a foreign issuer (hereinafter the term “common stock” will refer to both the common stock of the Underlying Company and the stock of a foreign issuer) for each Single TIR will meet the requirements set forth in proposed Commentary .03 to Amex Rule 1202. These requirements are substantially similar to the existing criteria for TIRs found in Commentary .01 to Amex Rule 1202. The primary differences in new Commentary .03 relate to the omission of the concentration prohibition in paragraph

(vi)of Commentary .01 and the addition of the equity linked term note requirements for underlying linked stock as set forth in Section 107B(f) of the Amex Company Guide. In particular, the Exchange believes that each Underlying Company in connection with Single TIRs should either be a U.S. company or a non-U.S. company that meets the requirements of Section 107B(f) of the Company Guide. 20 In the case of a Single TIR, the concentration prohibition is not relevant because the structure by definition is “concentrated” in one Underlying Company. The Exchange believes that the proposed criteria for Single TIRs with the addition of the equity linked noted standards for an Underlying Company will help to ensure that a minimum level of liquidity will exist to allow for the maintenance of fair and orderly markets and will serve to ensure that Single TIRs are based on well-capitalized and actively-traded companies. 21 The Exchange submits that the proposed selection criteria will help to ensure that an Underlying Company's common stock is not readily susceptible to manipulation. 22 Furthermore, in the event that the underlying security of a Single TIR is selected by a broker-dealer, or an affiliate of a broker-dealer such as SIG Indices LLLP, the proposed rule change would require that such broker-dealer (or affiliate) erect a firewall around personnel with access to information regarding that selection prior to listing to separate them from the broker-dealer personnel trading the Single TIR or any of the component securities. 20 Section 107B(f) of the Company Guide provides requirements to meet in connection with the listing and trading of equity linked notes based on foreign and U.S. underlying securities. In general, this provision limits the amount of outstanding common shares of an entity that may be linked to a derivative instrument. The Exchange has also set forth, in proposed Commentary .07, that if an issuer proposes to list a Single TIR that relates to more than the allowable percentages set forth in Section 107B(f) of the Company Guide, the Exchange will submit a proposed rule change with the Commission pursuant to Section 19(b)(2) and cannot list and trade such Single TIR until the Commission issues an approval order. 21 An example of such Underlying Companies may include: Lucent Technologies, Inc; Sun Microsystems, Inc.; EMC Corporation; Motorola, Inc.; and Siebel Systems, Inc. 22 The Exchange notes that it currently lists and trades equity linked notes (“ELNs”) on various well-capitalized and actively-traded common stocks pursuant to Section 107B of the Company Guide. *See* Securities Exchange Act Release Nos. 32343 (May 20, 1993), 58 FR 30833 (May 27, 1993); 42582 (March 27, 2000), 65 FR 17685 (April 4, 2000); and 47055 (December 19, 2002), 67 FR 79669 (December 30, 2002) (Amex 2002-110). The requirements noted above in proposed Commentary .03 to Amex Rule 1202 are more stringent than the ELN standards of Section 107B of the Company Guide. The Single TIRs will be comprised solely of shares of the common stock of an Underlying Company. An investment in a Single TIR will accordingly involve risks similar to investing directly in the Underlying Company's common stock. Therefore, the value of the Single TIR will largely depend on the financial performance of the Underlying Company and will be exposed to all the risks associated with an investment in equity securities in general, and, in the common stock of the Underlying Company, in particular. Product Description The Exchange states that Single TIRs are designed to provide investors greater access to lower-priced, highly-capitalized companies while reducing transaction costs by aggregating multiple shares of the Underlying Company's common stock into a single trading instrument. Single TIRs represent an undivided beneficial interest in the underlying securities held by the Single TIR Trust. A holder of a Single TIR may exchange the Single TIR to receive the underlying securities. The Exchange states that the expenses associated with trading Single TIRs are expected to be less than the expenses associated with separately buying and selling the Underlying Company security in a traditional brokerage account. Single TIRs are separate and distinct from the Underlying Company's common stock comprising the portfolio of the Single TIR Trust. In contrast to the prior TIR Approval Order, 23 a Single TIR Trust may issue and retire Single TIRs in both odd-lots and round-lots. 24 Holders of Single TIRs accordingly may obtain, hold, trade or exchange Single TIRs in odd and round lots or multiples thereof. 23 *See* TIR Approval Order. 24 Single TIRs will be evidenced by one or more global certificates that the trustee will deposit with DTC and register in the name of Cede & Co., as nominee for DTC. Single TIRs will be available only in book-entry form. Owners of Single TIRs may hold their Single TIRs through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC. The number of outstanding Single TIRs will increase and decrease as a result of in-kind deposits and withdrawals of the Underlying Company's common stock. The Single TIRs Trust will stand ready to issue additional Single TIRs on a continuous basis when an investor deposits the required securities with the trustee. The initial price for Single TIRs issued to the initial depositor will equal the sum of the closing market price of the Underlying Company's common stock on its primary market on the date of the transaction, multiplied by the “share per receipt ratio amount” 25 to be determined on the date of issuance, plus an issuance fee. 26 The Trust is expected to issue additional Single TIRs on a continuous basis. Investors may acquire Single TIRs in two ways:

(1)through a purchase on the Exchange, or

(2)through an in-kind deposit of the requisite number of the Underlying Company's common stock with the trustee during normal business hours evidencing a trust issued receipt. Investors that create Single TIRs by delivery to the Trust of the requisite Underlying Company common stock will be required to pay an issuance fee. In addition, investors will also be responsible for paying any sales commissions that are charged by a broker in connection with any purchase of the Underlying Company's common stock. In selecting the underlying securities, no investigation or review of the Underlying Company, including the public filings, will be performed by the issuer SIG Indices LLLP or the Exchange, other than to the extent required to determine whether the Underlying Company's common stock satisfies the selection criteria for a Single TIR. 25 The “share per receipt ratio amount” is the number of shares of the Underlying Company's common stock (or multiplier) for each one

(1)Single TIR. Initially, SIG expects this ratio to be ten

(10)shares for each Single TIR. 26 SIG expects the issuance fee to be $5.00 or less for each 100 receipts or portion thereof. After the date of issuance, the “share per receipt ratio amount” for an Underlying Company will not change, except for changes due to corporate events, such as stock splits or reverse stock splits. Under no circumstances will the common stock of a different publicly-traded company be substituted for the Underlying Company's common stock established for the Single TIR. The actual number of shares will be determined on the date of the initial capitalization of the Trust by the initial depositor and will appear in the final prospectus delivered in connection with sales of Single TIRs. 27 As stated above, Single TIRs are designed to provide investors with greater access to lower-priced highly-capitalized companies while reducing transactions cost by aggregating multiple shares of the Underlying Company's common stock into a single trading instrument. 27 As a result of the share per receipt ratio amount or multiplier, the initial issue price will be a multiple of the current price of the common stock of the Underlying Company. For example, the initial issue price of the Single TIR will be $16.60 provided a multiple of ten

(10)and a current price of $1.66 per share for a given stock that qualifies as a Single TIR candidate. In addition, if a Single TIR is surrendered to the trustee, the investor will receive 10 shares of the Underlying Company's common stock for each one

(1)Single TIR. In the event that a Single TIR represents fractional shares due to certain corporate events such as stock splits or reverse stock splits or other corporate distributions, the trustee will deliver cash in lieu of such fractional share. Investors may withdraw the Underlying Company's common stock of a Single TIR upon request by delivering an odd or round lot Single TIR to the trustee during normal business hours. The trustee will charge a cancellation fee for retiring Single TIRs and delivering the deposited securities. 28 To the extent that any exchange of Single TIRs requires the delivery of a fractional share, the trustee will sell such share in the market and deliver cash in lieu of such share. Beneficial owners of Single TIRs will have the same rights and privileges as they would have if they beneficially owned the underlying securities outside of the trust. 29 These include the right of investors to instruct the trustee to vote the securities, the right to receive dividends and other distributions on the underlying securities, if any, and the right to exchange Single TIRs to receive the underlying securities. However, except with respect to the right to vote for dissolution of the Trust, holders of Single TIRs will not have voting rights with respect to the Single TIR Trust. 30 The Trust will not be managed and will remain static over the term of the Trust. 28 SIG expects the cancellation fee to be $5.00 or less for each 100 receipts or portion thereof. 29 The trustee will deliver proxy soliciting materials provided to it by the Underlying Company for the benefit of holders of Single TIRs to give the trustee instructions as to how to vote on matters to be considered at any annual or special meeting of shareholders held by Underlying Company. 30 Beneficial owners of Single TIRs will have the right to vote to dissolve and liquidate the Trust. The Trust will not publish or otherwise calculate the aggregate value of the underlying security represented by a Single TIR. 31 Bid and asked prices will be quoted on a per receipt basis and will be disseminated by the Amex every 15 seconds over the Consolidated Tape Association's Network B. Single TIRs may trade in the secondary market at prices that are lower than the aggregate value of the corresponding underlying security. If, in such case, a holder of a Single TIR wishes to realize the net asset value of the underlying security, that owner will have to exchange the Single TIR. 31 In contrast, the Exchange disseminates at least every 15 seconds over the Consolidated Tape Association's Network B a “per receipt value” or “per share value” for TIRs listed pursuant to Amex Rules 1200, 1201, and 1202 and Commentary .01 of Amex Rule 1202 (which does not reflect the product's fees), due to the fact that the TIR holds multiple securities. The reason that the “per receipt value” currently disseminated for TIRs, such as HOLDRs, does not reflect fees is because the only fees charged are for issuance and cancellation and a trustee custodial fee that is paid out of dividends, if any are declared. See Securities Exchange Act Release No. 41593 (July 1, 1999), 64 FR 37178 (July 9, 1999), note 3. Because Single TIR, such as BIGS, hold only one equity component, for which real-time last sale reporting (and bid and offer quotations) are available, the Exchange does not plan to disseminate the intraday valuation of the product based on the fact that sufficient information exists for intraday valuation of the Single TIR shares. The Exchange states that fee structure for Single TIRs is similar to that of existing products and should not affect the intraday trading valuation of the Single TIR shares. Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 14, 2005. The Exchange believes that Single TIRs will not trade at a material discount or premium to the underlying securities held by the Trust based on potential arbitrage opportunities. The arbitrage process, which provides the opportunity to profit from differences in prices of the same or similar securities, increases the efficiency of the markets and serves to prevent potentially manipulative efforts. If the price of the Single TIR deviates enough from the price of the Underlying Company's common stock to create a material discount or premium, an arbitrage opportunity is created allowing the arbitrageur to either buy the Single TIR at a discount, immediately cancel them in exchange for the Underlying Company's common stock and sell the securities in the cash market at a profit, or sell the Single TIR short at a premium and buy the Underlying Company's common stock represented by the Single TIR to deposit in exchange for the Single TIR to deliver against the short position. In both instances the arbitrageur locks in a profit and the markets move back into line. Prospectus Delivery In connection with the listing and trading of Single TIRs, all investors in Single TIRs who purchase in the initial offering will receive a prospectus. In addition, purchasers of a Single TIR directly from the Trust (by delivering the underlying security to the Trust) will also receive a prospectus. Finally, Amex members purchasing Single TIRs from the Trust for resale to customers will deliver a prospectus to such customers. Fee Structure As set forth in the Registration Statement in connection with the BIGS Trust I, the fee structure involves issuance and cancellation fees, commissions and custody fees. The Bank of New York (“BNY”), as trustee, will charge an issuance fee of $5.00 in connection with the creation of each 100 BIGS or portion thereof. In addition, BNY will charge a cancellation fee of $5.00 for each 100 BIGS or portion thereof surrendered for delivery of the underlying security or proceeds of such security. Brokerage commissions may be charged by a securities broker in connection with the purchase of the underlying security in connection with the creation of the BIGS. In addition, purchases of BIGS on the Exchange may also be subject to brokerage commissions. BNY as trustee also will charge an annual custody fee of $0.02 for each BIGS, deducted from any cash dividend or other cash distributions, if any. For any calendar year, BNY will waive any portion of the custody fee which exceeds the total cash dividends and other cash distributions paid in that year. Termination Events The Single TIR Trust will be terminated if any of the following circumstances occur:

(1)Underlying Company no longer has a class of common stock registered under Section 12 of the Act and the trustee has actual knowledge of such event;

(2)the Commission finds that Underlying Company or the Trust should be registered as an investment company under the 1940 Act, and the trustee has actual knowledge of the Commission finding;

(3)the securities of the Underlying Company are converted or exchanged into, or into a right to receive, securities that are

(i)issued by a company or other entity other than the Underlying Company (with certain exceptions for a recapitalization, reorganization or reincorporation),

(ii)not registered under Section 12 of the Act or

(iii)not listed on a U.S. national securities exchange or included in Nasdaq;

(4)the Underlying Company's common stock is not listed for trading on a U.S. national securities exchange or traded through the facilities of Nasdaq National Market System for five

(5)consecutive business days and the trustee has actual knowledge of such event;

(5)the Single TIRs are delisted from the Amex and are not listed for trading on another U.S. national securities exchange or authorized for quotation on the Nasdaq National Market System within five

(5)business days from the date the Single TIRs are delisted;

(6)the trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to the initial depositor of its intent to resign;

(7)75% of beneficial owners of outstanding Single TIRs vote to dissolve and liquidate the trust; and/or

(8)the withdrawal of such number of Underlying Company common stock from the Trust so that the aggregate value of the Trust's assets fall below a pre-determined amount. Upon termination of the Trust, the beneficial owners will surrender the Single TIRs and the trustee will distribute the underlying securities to the Single TIRs holders. Information Circular The proposed rule change would require the Exchange to evaluate the nature and complexity of each Single TIR, prior to the commencement of its trading, and, if appropriate, distribute and circulate to the membership guidance regarding member firm compliance responsibilities when handling transactions in such securities. In addition, prior to the commencement of trading in Single TIRs, the Exchange will issue a circular to members informing them of, among other things, Exchange policies regarding trading halts in such securities. First, the circular will advise that trading will be halted in the event the market volatility trading halt parameters set forth in Amex Rule 117 have been reached. Second, the circular will advise that, in addition to other factors that may be relevant, the Exchange may consider factors such as the extent to which trading is not occurring in a deposited share(s) and whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present; however, in any event, trading in the Single TIRs will be halted if trading in the underlying equity security is halted because of a regulatory trading halt as defined in Rule 6h-1 under the Exchange Act. In addition, the circular will also discuss the special characteristics and risks of trading Single TIRs. Specially, the circular, among other things, will discuss how the Single TIRs are issued and redeemed from the trust, member prospectus delivery requirements, and applicable Exchange rules, such as the limited exception to Amex Rule 170. The circular will also explain the various fees as described in the Registration Statement. The circular will also advise members of their suitability obligations with respect to a recommended transaction in the Single TIR shares. 32 32 *See* Amex Rule 411. Trading Rules Proposed Commentary .13 of Amex Rule 170 would grant a specialist in a Single TIR a limited exception from Commentaries .01, .02, and .07 of Amex Rule 170. Such exception would allow a specialist in a Single TIR to buy on plus ticks and/or sell on minus ticks for the purpose of bringing the Single TIR into parity with its underlying security. Generally, Single TIRs are equity securities subject to Amex Rules governing the trading of equity securities, including, among others, rules governing priority, parity and precedence of orders, specialist responsibilities, account opening and customer suitability (Amex Rule 411), with the prior approval of a floor official, of a stop or limit order by a quotation (Amex Rule 154, Commentary .04(c)). Initial equity margin requirements of 50% and the regular equity trading hours of 9:30 a.m. to 4 p.m. will apply to transactions in Single TIRs. Unlike HOLDRS, the trading rules pertaining to odd-lot trading in Amex equities (Amex Rule 205) will apply to the trading of Single TIRs, since Single TIRs can be traded in odd-lots. Single TIRs will be deemed “Eligible Securities,” as defined in Amex Rule 230, for purposes of the Intermarket Trading System Plan and therefore will be subject to the trade through provisions of Amex Rule 236 that require that Amex members avoid initiating trade-throughs for ITS securities. Specialist transactions of Single TIRs made in connection with the creation and redemption of Single TIRs will not be subject to the prohibitions of Amex Rule 190. 33 Single TIRs will trade in minimum fractional increments pursuant to Amex Rule 127, resulting in a minimum fractional change of $0.01. Single TIRs will be subject to the short sale rule, Rule 10a-1 under the Act and Regulation SHO under the Act. 34 The Exchange represents that its surveillance procedures applicable to the Single TIRs are adequate to deter manipulation, 35 and will be similar to those used for other TIRs and exchange-traded funds and will incorporate and rely upon existing Amex surveillance procedures governing options and equities. 33 *See* Commentary .05 to Amex Rule 190. 34 17 CFR 240.10a-1; 17 CFR 242.200(g). 35 Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 14, 2005. Proposed Commentary .05 to Amex Rule 1202 also makes clear that Single TIRs may not be traded side-by-side and on an integrated market making basis. Furthermore, the Exchange proposes, in proposed Commentary .06, to halt trading on the Exchange in Single TIRs whenever the Exchange deems such action appropriate in the interests of a fair and orderly market and to protect investors. Among the factors that may be considered are that:

(1)Trading in the underlying security has been halted or suspended in the primary market;

(2)the opening of such underlying security in the primary market has been delayed because of unusual circumstances;

(3)the Exchange has been advised that the issuer of the underlying security is about to make an important announcement affecting such issuer;

(4)other unusual conditions or circumstances are present. To the extent that a security underlying a Single TIR is subject to a regulatory halt as defined in Rule 6h-1 under the Exchange Act, the Exchange will halt or suspend trading in such Single TIR. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act, 36 in general, and furthers the objectives of Section 6(b)(5), 37 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 36 15 U.S.C. 78f(b). 37 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange did not receive any written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(a)No Change.

(b)Continued Listing—Following the initial twelve month period following formation of a Trust and commencement of trading on the Exchange, the Exchange will consider the suspension of trading in or removal from listing of a Trust upon which a series of Trust Issued Receipts is based under any of the following circumstances:

(i)If the Trust has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of Trust Issued Receipts for 30 or more consecutive trading days;

(ii)If the Trust has fewer than 50,000 receipts issued and outstanding;

(iii)If the market value of all receipts issued and outstanding is less than $1,000,000;[or] *(iv) Each component security must be a section 12 security under the Securities Exchange Act of 1934 and listed on a national securities exchange or traded through the facilities of Nasdaq and reported national market system security; or* *(v)* [(iv)] If such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. Upon termination of a Trust, the Exchange requires that Trust Issued Receipts issued in connection with such Trust be removed from Exchange listing. A Trust may terminate in accordance with the provisions of the Trust prospectus, which may provide for termination if the value of securities in the Trust falls below a specified amount. (c)-(e) No Change. Commentary .01 The Exchange may approve a series of Trust Issued Receipts for listing and trading on the Exchange pursuant to Rule 19b-4(e) under the Securities Exchange Act of 1934 (“Act”), provided each of the component securities satisfies the following criteria: Eligibility Criteria for Component Securities Represented by a series of Trust Issued Receipts:

(i)Each component security must be registered under Section 12 of the Exchange Act;

(ii)Each component security must have a minimum public float of at least $150 million;

(iii)Each component security must be listed on a national securities exchange or traded through the facilities of Nasdaq and reported national market system security;

(iv)Each component security must have an average daily trading volume of at least 100,000 shares during the preceding sixty-day trading period;

(v)Each component security must have an average daily dollar value of shares traded during the preceding sixty-day trading period of at least $1 million; and

(vi)The most heavily weighted component security may not initially represent more than 20% of the overall value of the Trust Issued Receipt. .02 The eligibility requirements for Component Securities that are represented by a series of Trust Issued Receipts and that became part of the Trust Issued Receipt when the security was either:

(a)Distributed by a company already included as a Component Security in the series of Trust Issued Receipts; or

(b)received in exchange for the securities of a company previously included as a Component Security that is no longer outstanding due to a merger, consolidation, corporate combination or other event, shall be as follows:

(i)The Component Security must be listed on a national securities exchange or traded through the facilities of Nasdaq and a reported national market system security;

(ii)The Component Security must be registered under Section 12 of the Exchange Act; and

(iii)The Component Security must have a Standard & Poor's Sector Classification that is the same as the Standard & Poor's Sector Classification represented by the Component Securities included in the Trust Issued Receipt at the time of the distribution or exchange. *.03(a) The Exchange may approve a series of Trust Issued Receipts based on a single component security for listing and trading on the Exchange pursuant to Rule 19b-4(e) under the Securities Exchange Act of 1934 (“Act”), provided, the component security satisfies the following criteria:* *Eligibility Criteria for a Single Component Security Represented by a series of Trust Issued Receipts:* *(i) The component security must be registered under Section 12 of the Exchange Act;* *(ii) The component security must be listed on a national securities exchange or traded through the facilities of Nasdaq and reported national market system security;* *(iii) The component security may be a security of a U.S. or foreign issuer that meets the requirements of Section 107B(f) of the Amex Company Guide;* *(iv) The component security must have a minimum public float of at least $150 million;* *(v) The component security must have an average daily trading volume of at least 100,000 shares during the preceding sixty-day trading period;* *(vi) The component security must have an average daily dollar value of shares traded during the preceding sixty-day trading period of at least $1 million.* *(b) A series of Trust Issued Receipts based on a single component equity security may be issued, exchange or traded in round lots and/or odd lots.* *(c) A minimum of 150,000 receipts are required to be outstanding when trading commences.* *

(d)Prior to commencement of trading of securities admitted to listing under this section, the Exchange will evaluate the nature and complexity of the issue and, if appropriate, distribute and circulate to the membership providing guidance regarding member firm compliance responsibilities when handling transactions in such securities. * *(e) If the component security is to be selected by a broker-dealer, the broker-dealer should erect a “firewall” around the personnel who have access to information regarding such selection prior to listing.* *(f) For continued eligibility for trading Single TIRs, the underlying equity security of such Single TIR must be eligible for standardized equity options trading pursuant to Rule 916.* *.04 {Reserved}* *.05 Trust Issued Receipts listed pursuant to Commentary .03 to Rule 1202 (“Single TIRs”) do not qualify for side-by-side trading and integrated market making as set forth in Rule 175(c)(2) and 958(e).* *.06 Single TIR Trading Halts—Trading on the Exchange in Single TIRs shall be halted or suspended whenever the Exchange deems such action appropriate in the interests of a fair and orderly market and to protect investors. Among the factors that may be considered are that:

(1)Trading in the underlying security has been halted or suspended in the primary market;

(2)the opening of such underlying security in the primary market has been delayed because of unusual circumstances;

(3)the Exchange has been advised that the issuer of the underlying security is about to make an important announcement affecting such issuer;

(4)other unusual conditions or circumstances are present. To the extent that a security underlying a Single TIR is subject to a regulatory halt as defined in Rule 6h-1 under the Securities Exchange Act of 1934, the Exchange will halt or suspend trading in such Single TIR.* *.07 If an issuer proposes to list a Single TIR that relates to more than the allowable percentages set forth in Section 107B(f) of the Company Guide, the Exchange will submit a proposed rule change with the Commission pursuant to Section 19(b)(2) and cannot list and trade such Single TIR until the Commission issues an approval order.* [FR Doc. E5-1914 Filed 4-21-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51566; File No. SR-Amex-2004-47] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Listing and Trading of Yield Underlying Participating Securities

(YUPS)April 18, 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 June 10, 2004, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On April 15, 2005, the Exchange submitted Amendment No. 1 to the proposed rule change. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 makes minor typographical edits to the proposed rule text. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to approve for listing and trading Yield Underlying Participating Securities (“YUPS”), representing a beneficial ownership interest in the common stock of a single, publicly-traded company and a series of U.S. Treasury Securities (“Treasury Securities”) with quarterly maturities. YUPS would be eligible for listing and trading, including trading pursuant to unlisted trading privileges, pursuant to Rule 19b-4(e) 4 if the product satisfies the criteria in proposed Commentary .03 of Rule 1202 for “Single TIRs.” 5 YUPS would also be subject to proposed Commentary .13 to Amex Rule 170 6 to allow a limited exception for specialist in Single TIRs, including the YUPS, to buy on plus ticks and/or sell on minus ticks to bring the Single TIR/YUPS into parity with the underlying securities. YUPS would also be subject to the proposed Commentary .05 to Amex Rule 1202, which states that YUPS do not qualify for side-by-side trading and integrated market making as set forth in Amex Rule 175(c)(2) and 985(e). 7 Additionally, YUPS would be subject to proposed Commentary .06 to Amex Rule 1202, regarding trading halts, and proposed Commentary .07 to Amex Rule 1202, regarding allowable percentages set forth in Section 107B of the Amex *Company Guide.* 8 The text of the proposed rule change is available on the Amex's Web site *http://www.amex.com,* at the principal office of the Amex, and at the Commission's Public Reference Room. The text of the proposed rule change appears below. Additions are *italicized,* deletions are bracketed. 4 17 CFR 240.19b-4(e). 5 *See* Securities Exchange Act Release No. 51567 (April 18, 2005) (SR-Amex 2003-66)(”Single TIR Proposal”). 6 This new Commentary .13 to Amex Rule 170 is proposed in the Single TIR Proposal. 7 *See* Single TIR Proposal. 8 *See* Single TIR Proposal. Rule 1202. Initial and Continued Listing Trust Issued Receipts will be listed and traded on the Exchange subject to application of the following criteria: (a)-(e) No Change. Commentary .01 *through* [-.2] *.03* 9 No Change. 9 *See* Single TIR Proposal for text of proposed Commentary .03 to Rule 1202. .04 *A series of Trust Issued Receipts based on a single component security approved for trading pursuant to Commentary .03 of this Rule may also include U.S. Treasury Securities (“Treasury Securities”). Up to 35% of the Trust in such case may consist of Treasury Securities.* *.05 through .07 No Change.* 10 10 *See* Single TIR Proposal for text of proposed Commentaries .05, .06, and .07 to Rule 1202. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Amex included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the placed specified in Item III below. The Amex has prepared summaries, set forth in Section A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Under Amex Rule 1201, the Exchange may approve for listing and trading trust issued receipts (“TIRs”) 11 based on one or more securities. 12 The Amex in this proposal seeks to list for trading under Amex Rule 1202, YUPS, representing ownership interests in a trust, the assets of which will consist of shares of the common stock of a single, publicly-traded company (the “Common Stock”) and a series of Treasury Securities with quarterly maturities in the form of strips (“U.S. Treasury Strips”). 13 The Exchange proposes that the minimum number of receipts or YUPS required to be outstanding when trading commences is 150,000. YUPS may be approved for listing and trading on Common Stock that meets certain criteria identified below relating to, among other things, public float and trading volume, required in proposed Commentary .03 to Amex Rule 1202. 14 The Exchange expects Cantor Fitzgerald & Co. (“Cantor”), as initial depositor to the trust, to offer the YUPS and Bank of New York (“BNY”) will act as trustee. 11 A TIR is defined in Amex Rule 1200(b) as a security

(a)that is issued by a trust which holds specified securities deposited with the trust;

(b)that, when aggregated in some specified minimum number, may be surrendered to the trust by the beneficial owner to receive the securities; and

(17)TIRs under the trade name of HOLDRS, 16 representing a wide variety of industry sectors and the market as a whole. The original HOLDR was the Internet HOLDR. 15 *See* TIR Approval Order. 16 *See* HOLDRS No-Action Letter *infra* note 21 and Registration No. 333-78575 filed with the Commission on September 23, 1999 pursuant to Rule 424(b)(4) CIK No. 00007286(2). To accommodate the listing of additional TIRs, the Exchange in September 2000 revised the existing listing criteria and trading rules to permit the listing and trading of TIRs pursuant to Rule 19b-4(e) under the Act (“Generic Listing Standards”). 17 In order to efficiently list TIRs without submitting a separate rule filing with the Commission for each TIR, the Exchange consistent with Rule 19b-4(e) requires, among other things, evidence of sufficient size, liquidity and non-concentration of the underlying component securities of the TIR. 18 Because of the structure of YUPS, representing an interest in shares of the Common Stock and a series of U.S. Treasury strips, the Exchange believes that the current Generic Listing Standards cannot be used by the Exchange to list this product. However, based on the TIR Approval Order, the Exchange represents that YUPS may be listed for trading pursuant to Amex Rule 1201 and Amex Rule 1202, subject to Commission review and approval. As a result, the Exchange submits this proposed rule change for the purpose of adding Commentary .04 to Amex Rule 1202 to permit the listing and trading, including pursuant to unlisted trading privileges, of a series of YUPS pursuant to Rule 19b-4(e) under the Act when the product complies with proposed Commentaries .03, .05, .06, and .07 to Amex Rule 1202 and proposed Commentary .13 to Amex Rule 170 in the Single TIR Proposal. 17 Commission Rule 19b-4(e), adopted on December 8, 1998, permits the Exchange to list and trade new derivative securities products without submitting a proposed rule change, provided the Exchange has in place trading rules, procedures, a surveillance program and listing standards that pertain to the class of securities covering the new product. *See* Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998). 18 Commentary .01 of Amex Rule 1202 provides the eligibility criteria for component securities represented by a series of a TIR as follows:

(1)Each component security must be registered under Section 12 of the Act;

(2)each component security must have a minimum public float of at least $150 million;

(4)each component security must have an average daily trading volume of at least 100,000 shares during the preceding sixty-day trading period;

(5)each component security must have an average daily dollar value of shares traded during the proceeding sixty-day trading period of at least $1 million; and

(3)years from its date of formation. 20 Additionally, the initial listing standards set forth in Amex Rule 1202(a) for all TIRs provide that the Exchange must establish a minimum number of TIRs required to be outstanding at the time of the commencement of trading on the Exchange. As set forth above, the minimum number of YUPS required to be outstanding at the time of trading is 150,000 receipts. The continued listing guidelines for all TIRs are set forth in Amex Rule 1202(b) and currently state that the Exchange will consider the suspension of trading in or removal from listing of a trust upon which a series of TIRs is based under any of the following circumstances:

(1)If the trust has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of Trust Issued Receipts for 30 or more consecutive trading days;

(2)if the trust has fewer than 50,000 receipts issued and outstanding;

(3)if the market value of all receipts issued and outstanding is less than $1,000,000; or

(4)if such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable. Upon termination of a trust, the Exchange requires that any TIRs issued in connection with such trust be removed from Exchange listing. In addition, a trust may terminate in accordance with the provisions of the trust prospectus, which may provide for termination if the value of securities in the trust falls below a specified amount. 21 The trust is not a registered investment company under the Investment Company Act of 1940 (“1940 Act”). *See* SEC No-Action Letter dated September 3, 1999 to Merrill Lynch, Pierce, Fenner & Smith Incorporated, providing relief from registration as a management investment company under the 1940 Act for HOLDRS (the “HOLDRS No-Action Letter”). The depositor, Cantor, has requested similar no-action relief from the staff of the Commission's Division of Investment Management. As noted above, the Exchange proposes to establish specific criteria in proposed Commentary .03 to Amex Rule 1202, for determining whether Common Stock is eligible for YUPS listing and trading. The criteria are similar to, and based on, the existing criteria for TIRs under the Generic Listing Standards. Thus, the proposed eligibility criteria for the underlying equity component (“Common Stock”) represented by a series of YUPS are as follows: 1. The component Common Stock must be registered under Section 12 of the Act; 2. The component Common Stock must be listed on a national securities exchange or traded through the facilities of Nasdaq and reported national market system security; 3. The component Common Stock may be a security of the U.S. or foreign issuer that meets the requirements of Section 107B(f) 22 of the Company Guide; 22 Section 107B(f) of the Company Guide provides requirements to meet in connection with the listing and trading of equity linked notes based on foreign and U.S. underlying securities. In general, this provision limits the amount of outstanding common shares of an entity that may be linked to a derivative instrument. The Exchange has also set forth, in proposed Commentary .07, that if an issuer proposes to list a Single TIR that relates to more than the allowable percentages set forth in Section 107B(f) of the Company Guide, the Exchange will submit a proposed rule change with the Commission pursuant to Section 19(b)(2) and cannot list and trade such Single TIR until the Commission issues an approval order. *See* Single TIR Proposal. 4. The component Common Stock must have a minimum public float of at least $150 million; 5. The component Common Stock must have an average daily trading volume of at least 100,000 shares during the preceding sixty-day trading period; and 6. The component Common Stock must have an average daily dollar volume of shares traded during the preceding sixty-day period of at least $1 million. Additionally, a minimum of 150,000 receipts are required to be outstanding when trading commences. For continued listing, the component stock must be eligible for standardized equity option trading pursuant to Amex Rule 916. The eligibility criteria were selected to ensure that the Common Stock available for YUPS is well capitalized and actively traded. With respect to public float and trading volume, the Exchange states the criteria track the requirements for qualification as “actively traded securities” under Regulation M. 23 23 *See* Securities Exchange Act Release No. 38067 (December 20, 1996), 62 FR 520 (January 3, 1997) at 35-36. Rules 101(c) and 102(d) under Regulation M defines “actively-traded securities” as those securities that have an average daily trading volume of at least $1 million and are issued by an issuer whose common equity securities have a public float of at least $150 million. Proposed Commentary .04 to Amex Rule 1202 provides that up to 35% of the YUPS Trust may consist of Treasury Securities. With respect to the U.S. Treasury strip component of YUPS, the Exchange notes that the market for Treasury Securities is the largest and most liquid securities market in the world. 24 For the year 2003, total daily average transaction volume for primary dealers 25 in U.S. Treasury coupon securities was approximately $406.08 billion. During this same period, primary dealer average daily transaction volume in the 1-3 year range was approximately $146.58 billion; average daily transaction volume in the 3-6 year range was approximately $130.67 billion; average daily transaction volume in the 6-11 year range was approximately $103.65 billion; and average daily transaction volume in the more than 11 year range was approximately $25.08 billion. 26 In the first quarter of 2004, average daily transaction volumes for the same duration U.S. Treasury coupon securities were $166.89 billion, $135.4 billion, $106.4 billion and $24.12 billion, respectively. Most of this trading volume occurs in the most recently issued security in a particular maturity class. 27 24 *See* “The Treasury Securities Market: Overview and Recent Developments,” *The Federal Reserve Bulletin,* December 1999; which can be obtained from the Federal Reserve's Web site *www.federalreserve.gov/pubs/bulletin/1999/99index.htm.* 25 Primary dealers are selected by the Federal Reserve Bank of New York as counter parties for the New York Federal Reserve's open market operations (government securities transactions related to the Federal Reserve's implementation of monetary policy). Primary dealers are required to participate meaningfully in both open market operations and Treasury auctions and are required to provide policy relevant market information to the Federal Reserve Bank of New York. 26 Primary dealers in Treasury Securities submit statistics to The Federal Reserve Bank of New York regarding their transactions in Treasuries. These statistics may be obtained from the New York Federal Reserve's Web site *http://www.ny.frb.org.* 27 *See supra* note 24 at page 795. The secondary market for Treasury Securities is a highly organized over-the-counter (“OTC”) market. Many dealers, and particularly the primary dealers, make markets in Treasury Securities. Trading activity takes place between primary dealers, non-primary dealers, and customers of these dealers, including financial institutions, non-financial institutions and individuals. Increasingly, trading in Treasury Securities occurs through automated trading systems. 28 28 *See* “eCommerce in the Fixed-Income Markets: The 2001 Review of Electronic Transaction Systems,” December 2001. This survey of electronic trading systems in the bond market was prepared by the staff of The Bond Market Association and is available through the Association's Web site *http://www.bondmarkets.com.* The primary dealers are among the most active participants in the secondary market for Treasury Securities. The primary dealers and other large market participants frequently trade with each other, and most of these transactions occur through an interdealer broker. 29 The interdealer brokers provide primary dealers and other large participants in the Treasury market with electronic screens that display the bid and offer prices among dealers and allow trades to be consummated. 29 *E.g.,* BrokerTec Global, Cantor Fitzgerald, Garban-Intercapital, and Liberty Brokerage. Quote and trade information regarding Treasury Securities is widely available to market participants from a variety of sources. The electronic trade and quote systems of the dealers and interdealer brokers are one such source. Groups of dealers also furnish trade and quote information to vendors such as Bloomberg LLC, Reuters, Moneyline Telerate, and CQG. GovPX, 30 for example, is a consortium of leading government securities dealers that provides market data from leading government securities dealers to market data vendors. TradeWeb, another example, is a consortium of 18 primary dealers that, in addition to providing a trading platform, also provides market data direct to subscribers or to other market data vendors. 31 In addition, an interdealer broker of government securities (Cantor) for many years has provided Moneyline Telerate with market data. 30 *http://www.govpx.com.* 31 *http://www.tradeweb.com.* In order to provide investors who purchase or sell YUPS with information regarding the value of the underlying Common Stock and Treasury strips, the Exchange will disseminate every 15 seconds an indicative value of the underlying portfolio. 32 32 Because YUPS will hold multiple securities ( *e.g.* , an equity security and Treasury strips), the Exchange finds it useful to disseminate an estimated intraday valuation indicative of the underlying portfolio. Product Description The Exchange states that YUPS are designed to provide investors with a current market yield, while also providing the opportunity to share in the appreciation, if any, of a publicly-traded share of common stock. YUPS represent an undivided beneficial interest in the underlying securities held by the YUPS Trust. A holder of YUPS may exchange the YUPS to receive each of the underlying securities. The Exchange states that the expenses associated with trading YUPS are expected to be less than the expenses associated with trading each of the underlying securities separately in a traditional brokerage account. YUPS are also expected to provide reduced volatility compared to the trading of each Common Stock, largely due to the existence of downside protection received through the current yield of U.S. Treasury strips. YUPS are separate and distinct from the underlying securities comprising the portfolio of the YUPS Trust. Consistent with the TIR Approval Order, 33 each YUPS Trust will only issue and retire YUPS in a minimum issuance denominations, 34 which is expected to be eight

(8)round-lots of 100 YUPS shares. Each Trust will only issue YUPS upon the deposit of the whole shares represented by the minimum issuance denomination and the series U.S. Treasury strips represented by such minimum issuance denomination. In the event that a fractional share is represented by the minimum issuance denomination, the Trust may require a minimum of more than one minimum issuance denomination for an issuance so that the Trust will always receive whole share amounts for issuance of YUPS. Thus, YUPS will trade on the Exchange only in round lots of 100 YUPS. 33 *See* TIR Approval Order. 34 YUPS will evidenced by one or more global certificates that the trustee will deposit with DTC and register in the name of Cede & Co., as nominee for DTC. YUPS will be available only in book-entry form. Owners of YUPS may hold their YUPS through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC. The number of outstanding YUPS will increase and decrease as a result of in-kind deposits and withdrawals of the underlying securities. The YUPS Trust will stand ready to issue additional YUPS on a continuous basis when an investor deposits the required securities with the trustee. The initial public offering price for 100 YUPS will equal the sum of the closing market price on the Nasdaq National Market (for Nasdaq stocks) or the primary listed securities exchange (for listed stocks) on the pricing date for each underlying share of the Common Stock multiplied by the “share per receipt ratio amount” 35 to be determined on the pricing, and the closing prices of the U.S. Treasury strips in the futures market on the pricing date, plus an underwriting fee. After the initial public offering, each Trust may issue additional YUPS regarding a specific underlying Common Stock on a continuous basis. Investors may acquire YUPS in two ways:

(1)Through a purchase on the Exchange, or

(2)through an in-kind deposit with the trustee during normal business hours of the number of the underlying shares of Common Stock represented by the specified round-lots of 100 YUPS and the series of U.S. Treasury Strips represented by the specified round-lots of 100 YUPS. Investors that create YUPS by delivery to the Trust of the requisite underlying Common Stock and U.S. Treasury Strips will be required to pay an issuance fee that is expected to be approximately 1% of the value of the securities represented by the YUP receipt. 36 In addition, investors will also be responsible for paying any sales commissions that are charged by a broker in connection with any purchase of the underlying securities. 35 The “share per receipt ratio amount” is the number of shares of the underlying Common Stock (or multiplier) for each one

(1)YUP. The “share per receipt ratio” for each separate YUPS issue will depend on the price of the Common Stock and will vary from issue to issue. In general, the higher the market price of the Common Stock, the lower the “share per receipt ratio.” 36 Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 15, 2005. The initial weighting of YUPS will be approximately 70% allocated to Common Stock and 30% allocated to the U.S. Treasury Strips. The specific share amounts for each round-lot of 100 YUPS will be determined on the pricing date. The underlying securities of YUPS consist of shares of a Common Stock that is registered under Section 12 of the Act and meets the other listing criteria discussed above, and a series of zero-coupon U.S. Treasury Strips, maturing quarterly. In selecting the Common Stock, no investigation or review of the individual publicly-traded company, including the public filings, will be performed other than to the extent required to determine whether the company and its common stock satisfies the listing criteria for YUPS. After the pricing, the “share per receipt ratio amount” for an underlying Common Stock will not change, except for changes due to corporate events, such as stock splits or reverse stock splits. Under no circumstances will the common stock of a different publicly-traded company be substituted for the initial common stock established for the YUPS. The actual number of shares and weighting will be determined on the date of the initial capitalization of the Trust by the initial depositor and will appear in the final prospectus delivered in connection with sales of YUPS. 37 The notional amount and weighting of the underlying U.S. Treasury Strips will also be determined on the pricing date and, except as a result of the maturity of the U.S. Treasury Strips, will not change during the term of the Trust. The relative weightings of the deposited securities will change based on the current market price of the deposited securities, but the component securities held by each YUPS Trust and represented by a YUPS will not change except as a result of the quarterly maturity of the U.S. Treasury Strips. 37 As a result of the share per receipt ratio amount or multiplier, the initial issue price will be a multiple of the current price of the Common Stock. For example, the initial issue price of a YUP may be $49.99 (plus a 1% issuance fee) provided a share per receipt ratio of 1.7825 and a current price of $20.00 per share for a given stock that qualifies as a YUP candidate and $15.00 principal amount of Treasury Securities (with a current market value of $14.34). If YUPS are surrendered to the trustee in a minimum issuance amount (expected to be eight

(8)round lots of 100 YUPS), the investor will receive 1,426 shares of the Common Stock and $12,000 principal amount of Treasury Securities for each minimum issuance denomination. In the event a minimum issuance denomination represents fractional shares due to certain corporate events such as stock splits or reverse stock splits or other corporate distributions, the trustee will deliver cash in lieu of such fractional share. Investors may withdraw the underlying securities of YUPS upon request by delivering a minimum issuance denomination (expected to be eight

(8)round lots of 100 YUPS) or integral multiple thereof to the trustee during normal business hours. To the extent that any exchange of YUPS requires the delivery of a fractional share, the trustee will sell such share in the market and deliver cash in lieu of such share. Beneficial owners of YUPS will have the same rights and privileges as they would have if they beneficially owned the underlying securities outside of the Trust. 38 These include the right of investors to instruct the trustee to vote the securities, the right to receive dividends and other distributions on the underlying securities, if any, and the right to exchange YUPS to receive the underlying securities. 39 However, except with respect to the right to vote for dissolution of the Trust, holders of YUPS will not have voting rights with respect to the YUPS Trust. 40 The Trust will not be managed and will remain static over the term of the Trust. 38 The trustee will deliver proxy soliciting materials provided by the publicly-traded company underlying YUPS to permit holders of YUPS to give the trustee instructions as to how to vote on matters to be considered at any annual or special meeting of shareholders held by that company. 39 Dividends and distributions will generally be passed-through to the holders of the YUPS. However, distributions, if any, of additional shares of common stock will be retained by the Trust and added to the quantity of the common stock underlying the outstanding YUPS. Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 15, 2005. 40 Beneficial owners of YUPS, other than Cantor, will have the right to vote to dissolve and liquidate the Trust. The Trust will not publish or otherwise calculate the aggregate value of the underlying security represented by YUPS. However, as noted above, the Exchange will disseminate every 15 seconds over the Consolidated Tape Association's Network B an indicative value of the underlying portfolio of YUPS. YUPS may trade in the secondary market at prices that are lower than the aggregate value of the corresponding underlying security. If, in such case, a holder of a YUPS wishes to realize the net asset value of the underlying security, that owner will have to exchange the YUPS. The Exchange believes that YUPS will not trade at a material discount or premium to the underlying securities held by the Trust based on potential arbitrage opportunities. The arbitrage process, which provides the opportunity to profit from differences in prices of the same or similar securities, increases the efficiency of the markets and serves to prevent potentially manipulative efforts. If the price of YUPS deviates enough from the portfolio of the deposited securities to create a material discount or premium, an arbitrage opportunity is created allowing the arbitrageur to either buy the YUPS at a discount, immediately cancel them in exchange for the deposited securities and sell the underlying securities in the cash market at a profit, or sell the YUPS short at a premium and buy the securities represented by YUPS to deposit in exchange for YUPS to deliver against the short position. In both instances the arbitrageur locks in a profit and the markets move back into line. Prospectus Delivery In connection with the listing and trading of YUPS, all investors in YUPS who purchase in the initial offering will receive a prospectus. In addition, purchasers of YUPS directly from the Trust (by delivering the underlying securities to the Trust) will also receive a prospectus. Finally, Amex members purchasing YUPS from the Trust for resale to customers will deliver a prospectus to such customers. 41 41 Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 15, 2005. Fee Structure As set forth in the Registration Statement in connection with the YUPS Trust, investors purchasing YUPS by delivery to the Trust of the securities represented by the YUPS are required to pay an issuance fee of 1% of the value of the securities underlying the YUPS receipt. There are no cancellation or withdrawal fees. 42 42 Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 15, 2005 (as to fee structure generally). Brokerage commissions may be charged by a securities broker for the purchase of the underlying securities in connection with the creation of the YUPS. In addition, purchases of YUPS on the Exchange may also be subject to brokerage commissions. BNY as trustee also will charge an annual custody fee of .04% of the Trust's assets, to be paid quarterly by Cantor (and thus will not be paid out of the assets of the Trust). Termination Events The YUPS Trust will be terminated if any of the following circumstances occur:

(1)The individual publicly-traded company of the underlying YUPS no longer has a class of securities registered under Section 12 of the Act;

(2)the Commission finds that individual publicly-traded company underlying the YUPS or the Trust should be registered as an investment company under the 1940 Act, and the trustee has actual knowledge of the Commission finding;

(3)the securities of the individual publicly-traded company underlying the YUPS cease to be outstanding as a result of a merger, consolidation or other corporate combination;

(4)the individual publicly-traded company's common stock is no longer listed for trading on the Amex or New York Stock Exchange, Inc. (“NYSE”) or authorized for quotation on Nasdaq National Market System (“NMS”) for five

(5)business days from the date the securities are no longer authorized for listing or quotation;

(5)the YUPS are delisted from the Amex and are not listed for trading on another U.S. national securities exchange or authorized for quotation on Nasdaq NMS within five

(5)business days from the date the YUPS are delisted;

(6)the trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to Cantor, the initial depositor, of its intent to resign;

(7)50% of beneficial owners of outstanding YUPS vote to dissolve and liquidate the trust; and/or

(8)the withdrawal of such number of common stock from the Trust so that the aggregate value of the Trust's assets fall below a pre-determined amount. Upon termination of the Trust, the beneficial owners will surrender the YUPS and the trustee will distribute the underlying securities to the YUPS holders. Information Circular The proposed rule change would require the Exchange to evaluate the nature and complexity of YUPS, prior to the commencement of its trading, and, if appropriate, distribute and circulate to the membership guidance regarding member firm compliance responsibilities when handling transactions in such securities. In addition, prior to the commencement of trading in YUPS, the Exchange will issue a circular to members informing them of, among other things, Exchange policies regarding trading halts in such securities. First, the circular will advise that trading will be halted in the event the market volatility trading halt parameters set forth in Amex Rule 117 have been reached. Second, the circular will advise that, in addition to other factors that may be relevant, the Exchange may consider factors such as the extent to which trading is not occurring in a deposited share(s) and whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present; however, in any event, trading in the YUPS will be halted if trading in the underlying equity security is halted because of a regulatory trading halt as defined in Rule 6h-1 under the Act. 43 43 Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 14, 2005 (regarding content of information circular generally and definition of regulatory trading halt). In addition, the circular will also discuss the special characteristics and risks of trading YUPS. Specially, the circular, among other things, will discuss how the YUPS are issued and redeemed from the trust, that shares are not individually redeemable, member prospectus delivery requirements, and applicable Exchange rules, such as the limited exception to Amex Rule 170. The circular will also explain the various fees as described in the Registration Statement. The circular will also advise members of their suitability obligations with respect to a recommended transaction in the YUPS shares. 44 44 *See* Amex Rule 411. Trading Rules YUPS are equity securities subject to Amex Rules governing the trading of equity securities, including, among others, rules governing priority, parity and precedence of orders, specialist responsibilities, account opening and customer suitability (Amex Rule 411), with the prior approval of a floor official, of a stop or limit order by a quotation (Amex Rule 154, Commentary .04(c)). Initial equity margin requirements of 50% and the regular equity trading hours of 9:30 a.m. to 4 p.m. will apply to transactions in YUPS. However, trading rules pertaining to the availability of odd-lot trading in Amex equities will not apply to the trading of YUPS, since they can only be traded in round-lots. YUPS will be deemed “Eligible Securities,” as defined in Amex Rule 230, for purposes of the Intermarket Trading System Plan and therefore will be subject to the trade through provisions of Amex Rule 236 that require that Amex members avoid initiating trade-throughs for ITS securities. Specialist transactions of YUPS made in connection with the creation and redemption of YUPS will not be subject to the prohibitions of Amex Rule 190. 45 YUPS will trade in minimum fractional increments pursuant to Amex Rule 127, resulting in a minimum fractional change of $0.01. YUPS will be subject to the short sale rule, Rule 10a-1 under the Act and Regulation SHO under the Act. 46 In addition, Proposed Commentary .13 of Amex Rule 170 would grant a specialist in a Single TIR a limited exception from Commentaries .01, .02, and .07 of Amex Rule 170. 47 Such exception would allow a specialist in a Single TIR to buy on plus ticks and/or sell on minus ticks for the purpose of bringing the Single TIR into parity with its underlying security. The Exchange represents that its surveillance procedures applicable to the YUPS are adequate to deter manipulation, 48 and will be similar to those used for other TIRs and exchange-traded funds (“ETFs”) and will incorporate and rely upon existing Amex surveillance procedures governing options and equities. 45 *See* Commentary .05 to Amex Rule 190. Pursuant to Commentary .05, Amex Rule 190(a) will not restrict the specialist in YUPS from purchasing or canceling the YUP or its component securities in connection with the issuance of the YUP, from the Trust as appropriate to facilitate the maintenance of a fair and orderly market. 46 17 CFR 240.10a-1; 17 CFR 242.200(g). 47 *See* Single TIR Proposal. 48 Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Commission, on April 14, 2005. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act 49 in general and furthers the objectives of Section 6(b)(5) 50 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 49 15 U.S.C. 78f(b). 50 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange did not receive any written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, 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-Amex-2004-47 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File Number SR-Amex-2004-47. 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 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-Amex-2004-47 and should be submitted on or before May 13, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 51 51 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-1915 Filed 4-21-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51543; File No. SR-CBOE-2005-23] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Accelerated Approval to a Proposed Rule Change To Amend CBOE Rule 8.4 To Remove the Physical Trading Crowd Appointment Alternative for Remote Market-Makers and To Create an “A+” Tier Consisting of the Two Most Actively-Traded Products on the Exchange April 14, 2005. On March 15, 2005, 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 CBOE Rule 8.4(d) to remove the Physical Trading Crowd (“PTC”) appointment alternative for Remote Market-Makers (“RMMs”) and to create an “A+” Tier consisting of the two most actively-traded products on the Exchange. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. The proposed rule change was published for comment in the **Federal Register** on March 21, 2005. 3 The Commission received no comments on the proposal. 3 *See* Securities Exchange Act Release No. 51371 (March 15, 2005), 70 FR 13557. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 4 and, in particular, the requirements of section 6 of the Act 5 and the rules and regulations thereunder. The Commission specifically finds that the proposed rule change is consistent with section 6(b)(5) of the Act 6 in that it is designed to promote just and equitable principles of trade, to remove impediments and to perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 4 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(5). The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the proposal is published for comment in the **Federal Register** pursuant to section 19(b)(2) of the Act. 7 The Commission believes that accelerating approval of the proposal is necessary to accommodate the rollout of CBOE's RMM program. In particular, the Commission notes that the proposal would enable CBOE to commence its RMM program with two of the most actively-traded products included, options on Standard & Poor's Depositary Receipts (Spiders) and options on the Nasdaq-100 Index Tracking Stock (QQQQs), under a new “A+” Tier designation. Furthermore, the Commission notes that the proposal would eliminate the PTC appointment option for RMMs and would require them to have a Virtual Trading Crowd appointment, which should allow them greater flexibility to choose their own appointments. The Commission therefore believes that accelerated approval of the proposed rule change is appropriate and finds that it is consistent with the Act. 7 15 U.S.C. 78s(b)(2). *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 8 that the proposed rule change (SR-CBOE-2005-23) be approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-1883 Filed 4-21-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51542; File No. SR-CBOE-2005-22] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Accelerated Approval to a Proposed Rule Change To Adopt an Inactivity Fee To Be Charged Against Remote Market-Makers That Fail To Commence Quoting in Their Appointed Classes April 14, 2005. On March 15, 2005, 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 adopt an inactivity fee to be charged against Remote Market-Makers (“RMMs”) that fail to commence quoting in their appointed classes. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. The proposed rule change was published for comment in the **Federal Register** on March 21, 2005. 3 The Commission received no comments on the proposal. 3 *See* Securities Exchange Act Release No. 51370 (March 15, 2005), 70 FR 13559. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 4 and, in particular, the requirements of Section 6 of the Act 5 and the rules and regulations thereunder. The Commission specifically finds that the proposed rule change is consistent with section 6(b)(4) of the Act 6 in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. 4 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(4). The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the proposal is published for comment in the **Federal Register** pursuant to section 19(b)(2) of the Act. 7 The Commission believes that accelerating approval of the proposal is necessary to accommodate the rollout of CBOE's RMM program. In particular, the Commission notes that accelerated approval of the proposal would enable CBOE to commence its RMM program with the inactivity fee in place, which should help to ensure that RMMs are aware that they will be subject to fees if they fail to submit quotations in their appointed classes. The Commission further notes that the proposal should help to prevent an RMM that obtains an electronic appointment in a product from not initiating quoting in that product. In addition, the Commission notes that the proposed inactivity fee is similar to a fee imposed by the International Securities Exchange (“ISE”). 8 The Commission therefore believes that accelerated approval of the proposed rule change is appropriate and finds that it is consistent with the Act. 7 15 U.S.C. 78s(b)(2). 8 *See* Securities Exchange Act Release 46272 (July 26, 2002), 67 FR 50497 (August 2, 2002); *see also* ISE Regulatory Information Circulars 2002-04 and 2002-09. *It is therefore ordered* , pursuant to section 19(b)(2) of the Act, 9 that the proposed rule change (SR-CBOE-2005-22) be approved. 9 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E5-1884 Filed 4-21-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51568; File No. SR-CBOE-2004-16] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Denying Motion for Reconsideration of Order Setting Aside Earlier Order Issued by Delegated Authority and Granting Approval to a Proposed Rule Change and Amendment No. 1 Thereto Relating to an Interpretation of Paragraph

(b)of Article Fifth of Its Certificate of Incorporation and an Amendment to Rule 3.16(b) April 18, 2005. I On February 25, 2005, we issued an order (“Order”) setting aside a July 15, 2004 order 1 that approved by authority delegated to the Division of Market Regulation a proposed rule change (SR-CBOE-2004-16) submitted by the Chicago Board Options Exchange, Incorporated (“CBOE”), and approving the proposed rule change as amended. 2 Our Order was in response to a petition for review submitted by Marshall Spiegel (“Petitioner”) on August 23, 2004. 3 The CBOE's proposed rule change interprets certain terms used in Article Fifth(b) of CBOE's Certificate of Incorporation (“Article Fifth(b)”). Article Fifth(b) relates, in part, to the ability of a Board of Trade of the City of Chicago, Inc. (“CBOT”) member to become a member of the CBOE without purchasing a CBOE membership (“Exercise Right”). CBOE's stated purpose behind its proposed rule change is the interpretation of Article Fifth(b) in accordance with the original intent of the Article to clarify which individuals will be entitled to the Exercise Right upon distribution by the CBOT of a separately transferable interest (“Exercise Right Privilege”) representing the Exercise Right component of a CBOT membership. 1 Securities Exchange Act Release No. 50028 (July 15, 2004), 69 FR 43644 (July 21, 2004). 2 Securities Exchange Act Release No. 51252 (Feb. 25, 2005), 70 FR 10442 (Mar. 3, 2005) (hereinafter “Order”). 3 Letter from Marshall Spiegel, CBOE Equity Member, to Margaret H. McFarland, Deputy Secretary, Office of the Secretary, Commission, dated September 13, 2004. In issuing the Order, we found that the CBOE provided a sufficient basis for finding that, as a federal matter under the Securities Exchange Act of 1934 (“Exchange Act”), the CBOE complied with its Certificate of Incorporation, as required by Section 6(b)(1) of the Exchange Act, 4 in determining that its proposed rule change was an interpretation of, not an amendment to, Article Fifth(b). 5 Further, we found that the proposed rule change was consistent with the Exchange Act, including Section 6(b)(5) thereunder. 6 4 15 U.S.C. 78f(b)(1). 5 Order, *supra* note 2, at 10444. 6 *Id.* at 10447. II A motion to reconsider is governed by Rule 470 of the Commission's Rules of Practice. 7 Rule 470 permits us to reconsider our decisions in exceptional cases. 8 The remedy is intended to correct manifest errors of law or fact or to permit the presentation of newly discovered evidence. 9 We find that Petitioner's motion for reconsideration does not present the exceptional circumstances required to compel us to reconsider our earlier Order in that it does not present any newly discovered evidence 10 and does not support any findings of manifest errors of law or fact underlying our Order. 7 17 CFR 201.470. 8 *See In the Matter of the Application of Reuben D. Peters, et al.* , Securities Exchange Act Release No. 51237 (Feb. 22, 2005), at text accompanying n. 6 (Admin. Proc. File No. 3-11277) (addressing the application of Rule 470). 9 *See In the Matter of KPMG Peat Marwick LLP,* Securities Exchange Act Release No. 44050 (Mar. 8, 2001), 74 SEC Docket 1351, 1352-53 n.7 (Admin. Proc. File No. 3-9500) (specifying that efficiency and fairness concerns embodied in federal court practice of rejecting motions for reconsideration unless correction of manifest errors of law or fact or presentation of newly discovered evidence is sought “likewise inform our review of motions for reconsideration under Rule 470”). 10 Petitioner's brief does, however, appear to present new arguments in support of his position. We note that settled principles of federal court practice establish that a party may not seek rehearing of an appellate decision in order to advance an argument that it could have made previously but elected not to. *See, e.g., Anderson v. Beatrice Foods Co.,* 900 F.2d 388, 397 (1st Cir. 1990). In considering motions for reconsideration of federal district court rulings, courts have likewise cautioned that “[t]he purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence” and that a “motion for reconsideration should not be used as a vehicle to present authorities available at the time of the first decision or to reiterate arguments previously made. * * * *. *Z.K. Marine, Inc.* v. *M/V Archigetis,* 808 F. Supp. 1561, 1563 (S.D. Fla. 1992) (quoting *Harsco Corp.* v. *Zlotnicki,* 779 F.2d 906, 909 (3d Cir. 1985)). The efficiency and fairness concerns that underlie these settled principles of federal court practice likewise inform our review of motions for reconsideration under Rule 470. *See KPMG Peat Marwick LLP,* Order Denying Request for Reconsideration, Securities Exchange Act Release No. 44050 (Mar. 8, 2001), 74 SEC Docket 1351. A. Petitioner's Assertion That the CBOE Board's Proposed Rule Change Is an Amendment Because the Change Affects Equity Holder Rights Is a New Argument Petitioner's brief in support of his motion to reconsider contends that the CBOE's action of interpreting Article Fifth(b) alters the rights of CBOE equity holders. Petitioner states that “[p]reviously, exercise rights were inalienable from full CBOT membership,” and that “[h]ere, the CBOT unilaterally has sought to change the exercise rights into separate securities.” 11 Petitioner continues by noting that the way in which these changes by the CBOT are treated by the CBOE under Article Fifth(b) will affect the legal and economic rights of the CBOT exercise right. 12 Because the CBOE honors the changes being made by the CBOT, Petitioner claims it diminishes the rights and interests of CBOE treasury seat holders by recognizing a new class of persons who have economic influence over the CBOE. 13 There would be a different result, Petitioner argues, if CBOE determined that the Exercise Right under Article Fifth(b) would be extinguished if ever transferred apart from the sale or rental of a full CBOT membership. 14 Because the Petitioner believes that the interpretation by the CBOE “alters the rights of various and distinct classes of CBOE equity interest holders,” he contends that such interpretation is an amendment under Delaware Law. 15 11 Brief in Support of Motion of Marshall Spiegel for Reconsideration of the Commission's February 25, 2005 Order, dated March 7, 2005, at 7 (“Petitioner's Brief in Support of Motion to Reconsider”). 12 *Id.* at 8. 13 *Id.* 14 *Id.* 15 *Id.* This appears to us to be a new argument presented by Petitioner. Petitioner previously argued that the December 17, 2003 agreement between the CBOE and the CBOT (“2003 Agreement”) and the CBOE's proposed rule change amended Article Fifth(b) by redefining the term CBOT member “by permitting CBOT members to carve up membership rights and sell them separately to third parties without extinguishing their rights to CBOE membership under Article Fifth(b).” 16 Petitioner argued that “[t]his fundamental change and augmentation in the economic and legal rights of CBOT members and the structure of CBOT membership materially and profoundly affect the economics and legal rights of CBOE membership and governance.” 17 In response to this argument, we noted that neither the 2003 Agreement nor the proposed rule change alter CBOT membership rights or permit the CBOT to divide membership rights by issuing Exercise Right Privileges. 18 Petitioner also argued previously that the CBOT actions alter the economic and corporate relationships among current CBOE members and, thus, constitute an amendment to Article Fifth(b). 19 The Petitioner did not, however, make an argument—as he does now—that the interpretation by the CBOE Board diminishes the rights of CBOE equity holders and, therefore, is an amendment under Delaware law. Because Petitioner cannot raise an argument for the first time on a Motion for Reconsideration, the Commission is not addressing the merits of this new argument. 20 16 Legal Memorandum of Points and Authorities in Support of the Statement of Petitioner Marshall Spiegel in Opposition to Staff Action, Oct. 26, 2004, at 4 (“Legal Memorandum”). 17 *Id.* 18 Order, *supra* note 2, at 10444. 19 Legal Memorandum, *supra* note 16, at 5. 20 *See supra* note 10 (discussing the standard of review for a motion to reconsider). B. Petitioner's Assertion That the Commission Did Not Consider the CBOE Board's Conflict of Interest Is a New Argument Petitioner contends, in another new argument first raised in his motion to reconsider, that the Commission “does not even deign to address—and appears oblivious to—the material conflicts of interests of the Board of Directors of [CBOE] in attempting to ‘interpret’ the Certificate of Incorporation* * *.” 21 Petitioner elaborates on his position by arguing that “the CBOE Board, which owes fiduciary duties of honesty, loyalty and good faith to all equity holders, is conflicted with respect to the interpretation it has made* * *.” 22 Petitioner is not permitted to raise an argument for the first time on a Motion for Reconsideration and, for this reason, the Commission is not addressing the merits of this new argument. 23 21 Petitioner's Brief in Support of Motion to Reconsider, *supra* note 11, at 1. 22 *Id.* at 2. 23 *See supra* note 10 (discussing the standard of review for a motion to reconsider). C. Petitioner's Assertion That the Commission Erred in Accepting the CBOE Board's Authority To Determine the Question of What It Means To Be a CBOT Member Is Without Merit The Petitioner argues that the Commission's Order “manifestly errs in concluding that the CBOE Board has independent, unilateral, and final authority to determine the answer* * * ” to the question of what it means to be a “member of the [CBOT]” under Article Fifth(b). 24 Petitioner asserts that Delaware law does not permit the CBOE Board to make such an interpretation, and that the fiduciary obligations on the CBOE Board under Delaware and federal law preclude the Board from doing so. 25 24 Petitioner's Brief in Support of Motion to Reconsider, *supra* note 11, at 3. 25 *Id.* First, Petitioner mischaracterizes our conclusion. Nowhere in our Order did we conclude that the CBOE Board has independent, unilateral, and final authority to determine what it means to be a “member of the [CBOT]” under Article Fifth(b). The CBOE cannot interpret the term “member of the [CBOT]” under Article Fifth(b) in a manner the Commission does not find consistent with the Exchange Act. Instead, we stated that we found “persuasive CBOE's analysis of the difference between ‘interpretations’ and ‘amendments,’ and the letter of counsel that concludes that it is within the general authority of the CBOE's Board to interpret Article Fifth(b) and that the ‘Board's interpretation of Article Fifth(b) contemplated by the [2003 Agreement] does not constitute an amendment to the Certificate and need not satisfy the voting requirements of Article Fifth(b) that would apply if the Article were being amended.’” 26 The letter of CBOE's legal counsel also stated that in interpreting Article Fifth(b), the CBOE Board must make such determination in good faith, consistent with the terms of Article Fifth(b) and not for inequitable purposes. 26 Order, *supra* note 2, at 10444 (quoting Letter from Michael D. Allen, Richard, Layton & Finger, to Joanne Moffic-Silver, General Counsel and Corporate Secretary, CBOE (June 29, 2004), at 5). Further, we do not find persuasive Petitioner's assertion that fiduciary obligations on the CBOE Board under Delaware law and federal law preclude the Board from interpreting its Certificate of Incorporation. We have previously found that the CBOE submitted sufficient support for its position that its proposed rule change involved an interpretation of Article Fifth(b) of its Certificate of Incorporation. 27 Accordingly, we do not believe that fiduciary duties preclude the CBOE Board from interpreting its Certificate of Incorporation in an attempt to address potential interpretive ambiguities that the CBOE and CBOT have identified in advance of the CBOT's restructuring. Accordingly, Petitioner's contention regarding the authority of the CBOE Board is without merit. 27 Order, *supra* note 2, at 10444. D. Petitioner Erroneously Asserts a Manifest Error in the Commission's Application of Contract Interpretation The Petitioner asserts that the Commission's application of principles of contract interpretation to uphold the CBOE Board's interpretation is manifestly erroneous, arguing that the Order “errs in its conclusion incorporated from the CBOE's Statement in Support of Approval that principles of contract interpretation support the Commission's ruling.” 28 We did not, contrary to the Petitioner's assertion, apply principles of contract interpretation in our Order in the manner suggested by Petitioner, nor did we incorporate by reference any principles of contract interpretation included in the CBOE's Statement in Support of Approval. Rather, we found that the CBOE provided a “sufficient basis on which the Commission can find that, as a federal matter under the Exchange Act, the CBOE complied with its own Certificate of Incorporation in determining that the proposed rule change is an interpretation of, not an amendment to, Article Fifth(b).” 29 Further, we found persuasive CBOE's analysis of the difference between “interpretations” and “amendments” and the letter of CBOE's counsel concluding that it is within the general authority of the CBOE's Board to interpret Article Fifth(b)* * *.” 30 Finally, we did “not believe that Petitioner's argument refuted, to any degree, CBOE's analysis of why its proposed rule change is an interpretation of Article Fifth(b), not an amendment.” 31 Accordingly, we find Petitioner's assertion of error in the Commission's purported application of contract principles to be without merit. 28 Petitioner's Brief in Support of Motion to Reconsider, *supra* note 11, at 10. 29 Order, *supra* note 2, at 10444. 30 *Id.* 31 *Id.* E. Petitioner's Assertion That the Commission Improperly Relied on the Letter of CBOE's Outside Counsel Is Without Merit Petitioner further contends that the Commission's “reliance” on the opinion of CBOE's outside counsel is manifestly erroneous. 32 Petitioner claims that the opinion letter of CBOE's outside counsel failed to cite any relevant authority or provide any rationale to support its characterization of the CBOE's action as an “interpretation” of Article Fifth(b) and accordingly should be given less weight. 33 Petitioner decried the opinion letter's elevation of “form over substance,” its failure to “address the circumstances when an ‘interpretation’ must also be deemed in substance an amendment,” and its failure to discuss “the CBOE Board's conflict of interest in making and enforcing the interpretation at issue here.” 34 32 Petitioner's Brief in Support of Motion to Reconsider, *supra* note 11, at 12. *See also* Statement of Chicago Board of Options Exchange in Support of Approval of Rule Under Delegated Authority, October 26, 2004. 33 Petitioner's Brief in Support of Motion to Reconsider, *supra* note 11, at 12-13. 34 *Id.* at 12. Petitioner's assertion that the opinion letter of CBOE's outside counsel failed to cite any relevant authority or provide any rationale is incorrect. Further, we did not solely rely on the opinion of CBOE's outside counsel. We found the opinion letter, along with the CBOE's Statement in Support of Approval, to be “persuasive,” and we found that those materials provided a “sufficient basis” to support a finding that, “as a federal matter under the Exchange Act, the CBOE complied with its own Certificate of Incorporation in determining that the proposed rule change is an interpretation of, not an amendment to, Article Fifth(b).” 35 Further, and most importantly, we specifically noted that we did “not believe that Petitioner's argument refutes, to any degree, CBOE's analysis of why its proposed rule change is an interpretation of Article Fifth(b), not an amendment.” 36 Accordingly, we find Petitioner's allegation of error based on the letter of CBOE's outside counsel to be without merit. 35 Order, *supra* note 2, at 10444. 36 *Id.* F. Petitioner's Allegation That the Commission Made a Finding Suggesting That Not Approving CBOE's Interpretation Would Paralyze the Exchange Is Factually Baseless Petitioner concludes his brief by arguing that “[t]he Commission's Order finding (incorporated from page 6 of the CBOE's Statement in Support of Approval) that failing to approve the CBOE Board's ‘interpretation’ would ‘paralyze’ the Exchange is without basis in fact.” 37 As stated above, while we cited to the CBOE's Statement in Support of Approval, we did not incorporate by reference the substance of that document into our Order. Nor did we make any finding in our Order that failing to approve the CBOE's rule change would paralyze the CBOE. Accordingly, Petitioner's argument is unsupported and will not be considered as grounds for reconsideration. 37 Petitioner's Brief in Support of Motion to Reconsider, *supra* note 11, at 13. III In the alternative, Petitioner suggests that “the CBOT's recent formal actions to demutualize have the capacity to render the proposed rule change moot” since the proposed rule change, the Petitioner argues, is only relevant if the CBOT is structured as a member organization. 38 Accordingly, the Petitioner suggests that the Commission should consider holding final determination of the validity of the proposed rule change in abeyance until the CBOT members' vote on whether to demutualize is complete. 39 We disagree. Self-regulatory organizations are not required to delay making changes to their rules in order to account for future contingencies that may or may not impact such rule in the future. Rather, to the extent that changed circumstances warrant further revisions to the CBOE's rules, the CBOE would need to submit a subsequent rule change pursuant to Section 19(b)(1) of the Act 40 and Rule 19b-4 thereunder. 41 Accordingly, we see no reason to hold final determination of this motion to reconsider in abeyance as suggested by Petitioner. 38 *Id.* at 3. 39 *Id.* 40 15 U.S.C. 78s(b)(1). 41 17 CFR 240.19b-4. Accordingly, we find that Petitioner's motion does not present the exceptional circumstances required for us to reconsider our earlier Order. *It is therefore ordered,* that the motion for reconsideration filed by Marshall Spiegel be, and it hereby is, *denied.* By the Commission. Jill M. Peterson, Assistant Secretary. [FR Doc. E5-1912 Filed 4-21-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-51522; File No. SR—NASD-2005-050] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the Nasdaq Opening Process for Nasdaq-Listed Stocks April 11, 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 April 11, 2005, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I are II below, which Items have been prepared by Nasdaq. Nasdaq has designated the proposed rule change as “non-controversial” under Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq is filing a proposed rule change to begin the pre-market trading session on a voluntary basis at 8 a.m. rather than 9:25 a.m. The text of the proposed rule change is set forth below. Proposed new language is in *italics;* proposed deletions are in [brackets]. 5 5 The proposed rule change is marked to show changes from the rule tet appearing in the NASD Manual available at *http://www.nasd.com.* 4701. Definitions (a)—(rr) No Change.

(ss)The term “Total Day” or “X Order” shall mean,

(a)For orders in *ITS Securities* so designated, that if after entry into the Nasdaq Market Center, the order is not fully executed, the order (or unexecuted portion thereof) shall remain available for potential display between 7:30 a.m. and 6:30 p.m. and for potential execution between market open *(9:30 a.m.)* and 6:30 p.m., after which it shall be returned to the entering party.

(b)For orders in Nasdaq-listed securities so designated, that if after entry into the Nasdaq Market Center, the order is not fully executed, the order (or unexecuted portion thereof) shall remain available for potential display *between 7:30 a.m. and 4 p.m.* and *for* execution between [9:25] *8* a.m. and 4 p.m., after which it shall be returned to the entering party. [X Orders entered prior to 9:25 a.m. will be rejected back to the entering party.]

(tt)No Change.

(uu)The term “Total Immediate or Cancel” or “IOX Order” shall mean,

(a)For limit orders *in ITS Securities* so designated, that if after entry into the Nasdaq Market Center a marketable limit order (or unexecuted portion thereof) becomes non-marketable, the order (or unexecuted portion thereof) shall be canceled and returned to the entering participant. Such orders are available for potential execution between 9:30 a.m. and 6:30 p.m.

(b)For limit orders in Nasdaq-listed securities so designated, that if after entry into the Nasdaq Market Center a marketable limit order (or unexecuted portion thereof) becomes non-marketable, the order (or unexecuted portion thereof) shall be canceled and returned to the entering participant. Such orders may be entered and are available for potential execution between [9:25] *8* a.m. and 4 p.m. 4704. Opening Process for Nasdaq-Listed Securities

(a)No Change.

(b)Trading Prior To Normal Market Hours. The system shall [open] *process* all eligible Quotes/Orders in Nasdaq-listed securities at [9:25] *8* a.m. in the following manner to prevent the creation of locked/crossed markets.

(1)At [9:25] *8* a.m., the system shall open *in time priority* all *eligible* Quotes *as stated in paragraph

(5)below* *and all eligible Orders in accordance with Rule 4701(ss) and (uu)* [in time priority]. Quotes/ *Orders* whose limit price [does] *would* not lock or cross the book shall be added to the book in strict time priority. Quotes/ *Orders* whose limit price would lock or cross the book shall be placed in an “In Queue” state *except as provided in paragraph (4).*

(2)Next, the system shall begin processing the In Queue Quotes/ *Orders* in strict time priority against the best bid

(ask)if the In Queue *Quote/O* [o]rder is a sell

(buy)order. If an In Queue Quote/ *Order* is not executable when it is next in time for execution, the system shall automatically add that Quote/ *Order* to the book.

(3)Once the process set forth in subparagraphs (1)-(2) is complete, the system shall begin processing Quotes and X and IOX Orders in accordance with their entry parameters. *(4) Between 8 a.m. and 9:25 a.m., the system shall open Quotes in accordance with the entry parameters set by each Nasdaq Quoting Market Participant provided that Quotes that would lock/cross the market will be rejected or executed in accordance with the Nasdaq Quoting Market Participant's instructions. At 9:25 a.m., the system shall open all remaining unopened Quotes in accordance with each firm's instructions.* *(5) Nasdaq Quoting Market Participants may instruct Nasdaq to open their Quotes as follows:* *(A) At the last price and size entered by the participant during the previous trading day, either including or excluding reserve size;* *(B) At a price and size entered by the participant between 7:30 a.m. and 9:24:59 a.m.; or* *(C) At the quotation limits for Nasdaq systems, currently $.01

(bid)and $2,000 (ask).* ([4] *6* ) All trades executed prior to 9:30 shall be automatically appended with the “.T” modifier. ([5] *7* ) Notwithstanding subparagraphs

(1)through (5), if a Nasdaq Quoting Market Participant has entered a Locking/Crossing Quote/Order into the system that would become subject to the automated processing described above, the system shall, before sending the order to any other Quoting Market Participant or Order Entry Firm, first attempt to match off the order against the locking/crossing Nasdaq Quoting Market Participant's own Quote/Order if that participant's Quote/Order is at the highest bid or lowest offer, as appropriate. A Nasdaq Quoting Market Participant may avoid this automatic matching through the use of anti-internalization qualifier as set forth in Rule 4710(b)(1)(B)(ii)(a). Order Entry Firms that enter locking/crossing Quotes/Orders shall have those Quotes/Orders processed as set forth in subparagraphs

(1)through ([4] *3* ), unless they voluntarily select a “Y” AIQ Value as provided for in Rule 4710(b)(1)(B)(ii)(a). (c)-(d) No Change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq 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. Nasdaq 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 Nasdaq proposes to make available on a voluntary basis a pre-market trading session of the execution service of the Nasdaq Market Center at 8 a.m. rather than at 9:25 a.m. As described below, Nasdaq would open the trading session at 8 a.m. using the unlocking/uncrossing process that it currently uses at 9:25 a.m. All extended hours orders and all quotations so designated by a Quoting Market Participant would be eligible for execution during the pre-market trading session and quotations and orders would participate precisely as they do today. Trades that occur before 9:30 a.m. would continue to receive a trade report modifier denoting execution during extended trading hours, as they do today. As it does today, Nasdaq would begin the voluntary pre-market trading session at 7:30 a.m. by making the system available for displaying quotations and orders but not for execution. As they do today, firms would continue to have three options for determining the price at which their carryover quotes would be opened at 9:25:

(1)The last quotation price entered during the previous day;

(2)the last quotation price the firm enters after 7:30 a.m. and before 9:25 a.m.; or

(3)the quote limits for Nasdaq, currently $.01

(bid)and $2,000 (ask). Beginning at 7:30 a.m. until 8 a.m., Nasdaq would display all quotations and eligible orders remaining in the system from the previous night. Market participants would have the ability to update their quotes beginning at 7:30 a.m. and to instruct Nasdaq regarding the display of that updated quote. For example, a market participant would be able, at any time after 7:30 a.m., to enter a quote update and to instruct Nasdaq to open that quote immediately. If the update were to be received before 8 a.m., the quotation would be opened and executable when the execution functionality became available at 8 a.m. If the quote open update were to be received between 8 a.m. and 9:25 a.m. the quote would be opened upon the receipt of the quote update. At 9:25 a.m. all quotations would be made available for automatic executions. Also at 7:30 a.m., market participants would be able to begin voluntarily submitting extended and regular hours orders. To facilitate orderly trading beginning at 8 a.m., Nasdaq would make Total Day Orders (“X Orders”), as described in Rule 4701(ss), and Total Immediate or Cancel (“IOX Orders”), as described in Rule 4701(uu), available for execution at 8 a.m. rather than at 9:25 a.m. Extended hours orders would receive a time stamp for purposes of determining time priority and would be displayed but not executed. At 8 a.m., Nasdaq would open the execution functionality of the Nasdaq Market Center. In preparation for that opening, Nasdaq would construct an unlocked inside in each security by applying the unlocking/uncrossing process described in Rule 4704(b), which it currently applies at 9:25 a.m. In that process, Nasdaq would clear the existing quotation display and “wake up” the quotations of market participants that have instructed Nasdaq to open their quotations between 7:30 a.m. and 8 a.m. Quotations that have not been opened between 7:30 a.m. and 8 a.m. would not be displayed and would not participate in the 8 a.m. opening process. Participating quotations would be processed in order of time priority and placed on the Nasdaq book, provided, however, that quotations that would lock or cross the market would be rejected. Immediately upon completion of the 8 a.m. unlocking/uncrossing process, all quotations that have been opened voluntarily and all eligible orders that have been submitted voluntarily would be subject to automatic execution. At 9:25 a.m., Nasdaq would “wake up” all remaining un-opened quotations and introduce them to the Nasdaq book as it does today. A quotation might remain unopened at 9:25 a.m. in two circumstances: If a market participant has entered a quotation update but has not instructed Nasdaq to open the quotation or if the participant has entered no update at all. In the first case, at 9:25 a.m., Nasdaq would open the quotation at the price and size specified by the participant. In the second case, Nasdaq would open the quotation based on the participant's instructions. Quotations that would lock or cross the inside would automatically be rejected. It is important to note that the parameters governing the entry of Market-on-Open and Opening Imbalance Only Orders, as well as all parameters governing the Nasdaq Opening Cross would remain the same as today, including dissemination of Opening Cross information and the processing of the Opening Cross itself. Nasdaq believes that these changes are consistent with the Act and would improve the fairness and orderliness of Nasdaq's pre-open trading environment. Having quotes opened voluntarily and executable upon entry would improve the accuracy of Nasdaq's pre-market trading data. Today, because quotations are not executable, the market can appear locked or crossed during the pre-market session. In addition, Nasdaq believes that making quotations and orders available for execution would improve both the transparency and price discovery provided by those quotations and orders. Nasdaq further notes that several other market centers are open for pre-market trading at this time and therefore Nasdaq's proposal would enhance competition for quotation and execution services. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 15A of the Act, 6 in general, and with Section 15A(b)(6) of the Act, 7 in particular, in that Section 15A(b)(6) requires that the NASD's rules be designed to protect investors and the public interest. Nasdaq believes that its current proposal is consistent with the NASD's obligations under these provisions of the Act because it would extend fair and orderly trading of Nasdaq stocks on Nasdaq during an increasingly active period of the trading day, prevent the occurrence of locked and crossed markets before the start of normal market hours, and preserve price discovery and transparency that is vital to an effective opening of trading. 6 15 U.S.C. 78 *o* -3. 7 15 U.S.C. 78 *o* -3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change would result in 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 Nasdaq neither solicited nor received written comments with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:

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

(ii)Impose any significant burden on competition; and

(iii)Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b-4(f)(6) thereunder. 9 Nasdaq has requested that the Commission waive the 30-day operative delay for “non-controversial” proposals, based upon a representation that the proposal is of the utmost importance to the fair and orderly operation of The Nasdaq Stock Market during the pre-opening trading period. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow Nasdaq immediately to implement the proposed rule change which should improve transparency in the pre-opening trading period. For this reason, the Commission designates the proposal to be effective and operative upon filing with the Commission. 10 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(6). The Commission notes that Nasdaq provided written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change at least five business days prior to the date of filing of the proposed rule change. 10 For purposes only of waiving the 30-day operative delay of the proposed rule change, the Commission considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2005-050 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-NASD-2005-050. 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 NASD. 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-NASD-2005-050 and should be submitted on or before May 13, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-1913 Filed 4-21-05; 8:45 am] BILLING CODE 8010-01-P DEPARTMENT OF STATE [Public Notice 5048] Fine Arts Committee Notice of Meeting The Fine Arts Committee of the Department of State will meet on May 21, 2005, at 10:30 a.m. in the Henry Clay Room of the Harry S. Truman Building, 2201 C Street NW., Washington, DC. The meeting will last until approximately 12 noon and is open to the public. The agenda for the committee meeting will include a summary of the work of the Fine Arts Office since its last meeting on September 17, 2004 and the announcement of gifts and loans of furnishings as well as financial contributions from January 1, 2004 through December 31, 2004. Public access to the Department of State is strictly controlled and space is limited. Members of the public wishing to take part in the meeting should telephone the Fine Arts Office at

(202)647-1990 or send an e-mail to *Craighillmf@state.gov* by May 17 to make arrangements to enter the building. The public may take part in the discussion as long as time permits and at the discretion of the chairman. Dated: April 5, 2005. Gail F. Serfaty, Secretary, Fine Arts Committee, Department of State. [FR Doc. 05-8124 Filed 4-21-05; 8:45 am]

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