Fed. Reg. Notices — SECURITIES AND EXCHANGE COMMISSION

BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52169; File No. SR-BSE-2005-21] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Proposal To Transfer a Portion of Ownership Interest in Boston Options Exchange Facility July 29, 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 July 27, 2005, the Boston Stock Exchange, Inc.

(“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in items I, II and III below, which items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to transfer a portion of its ownership interest in its Boston Options Exchange facility (“BOX”) such that its aggregate percentage interest will fall below 20%.

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On January 13, 2004, the Commission approved four BSE proposals that together established BOX as a facility of the Exchange. 3 This proposal relates to section 8.4(f) of the operating agreement of BOX LLC (the “LLC Agreement”), which requires that any Transfer 4 that would result in a reduction of BSE's aggregate Percentage Interest 5 in BOX LLC to below 20% be subject to the rule filing process pursuant to section 19(b)(1) of the Act 6 and Rule 19b-4 thereunder. 7 3 *See* Securities Exchange Act Release Nos. 49066 (January 13, 2004), 69 FR 2773 (January 20, 2004) (establishing a fee schedule for the proposed BOX facility); 49065 (January 13, 2004), 69 FR 2768 (January 20, 2004) (creating Boston Options Exchange Regulation LLC to which the BSE would delegate its self regulatory functions with respect to the BOX facility); 49068 (January 13, 2004), 69 FR 2775 (January 20, 2004) (approving trading rules for the BOX facility); and 49067 (January 13, 2004), 69 FR 2761 (January 20, 2004) (approving certain regulatory provisions of the operating agreement of BOX LLC). 4 Under the terms of the LLC Agreement, a “Transfer” occurs when any LLC member would “dispose of, sell, alienate, assign, exchange, participate, subparticipate, encumber, or otherwise transfer in any manner . . . all or any part portion of its Units” (ownership interests). 5 Under the terms of the LLC Agreement, “Percentage Interest” is defined as the ratio of the number of Units held by an LLC member to the total of all of the issued Units, expressed as a percentage. 6 15 U.S.C. 78s(b)(1). 7 17 CFR 240.19b-4.

The BSE is proposing to Transfer a portion of its Units, which would result in the BSE's Percentage Interest falling below the 20% threshold. Any such Transfer would be subject to the various limitations set forth elsewhere in the LLC Agreement, throughout Article 8 and elsewhere, regarding suitability and other regulatory and business requirements. 8 Although the BSE does not presently have a transferee designated, any such transferee would need to sign and be bound by the provisions of the LLC Agreement.

The purpose of the Transfer would be to assist the BSE to fund its equities-related business interests and initiatives related thereto. 8 For example, the BSE would be prohibited, under Section 8.1(d), from Transferring any of its Units to anyone other than a Member, affiliate of a Member, or IB (according the terms set forth in Section 8.6(d)), until after the earlier of the second anniversary of the Launch Date of BOX or the date on which IB's percentage interest has been reduced to no more than 8.00%.

Nothing about BSE's transfer of Units will affect additional provisions of the LLC Agreement that make special accommodations for BSE as the SRO of the BOX facility. For example, Section 4.4(a) of the LLC Agreement provides that BOX may not take any major action unless such action is approved by a majority of the BOX LLC Board, including the affirmative vote of all of the directors designated by the BSE. Section 4.1(b) of the LLC Agreement provides that, with its present ownership interest, BSE is entitled to maintain two seats on the Board.

Since the BSE does not at this time anticipate that any foreseen Transfers would result in BSE's Percentage Interest of BOX LLC going below 8.00% (the threshold established in this Section to maintain at least two directors on the Board), then this entitlement will remain. Nevertheless, Section 4.1(b) also gives the BSE a perpetual right to designate at least one director on the BOX LLC Board regardless of whether it maintains any ownership interest. In addition, although BOX LLC itself will not carry out any regulatory functions, all of its activities must be consistent with the Act.

For example, provisions set forth in Sections 4.2(a) and 5.3 of the LLC Agreement state that each unitholder and director of BOX cooperate with the Commission and the BSE in carrying out their regulatory responsibilities. These provisions reinforce the notion that BOX, as a facility of an exchange, is not solely a commercial enterprise; it is an integral part of an SRO registered pursuant to the Act, and is subject to the obligations imposed by the Act. These obligations endure so long as BOX is a facility of the Exchange, regardless of the size of BSE's ownership interest in BOX LLC.

The Commission has stated, in a similar case involving the establishment of ArcaEx as a facility of the Pacific Exchange (“PCX”), that a national securities exchange need not have a significant ownership interest in the operator of one of its facilities. 9 In fact, the Act does not require that an SRO have any ownership interest in the operator of one of its facilities. Nevertheless, the BSE intends to maintain an ongoing ownership interest in BOX LLC, the operator of its BOX facility.

However, regardless of this intention, the BSE is the SRO for the BOX facility, and the BSE will, independent of its ownership interest, ensure that BOX LLC will conduct the facility's business in a manner consistent with the regulatory and oversight responsibilities of the BSE and with the Act. 9 *See* Securities Exchange Act Release No. 44983 (October 25, 2001), 66 FR 55225, 55229-30 (November 1, 2001) (approving SR-PCX-00-25). ArcaEx is operated by Archipelago Exchange LLC (“Arca LLC”).

At the time of its approval, PCX's ownership interest in Arca LLC consisted solely of a 10% interest in Archipelago Holdings LLC, the parent company of Arca LLC. *See* 66 FR at 55225. Moreover, nothing in the Exchange's proposal will alter or modify in any way the terms or the enforcement of the LLC Agreement. In addition, the actual transfer of any BSE units will not alter or modify the terms or the enforcement of the LLC Agreement. The BSE also represents that, should there be any changes in the terms of the LLC Agreement between the date of the publication of this proposal and the transfer of BSE's Units which would result in the BSE's Percentage Interest falling below the 20% threshold, then the Exchange will resubmit this filing in order for the Commission to consider the transfer of Units in light of any changes made to the LLC Agreement. 2.

Statutory Basis The Exchange believes that this filing is consistent with section 6(b) 10 of the Act, in general, and furthers the objectives of section 6(b)(1), 11 in particular, in that it ensures that the Exchange is so organized and has the capacity to carry out the purposes of the Act and to comply and to enforce compliance by the Exchange's members with the Act, the rules and regulations of the Act, and the rules of the Exchange; and section 6(b)(5), 12 in particular, in that it is designed to facilitate transactions in securities; 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities; to remove impediments to and perfect the mechanism of a free and open market and a national market system; and in general, to protect investors and the public interest. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(1) 12 15 U.S.C. 78f(b)(5).

B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

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

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

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-BSE-2005-21 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-BSE-2005-21. 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 BSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BSE-2005-21 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4194 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52173; File No. SR-CBOE-2005-51] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Amendments to the Exchange's Trade-Through and Locked Markets Rules July 29, 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 30, 2005, the Chicago Board Options Exchange, Incorporated (“CBOE”) 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 substantially prepared by the CBOE. On July 26, 2005, the CBOE filed 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 *See* Form 19b-4 dated July 26, 2005 (“Amendment No. 1”). In Amendment No. 1, CBOE revised the rule text to use terms consistent with CBOE's current rules and made certain clarifying changes to the purpose section. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The CBOE proposes to amend its rules to conform to recent proposed Intermarket Linkage Plan (“Plan”) changes relating to “trade and ship” and “book and ship” concepts. The text of the proposed rule change is available on the CBOE's Web site ( *http://www.cboe.com* ), at CBOE's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The CBOE has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The CBOE is proposing to amend its rules to conform to recent proposed changes governing the operation of the Intermarket Linkage, as set forth in Plan Amendment No. 15. Specifically, the CBOE is proposing that:

(i)An exchange may trade an order at a price that is one-tick inferior to the NBBO if a linkage order 4 is transmitted to the NBBO market(s) to satisfy all interest at the NBBO price (“trade and ship” concept); and

(ii)an exchange may book an order that would lock another exchange if a linkage order is sent to such other exchange to satisfy all interest at the lock price (“book and ship” concept). Under the trade and ship proposal, any execution received from the NBBO market must (pursuant to agency obligations) be reassigned to the customer order that is underlying the linkage order that was transmitted to “take out” the NBBO market. Examples of the trade and ship and book and ship concepts are below: 4 A linkage order is a certain type of immediate or cancel order that is routed through the Linkage facility and is defined in Section 2(16) of the Plan. *Trade and Ship Example.* The CBOE is disseminating an offer of $2.00 for 100 contracts. Another participating exchange (“Exchange B”) is disseminating the national best offer of $1.95 for 10 contracts. No other market is at $1.95. CBOE receives a 100-contract customer buy order to pay $2.00. Under this proposal, CBOE could execute 90 contracts (or 100 contracts) of the customer order at $2.00 provided CBOE simultaneously transmits a 10-contract Principal Acting as Agent Order (“P/A Order”) to Exchange B to pay $1.95. Assuming an execution is obtained from Exchange B, the customer would receive the 10-contract fill at $1.95 and 90 contracts at $2.00 (if the customer order was originally filled in its entirety at $2.00, an adjustment would be required to provide the customer with the $1.95 price for 10 contracts reflecting the P/A Order execution). As proposed, this would not be deemed a Trade-Through. *Book and Ship Example.* CBOE is disseminating a $1.85-$2.00 market. Exchange B is disseminating a $1.80-$1.95 market. The $1.95 offer is for 10 contracts. No other market is at $1.95. CBOE receives a customer order buy 100 contracts at $1.95. Under this proposal, CBOE could book 90 contracts of the customer buy order at $1.95 provided CBOE simultaneously transmitted a 10-contract P/A Order to Exchange B to pay $1.95. Assuming an execution is obtained from Exchange B, the customer would receive the 10-contract fill and the rest of the customer's order will be displayed as a $1.95 bid on CBOE. The national best offer would likely be $2.00. As proposed, this would not be deemed a “locked” market for purposes of the Plan. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with section 6(b) of the Act 5 in general and furthers the objectives of section 6(b)(5) of the Act 6 in particular, in that the proposed rule change should promote just and equitable principles of trade, serve to remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition This proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 CBOE 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-CBOE-2005-51 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-CBOE-2005-51. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2005-51 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4228 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52168; File No. SR-ISE-2005-32] Self-Regulatory Organizations; International Securities Exchange Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change and Amendment No. 2 Thereto To Extend the Linkage Fee Pilot Program July 29, 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 July 7, 2005, the International Securities Exchange, Inc. (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in items I and II below, which items have been prepared by the Exchange. The Exchange filed Amendment No. 1 to the proposed rule change on July 26, 2005, and withdrew Amendment No. 1 on July 28, 2005. The Exchange filed Amendment No. 2 to proposed rule change on July 28, 2005. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons and is approving the proposal, as amended, on an accelerated basis for a pilot period through July 31, 2006. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 2 makes technical corrections to the proposed rule text and clarifies the purpose of the proposed rule change. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend until July 31, 2006, the current pilot program regarding transaction fees charged for trades executed through the intermarket option linkage (“Linkage”). Currently pending before the Commission is a filing to make such fees permanent. 4 The text of the proposed fee schedule is available on the Exchange's Web site ( *http://www.iseoptions.com* ), at the Exchange's principal office, and at the Commission's Public Reference Room. 4 *See* SR-ISE-2003-30 (“Permanent Fee Filing”). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to extend for one year the pilot program establishing Exchange fees for Principal Orders and Principal Acting as Agent (“P/A”) Orders sent through Linkage and executed on the Exchange. The fees currently are effective for a pilot program scheduled to expire on July 31, 2005, 5 and the proposed rule change would extend the fees through July 31, 2006. The three fees the Exchange charges for these orders are: The Market Maker and Firm Proprietary execution fees for trading on the Exchange, which range from $.12 to $.21 depending on average daily trading volume on the Exchange; a surcharge of between $.05 and $.15 for trading certain licensed products; and a $.03 comparison fee (collectively “linkage fees”). 6 These are the same fees that all Exchange Members pay for non-customer transactions executed on the Exchange. 7 The Exchange does not charge for the execution of Satisfaction Orders sent through Linkage and is not proposing to charge for such orders. 5 *See* Securities Exchange Act Release No. 50010 (July 13, 2004); 69 FR 43649 (July 21, 2004) (Order extending the Linkage fee pilot program to July 31, 2005). 6 Pursuant to other pilot programs, certain linkage fees may not apply during the Linkage pilot program. 7 The Exchange charges these fees only to its Members, generally firms who clear Principal and P/A Orders for market makers on the other linked exchanges. In the Permanent Fee Filing, the Exchange discusses in detail the reasoning why it believes it is appropriate to charge fees for Principal and P/A Orders sent through Linkage and executed on the Exchange. Basically, market makers on competing exchanges always can match a better price on the Exchange; they never are obligated to send orders to the Exchange through Linkage. However, if such market makers do seek the Exchange's liquidity, whether through conventional orders or through the use of Principal Orders or P/A Orders, the Exchange believes it is appropriate to charge its Members the same fees levied on other non-customer orders. The Exchange appreciates that there has been limited experience with Linkage and that the Commission is continuing to study Linkage, in general, and the effect of fees on Linkage trading. Thus, this filing would extend the status quo with Linkage fees for one year while the Commission considers the Permanent Fee Filing. 2. Statutory Basis The Exchange believes that the basis under the Act for this proposed rule change is the requirement under section 6(b)(4) 8 that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. As discussed in more detail above, the Exchange believes that this proposed rule change will equitably allocate fees by having all non-customer users of Exchange transaction services pay the same fees. If the Exchange were not to charge Linkage fees, the Exchange's fee would not be equitable in that Exchange Members would be subsidizing the trading of their competitors, all of whom access the same trading services. 8 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Moreover, the Exchange believes that failing to adopt the proposed rule change would impose a burden on competition by requiring the Exchange Members to subsidize the trading of their competitors. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. 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-ISE-2005-32 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-ISE-2005-32. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2005-32 and should be submitted on or before August 26, 2005. IV. Commission's Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, 9 and, in particular, the requirements of section 6(b) of the Act 10 and the rules and regulations thereunder. The Commission finds that the proposed rule change is consistent with section 6(b)(4) of the Act, 11 which requires that the rules of the Exchange provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Commission believes that the extension of the Linkage fee pilot until July 31, 2006, will give the Exchange and the Commission further opportunity to evaluate whether such fees are appropriate. 9 In approving this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15.U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4). The Commission finds good cause pursuant to section 19(b)(2) of the Act, 12 for approving the proposed rule change prior to the 30th day after publication of notice thereof in the **Federal Register** . The Commission believes that granting accelerated approval of the proposed rule change will preserve the Exchange's existing pilot program for Linkage fees without interruption as the Exchange and the Commission further consider the appropriateness of Linkage fees. 12 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 13 that the proposed rule change (SR-ISE-2005-32), as amended, is hereby approved on an accelerated basis for a pilot period to expire on July 31, 2006. 13 *Id.* For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4195 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52174; File No. SR-ISE-2005-33] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Amendments to the Exchange's Trade-Through and Locked Markets Rules July 29, 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 July 8, 2005, the International Securities Exchange, Inc. (“ISE”) 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 ISE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend its rules governing the operation of the intermarket option linkage (“Linkage”). Specifically, the ISE is proposing to amend the trade-through and locked markets rules to allow a member to “trade and ship” or “book and ship” an order. The text of the proposed rule change is available on the ISE's Web site ( *http://www.iseoptions.com* ), at the ISE's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the ISE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The ISE has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The ISE proposes to amend its rules governing Linkage trading with respect to trade-throughs and locked markets. Specifically, the amendment will provide that an ISE member:

(i)May trade an order at a price that is one minimum quoting increment inferior to the national best bid or offer (“NBBO”) if the member contemporaneously transmits to the market(s) disseminating the NBBO Linkage Orders 3 to satisfy all interest at the NBBO price (“trade and ship”); and

(ii)may enter an order on the ISE that would lock another exchange if the member contemporaneously sends a Linkage Order to such other exchange to satisfy all interest at the lock price (“book and ship”). 4 Under the trade and ship proposal, pursuant to agency obligations, any execution the member receives from the NBBO market must be reassigned to any customer order underlying the Linkage Order that was transmitted to trade against the market disseminating the NBBO. Below are examples illustrating the applications of these concepts: 3 The ISE defines “Linkage Order” in ISE Rule 1900(10). 4 At the request of the ISE, the Commission staff has changed the wording in item

(ii)to be consistent with the rule text. Telephone conversation between Michael Simon, General Counsel and Secretary, ISE, Kim Allen, Attorney, Division of Market Regulation (“Division”), and Kate Robbins, Attorney, Division, on July 20, 2005. • Trade and Ship Example. The ISE is disseminating an offer of $2.00 for 100 contracts. Exchange B is disseminating the national best offer of $1.95 for 10 contracts. No other market is at $1.95. An ISE market maker receives a 100-contract customer buy order to pay $2.00. Under this proposal, the ISE market maker could execute 90 contracts (or 100 contracts) of the customer order at $2.00 provided the ISE market maker contemporaneously transmits a 10-contract Principal Acting as Agent (“P/A”) Order 5 to Exchange B to pay $1.95. Assuming an execution is obtained from Exchange B, the customer would receive the 10-contract fill at $1.95 and 90 contracts at $2.00 (if the customer order was originally filled in its entirety at $2.00, an adjustment would be required to provide the customer with the $1.95 price for 10 contracts reflecting the P/A Order execution). As proposed, this would not be deemed a Trade-Through. 5 The ISE defines “Principal Acting as Agent (“P/A”) Order” in ISE Rule 1900(10)(i). • Book and Ship Example. The ISE is disseminating a $1.85-$2.00 market. Exchange B is disseminating a $1.80-$1.95 market. The $1.95 offer is for 10 contracts. No other market is at $1.95. An ISE market maker receives a customer order to buy 100 contracts at $1.95. Under this proposal, the ISE market maker could book 90 contracts of the customer buy order at $1.95 provided the ISE market maker contemporaneously transmits a 10-contract P/A Order to Exchange B to pay $1.95. Assuming an execution is obtained from Exchange B, the customer would receive the 10-contract fill and the rest of the customer's order will be displayed as a $1.95 bid on the ISE. The national best offer would likely be $2.00. As proposed, this would not be deemed a “locked” market for purposes of the Linkage Plan. 2. Statutory Basis The ISE believes that the basis under the Act for this proposed rule change is the requirement under section 6(b)(5) 6 that an exchange have rules that are 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. In particular, the proposed rule change will help implement the Linkage Plan by facilitating the ability of market makers to execute their customer orders. 6 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition This proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The ISE has not solicited, and does not intend to solicit, comments on this proposed rule change. The ISE has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 ISE consents, the Commission will:

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

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-ISE-2005-33 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-ISE-2005-33. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2005-33 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4226 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52177; File No. SR-ISE-2005-31] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Cancellation Fee Changes July 29, 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 29, 2005, the International Securities Exchange, Inc. (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change concerning its cancellation fee as described in items I, II, and II below, which items have been prepared by the ISE. The ISE has filed the proposed rule change as one establishing or changing a due, fee, or other charge imposed by the ISE under section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 5 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2) 5 The Commission received eleven comment letters on the proposal as of the date of this notice. The ISE subsequently filed a proposed rule change under Section 19(b)(3)(A) of the Act (File No. SR-ISE-2005-36) to reinstate the Exchange's cancellation fee as in effect prior to the filing of the instant proposed rule change. In addition, the ISE filed a proposed rule change pursuant to Section 19(b)(2) under the Act (File No. SR-ISE-2005-37) that would base its cancellation fee on canceled contracts and that responds to the comment letters submitted on the instant proposed rule change. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to amend the ISE's cancellation fee. The text of the proposed rule change is available on the Exchange's Internet Web site ( *http://www.iseoptions.com/legal/proposed_rule_changes.asp* ), at the principal office of the ISE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the ISE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The ISE has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The ISE proposes to amend its Schedule of Fees regarding its cancellation fee. Since the inception of the cancellation fee, the Exchange has charged Electronic Access Members (“EAMs”) $1 per order canceled in excess of the number of orders executed. 6 Recognizing that order cancellations often happen in large numbers, the purpose of the fee was to ease congestion in the ISE Order Routing System (“IORS”) and to fairly allocate costs among members according to system use. The Exchange states that experience shows that two limitations are preventing the fee from fully achieving its intended effect. First, the ISE applies the fee to the aggregate number of orders a clearing EAM cancels on behalf of itself and its customers, which tends to mask the activity of the EAM's particular customers who are responsible for the cancellations. Second, because the Exchange applies the fee on a per order basis, firms have adjusted trading activity solely to avoid this fee by executing small orders to offset the cancellation of larger orders. The ISE states that, if anything, this increases message traffic as firms enter more small orders to mask their order cancellations. 6 *See* Securities Exchange Act Release No. 46189 (July 11, 2002), 67 FR 47587 (July 19, 2002) (SR-ISE-2002-16). To address these concerns, the ISE first proposes to charge a clearing EAM based on the cancellation activity of each of its customers (including itself when it self-clears). The Exchange has enhanced its systems so that it now can identify the specific broker-dealer customers of a clearing EAM who enters and cancels orders. This will allow the Exchange to identify and charge for cancellation activity beyond aggregate numbers. The ISE similarly will be able to provide clearing EAMs with the information necessary for them to pass through resulting cancellation charges to their customers. 7 7 The ISE notes that this feature is similar to how the Pacific Exchange now imposes its cancellation fee. *See* Securities Exchange Act Release No. 49802 (June 3, 2004), 69 FR 32391 (June 9, 2004) (SR-PCX-2004-31). The ISE further proposes to apply the fee to contracts canceled, not orders canceled. Specifically, the Exchange would charge $.10 for a canceled contract, compared to the current $1.00 fee for each canceled order. Similarly, the Exchange proposes to charge the fee only if the member or customer canceled at least 5,000 contracts in a month, compared to the current rule's allowance of 500 canceled orders. The Exchange believes that this will help address the problem of firms executing multiple small orders to avoid the per-order fee. The Exchange also believes that this will result in an effective fee increase since its current average order size is approximately 17 contracts, resulting in an average fee of $1.70 per canceled order. The ISE believes this increase is justified due to a continued increase in cancellation activity and its effect on IORS congestion. To ensure that the Exchange covers only activity that is truly excessive and inappropriately uses bandwidth and system capacity, it proposes to charge the fee only if canceled contracts are in excess of five times the total number of contracts executed. If this five-to-one ratio is exceeded, as is the case today with orders, the Exchange will impose the fee only on the excess cancellations over executions. The following example shows how the ISE proposes to apply this fee: Assume that Firm A, a customer of Clearing EAM, cancels orders representing an aggregate of 13,000 contracts in a month. Further assume that Firm A executed orders representing 2,500 contracts. Because the 13,000 contracts canceled is both

(1)greater than the base level of 5,000 contracts and

(2)more than five times in excess of the 2,500 contracts executed (which would be 12,500 contracts), the ISE would impose the fee on an aggregate of 10,500 contracts (13,000 contracts canceled minus the 2,500 contracts executed). The fee on Clearing EAM would be $1,050, which would have the information necessary to pass the charge to its customer, Firm A. 2. Statutory Basis The ISE states that the basis for the proposed rule change is the requirement under section 6(b)(4) of the Act, 8 that an exchange have an equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. In particular, these fees would permit the Exchange to recover capacity costs more equitably among its members. 8 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The ISE states that the proposed rule change does not impose 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 The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a due, fee, or other charged imposed by the Exchange, it has become effective pursuant to section 19(b)(3) of the Act 9 and Rule 19b-4(f)(2) 10 thereunder. At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such proposed 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. 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to rule-comments@sec.gov. Please include SR-ISE-2005-31 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to SR-ISE-2005-31. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of 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 SR-ISE-2005-31 and should be submitted on or before August 26, 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. E5-4247 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52182; File No. SR-NYSE-2005-16] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order Approving Proposed Rule Change to Rescind the “Nine-Bond Rule” August 1, 2005 On February 11, 2005, the New York Stock Exchange, Inc. (“NYSE”) 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 rescind NYSE Rule 396, commonly known as the “Nine-Bond Rule.” The proposed rule change was published for comment in the **Federal Register** on June 29, 2005. 3 The Commission received no comments on the proposal. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 51899 (June 22, 2005), 70 FR 37461. NYSE Rule 396 prohibits a member, member organization, or affiliated person or firm from effecting any transaction in any NYSE-listed bond in the over-the-counter market, either as principal or agent, without first satisfying all public bids and offers on the NYSE at prices equal to, or better than, the price at which such portion of the order is executed over-the-counter. The rule contains a number of exceptions, including one for any order submitted for ten bonds or more. The Commission finds that the NYSE's proposal to rescind Rule 396 is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 4 In particular, the Commission believes that the proposal is consistent with section 6(b)(5) of the Act, 5 which requires that the rules of the exchange be designed to prevent fraudulent and manipulative acts, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market, and in general, to protect investors and the public interest. Eliminating NYSE Rule 396 should facilitate the efficient execution of bond transactions on the NYSE without compromising smaller customer orders. The Commission notes that the approval of the proposed rule change in no way diminishes or otherwise affects the best execution obligations of NYSE members, member organizations, or affiliated persons that are otherwise imposed by federal securities law or agency law. 4 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(5). *It is therefore ordered,* pursuant to section 19(b)(2) of the Act, 6 that the proposed rule change (SR-NYSE-2005-16) be, and it hereby is, approved. 6 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4227 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52181; File No. SR-NYSE-2005-04] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change, Amending Interpretation of NYSE Rule 311 (“Formation and Approval of Member Organizations”) To Codify Certain Qualification Requirements for and Criteria for Dual- or Multi-Designation of Principal Executive Officers August 1, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on January 6, 2005, the New York Stock Exchange, Inc. (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in items I, II, and III below, which items have been prepared by the Exchange. On July 25, 2005, the NYSE amended the proposed rule change (“Amendment No.1”). 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 C.F.R. 240.19b-4. 3 In Amendment No. 1, the Exchange deleted the provision codifying Chief Operations Officer exemptions for certain introducing firms, proposed an amendment codifying limitations on the employment of principal executive officers, and made technical corrections to the purpose section and the rule text. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes amendments to the Interpretation of NYSE Rule 311 (“Formation and Approval of Member Organizations”) to codify:

(i)Qualification requirements for Chief Operations Officers (“COOs”) and Chief Financial Officers (“CFOs”);

(ii)criteria for the dual-designation of introducing firm COOs and CFOs;

(iii)criteria for the other dual-designation and multi-designation of principal executive officer functions;

(iv)criteria for co-designation of such functions; and

(v)limitations on the employment of principal executive officers. The text of the proposed rule change is available on the NYSE Web site ( *http://www.nyse.com* ), at the NYSE's Office of the Secretary and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below of the most significant aspects of such statements. A.Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1.Purpose Background NYSE Rule 311(b)(5) requires the designation of “principal executive officers” exercising senior principal executive responsibility over various prescribed areas of each member organization's business. 4 The Interpretation of NYSE Rule 311(b)(5) 5 further specifies that persons so designated, such as CFOs or COOs must be either members or allied members, must satisfy an examination requirement that is acceptable to the Exchange and must also have work experience and background commensurate with their responsibilities. The Exchange is proposing amendments to the Interpretation of NYSE Rule 311 in order to codify and clarify the following: 4 The rule lists certain areas of responsibility that are applicable to all member organizations, such as operations, compliance with the rules and regulations of regulatory bodies, finance and credit, and those areas which may or may not be present in a member organization, such as sales, underwriting, and research. 5 See Interpretation Handbook at NYSE Rule 311(b)(5)/01. • The qualification requirements for CFOs and COOs; • That member organizations with limited operational activities may dually designate a single person to act as both CFO and COO, where circumstances permit; • That the Exchange's approval is required for dual-designations other than CFO/COO and for all principal executive officer multi-designations; • That the Exchange's approval is required for the co-designation of functions requiring a principal executive officer; and • That the prior written approval of the Exchange, pursuant to NYSE Rule 346 (e), is required for arrangements involving the dual-employment of principal executive officers. Proposed Amendments to the Interpretation of NYSE Rule 311(b)(5) CFO/COO Qualification—Clearing Firms The Financial and Operations Principal Qualification Examination (Series 27) addresses Exchange and Federal regulatory requirements relating to a broad range of broker-dealer functions, including: • Maintenance of Books and Records; 6 • Net Capital Requirements; 7 • Customer Protection Rule; 8 • Financial Reporting; 9 • Processing of Funds and Securities; and • Federal Reserve Board Regulations. 10 6 17 CFR 240.17a-3; 17 CFR 240.17a-4. 7 17 CFR 240.15c3-1. 8 17 CFR 240.15c3-3. 9 17 CFR 240.17a-5; 17 CFR 240.17a-11. 10 15 U.S.C. 78g; 15 U.S.C. 78h. The material covered by the Series 27 Examination, in large part, reflects the functions and responsibilities associated with a clearing firm. Accordingly, since rescinding the Allied Member Examination (Series 41) in January 1986, 11 the Exchange has required that the CFO and COO at a clearing firm be Series 27-qualified. The proposed amendments to the Interpretation of NYSE Rule 311(b)(5) ( *see* proposed new Section/02) would codify this requirement. 11 *See* NYSE Information Memo Number 86-3 dated January 29, 1986. CFO/COO Qualification—Introducing Firm The scope of financial and operational responsibilities is generally more limited in an introducing firm than in a clearing firm. This is because introducing firms enter into contractual arrangements with clearing firms, pursuant to NYSE Rule 382, in which responsibility for many “back office” ( *e.g.* , operational and financial) broker-dealer functions are allocated to the clearing firm. Typically, the clearing firm would accept responsibility for:

(i)Extending credit to customers (pursuant to margin account agreements);

(ii)delivery of confirms and statements to customers;

(iii)receiving and delivering funds and securities to customers;

(iv)maintaining books and records;

(v)safeguarding customer funds and securities; and

(vi)clearing and settling transactions. Therefore, CFOs and COOs at introducing firms need not demonstrate as broad a range of expertise as that required of persons acting on behalf of clearing firms. The Introducing Broker/Dealer Financial and Operations Principal Qualification Examination (Series 28) is specifically designed to address the regulatory responsibilities associated with supervision over those more limited functions that typically remain the responsibility of the introducing firm. The proposed amendments to the Interpretation of NYSE Rule 311(b)(5) ( *see* proposed new Section/02 ) would codify that a person can qualify to function as the CFO or COO of an introducing firm by passing either the Series 27 Examination or the Series 28 Examination. CFO/COO Dual-Designations The current Interpretation of NYSE Rule 311 is not explicit as to whether the duties of CFOs and COOs must be exercised by different persons or whether a single person may be dually designated. The proposed amendments are intended to clarify the Exchange's position on the matter. Given that the level of operational and financial responsibility at many introducing firms may be such that a single qualified person could (and, in fact, does) adequately function as both the designated CFO and COO, it is proposed that allowance for such dual-designations be codified ( *see* proposed new Section/03). An introducing firm's dually designated CFO/COO could be either Series 27 or 28 qualified. The determination of whether one person could effectively function as both CFO and COO would be made by the member organization, based upon the nature and extent of their operational and financial activities. The proposed amendments require that the member organization use due diligence to assess the adequacy of the arrangement in light of the prescribed supervisory requirements of NYSE Rule 342 (“Offices—Approval, Supervision and Control”). The proposed amendments would also require that the Exchange be promptly notified of all such dual-designations. Other Dual- or Multi-Designations Given that the Series 27 is the qualifying examination for both CFOs and COOs, the pairing of CFO/COO functions is the most common dual-designation. The Exchange believes that the dual-designation of other principal executive officer functions, as well as the multi-designation of such functions, may also be appropriate under certain circumstances. However, given the diversity of responsibilities that may be involved with such arrangements, the Exchange also believes that a greater measure of regulatory control should be maintained over them. Accordingly, amendments to the Interpretation of NYSE Rule 311(b)(5) are proposed ( *see* proposed new Section/04) to codify that any assignment of principal executive officer dual-designation status other than a CFO/COO arrangement, or any multi-designation of principal executive officer titles, would require the prior written approval of the Exchange. Co-Designation of Principal Executive Officers The practice of designating co-CEOs at member organizations has been permitted in the past, subject to Exchange approval. The Exchange proposes amendments to codify the approval process, as well as to address the matter of whether a member organization may co-designate other principal executive officers. While the Exchange believes that this practice could lead to confusion as to which designee is ultimately responsible and accountable for assigned functions, there may be instances where such arrangements are supported by valid business reasons, such as when each co-designee has special expertise in critical areas within the purview of the principal executive officer job description. Accordingly, the proposed amendments would permit such co-designations, pursuant to a written request and subject to the prior written approval of the Exchange ( *see* proposed new Section /05). Written requests to the Exchange must set forth the reason for the co-designation and explain how the arrangement is structured. Further, since such co-designations raise issues regarding which person has ultimate authority and accountability, the request must make clear that each co-designee has joint and several responsibility for discharging the duties of that principal executive officer designation and that no understanding or agreement purporting to apportion or limit such responsibility will be recognized by the Exchange. Limitations on the Employment of Principal Executive Officers Proposed amendments to the Interpretation reaffirm that, pursuant to NYSE Rule 346(e), a principal executive officer may, with the prior written approval of the Exchange, be a part-time employee ( *see* proposed new Section /06). Approval will depend upon the degree of control, if applicable, between the member organization and such other business; the nature of the principal executive officer's duties and responsibilities at the member organization; the approximate time required to perform such duties and responsibilities effectively, and; the nature of the outside employment. This reference to Rule 346(e) is intended to clarify that such requests will be considered on a case-by-case basis, and are not subject to restrictions regarding Financial and Operational Principals' part-time employment at more than two members or member organizations outlined in NYSE Information Memo No. 91-25, dated July 8, 1991. This aspect of the proposed rule change will be discussed in the Information Memo released in conjunction with the approval of the proposed rule change. Miscellaneous It is proposed that current Section /03 be deleted. This Section, which addresses the use of “vice-presidential titles” and includes an unnecessary reference to “Rule 345(b)” and a dated reference to “Question 11 of the U-4 application” is outmoded and serves no current purpose. Also, the reference to Rule 304(b)/04 has been corrected to Rule 304(b) and moved from current Section /02 to proposed Section /01. 2. Statutory Basis The Exchange believes that the statutory basis for this proposed rule change is section 6(c)(3)(B) of the Act. 12 Under that section, it is the Exchange's responsibility to prescribe standards of training, experience and competence for persons associated with Exchange members and member organizations. In addition, under section 6(c)(3)(B) of the Act, the Exchange may bar a natural person from becoming a member or person associated with a member, if such natural person does not meet such standards of training, experience and competence as are prescribed by the rules of the Exchange. The Exchange believes that the proposed amendments are consistent with the Act in that they codify qualification and examination requirements for certain prescribed individuals. 12 15 U.S.C. 78f(c)(3)(B). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

(ii)as to which the Exchange consents, the Commission will:

(A)By order approve such proposed rule change or

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2005-04 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-NYSE-2005-04. 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 will also be available for inspection and copying at the principal office of the NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2005-04 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to the delegated authority. 13 13 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4230 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52179; File No. SR-NYSE-2004-47] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend Rule 352 Concerning Guarantees and Sharing in Accounts July 29, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”) 1 and Rule 19b-4 2 thereunder, notice is hereby given that on August 14, 2004 and on July 6, 2005 (Amendment No. 1), the New York Stock Exchange, Inc. (“NYSE” or the “Exchange”) filed with the Securities and Exchange Commission (“SEC” or the “Commission”) the proposed rule change. The proposed rule change as described in items I, II, and III below, which items have been prepared by the Exchange, incorporates amendments submitted to the Commission as Amendment No. 1. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 352 (the “Rule”) to expand the Rule to include specific limitations on loan arrangements between personnel associated with a member organization in any registered capacity on the one hand, and customers on the other. In addition, the amendments integrate the Rule's Interpretation into the proposed Rule text, and otherwise clarify both the Rule's scope and purpose. The text of the proposed rule change is available on the NYSE's Web site ( *http://www.NYSE.com* ), at the NYSE's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

(1)Purpose *Background.* Rule 352 generally prohibits members, member organizations, and specified associated persons of such from entering into arrangements that guarantee the payment of a debit balance in any customer account; guarantee a customer against loss; or establish a profit and/or loss-sharing agreement with a customer. The amendments proposed herein expand the Rule to include specific limitations on loan arrangements between personnel associated with a member organization in any registered capacity on the one hand, and customers on the other. In addition, the amendments integrate the Rule's Interpretation into the proposed Rule text, and otherwise clarify both the Rule's scope and purpose. *Loan Arrangements between Registered Personnel and Customers.* The Exchange does not currently have a rule that specifically addresses the issue of loan arrangements between member organization personnel and customers; however, the Exchange believes that such arrangements, given their inherent potential for conflict of interest and abuse, are generally not a good business practice. Bearing this concern in mind, it is recognized that there are certain situations when such loans may be appropriate. Accordingly, proposed paragraphs

(e)and

(f)to Rule 352 would limit loan arrangements, between persons associated with a member organization in any registered capacity and customers, to certain prescribed situations. As outlined in detail below, proposed Rule 352(e) requires written supervisory procedures that would limit loan arrangements between registered member organization personnel and customers of the member organization to those arising either in the context of a prescribed personal or business relationship outside of the broker-customer relationship, or to those involving other registered personnel of the member organization. Proposed Rule 352(f) further requires detailed written supervisory procedures that would require that certain loan arrangements between registered member organization personnel and customers of the member organization be disclosed to the member organization for prior approval. *Limitations on Loan Arrangements.* Proposed Rule 352(e) would permit a person associated with a member organization in any registered capacity to borrow money from or lend money to a customer of such person only if:

(A)The member organization has written supervisory procedures permitting the borrowing and lending of money between such registered persons and their customers; and

(B)the lending or borrowing arrangement meets one of the following conditions:

(1)The customer is a member of such registered person's immediate family; or

(2)the customer is a financial institution regularly engaged in the business of providing credit, financing, or loans, or other entity or person that regularly arranges or extends credit in the ordinary course of business; or

(3)the customer and the registered person are both registered persons of the same member organization; or

(4)the lending arrangement is based on a personal relationship with the customer, such that the loan would not have been solicited, offered, or given had the customer and the registered person not maintained a relationship outside of the broker/customer relationship; or

(5)the lending arrangement is based on a business relationship outside of the broker-customer relationship. *Loan Procedures.* Proposed Rule 352(f)(1) would require member organizations to pre-approve, in writing, the lending or borrowing arrangements described in proposed paragraphs (e)(3) (between registered persons of the same member organization); (e)(4) (involving a personal relationship outside the context of the broker-customer relationship); and (e)(5) (involving a business relationship outside the context of the broker-customer relationship). With respect to the lending or borrowing arrangements described in proposed Rule 352(e)(1) between a person associated with a member organization in any registered capacity and a customer that is a member of such registered person's immediate family, proposed paragraph (f)(2) would permit a member organization's written procedures to indicate that registered persons are not required to notify the member organization or receive member organization approval either prior to or subsequent to entering into a lending or borrowing arrangement with an immediate family member. For purposes of this proposed rule, the term “immediate family” is defined in proposed paragraph 352(g) to include parents, grandparents, mother-in-law or father-in-law, husband or wife, brother or sister, brother-in-law or sister-in-law, son-in law or daughter-in-law, children, grandchildren, cousin, aunt or uncle, or niece or nephew, and would also include any other person whom the registered person supports, directly or indirectly, to a material extent. With respect to the lending or borrowing arrangements described in proposed Rule 352(e)(2) between a person associated with a member organization in any registered capacity and a customer that is a financial institution regularly engaged in the business of providing credit, financing, or loans, or other entity or person that regularly arranges or extends credit in the ordinary course of business, proposed paragraph (f)(3) would permit a member organization's written procedures to indicate that registered persons are not required to notify the member organization or receive approval either prior to or subsequent to entering into a lending or borrowing arrangements with a customer that is a prescribed financial institution, provided that the loan has been made on commercial terms that the customer generally makes available to members of the general public similarly situated as to need, purpose, and creditworthiness. For purposes of proposed paragraph (e)(2), a member organization may rely on the registered person's written representation that the terms of the loan meet the standards required by proposed paragraph (f)(3). *Integration of the Rule's Interpretation.* The NYSE Interpretation Handbook contains an exception to the general prohibition, under current Rule 352(c), against sharing or agreeing to share in any profits or losses in any customer's account or from any transaction transacted therein. 3 The Interpretation states, in part, that: “* * * where a participatory compensation arrangement is entered into by a member organization that itself is registered with the SEC as an investment adviser, and such arrangement complies with section 205(1) and the rules thereunder, the arrangement will not be deemed violative of Rule 352(c) if the arrangement arises in the context of such member organization's advisory relationship with the customer. Member organizations may not have such participatory compensation arrangements if they are only acting as a broker for the customer.” 3 *See* text of the proposed rule change which is available on the NYSE's Web site ( *http://www.NYSE.com* ), at the NYSE's principal office, and at the Commission's Public Reference Room. Since this exemption for member organizations acting in the capacity of a registered investment adviser is not referred to nor reasonably implied by the Rule, it is proposed that it be deleted in its entirety from the Interpretation Handbook, and integrated into the proposed Rule text. 4 4 *Id.* In addition, the Interpretation text reference to section 205(1) of the Investment Advisers Act of 1940 is inaccurate. It is proposed that the reference be corrected to read “Section 205* * *unless exempt pursuant to section 203(b) of the Advisers Act.” 5 The proposed change simply clarifies the scope and original intent of the reference, and does not alter the substance of the Interpretation. 5 *Id.* *Miscellaneous Rule Text Clarifications.* The Exchange has taken this opportunity to rearrange and clarify certain sections of the Rule. For example, the text of Rule 352(b) arguably suggests an application of the Rule to a category broader than that of “customers” ( *e.g.* , encompassing broker- dealers). Specifically, it states that “no member, allied member, registered representative or officer shall guarantee or in any way represent that either he or his employer will guarantee any customer against loss in *any* account or on *any* transaction” (italics added). It is proposed that this text be amended to specify “customer” accounts and “customer” transactions in order to remove any suggestion that proposed Rule 352 is to be construed more expansively than other NYSE sales practice rules. These proposed amendments are consistent with both the original intent of the Rule and the Exchange's ongoing interpretation of it. It is proposed that the text of Rule 352(c) be amended, as reflected in proposed Rule 352(b), to clarify that its general restriction against receiving or agreeing to receive a share in the profits or losses of any customer account extends to officers of a member organization who are acting in the capacity of a registered representative. Inclusion of the term “officer” also makes proposed paragraph

(b)consistent with proposed paragraph (a). Current Rule 352 paragraphs

(a)and

(b)have been combined into proposed paragraph (a). Further, the exceptions to the general prohibition against sharing in profits and losses which are currently in paragraphs .10 and .20 of the Rule's Supplemental Material have been clarified and relocated to proposed paragraph 352(c) under the heading “Joint Accounts and Order Errors.” Additional amendments are non-substantive changes, such as the clarification of rule text and the revision of dated language to reflect current usage.

(2)Statutory Basis The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with the requirements of sections 6(b)(5) 6 of the Exchange Act. Section 6(b)(5) requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and national market system, and in general, to protect investors and the public interest. The Exchange believes that the proposed rule change is designed to accomplish these ends

(1)by placing limitations on loan arrangements between personnel associated with a member organization in any registered capacity on the one hand, and customers on the other,

(2)by integrating the Rule's Interpretation into the proposed Rule, and

(3)by clarifying both the Rule's scope and purpose with respect to prohibiting members, member organizations, and specified associated persons of such from entering into arrangements that guarantee the payment of a debit balance in any customer account; guarantee a customer against loss; or establish a profit and/or loss-sharing agreement with a customer. 7 6 15 U.S.C. 78f(b)(5). 7 Telephone conversation between William Jannace, Director, Rule and Interpretive Standards, NYSE, and Lourdes Gonzalez, Assistant Chief Counsel, Division of Market Regulation, Commission, (July 11, 2005). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposal does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. 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 Exchange Act. The Commission in particular solicits comment on the following question(s): Will any changes created by combining Rule 352 paragraphs

(a)and

(b)into proposed Rule 352 paragraph

(a)allow a person associated with a member organization as a registered representative or officer, to guarantee to his employer the payment of the debit balance in a customer's account? If so, will such proposed change create any adverse impact on a member organization's incentive to supervise the activities of a person associated with such member organization as a registered representative or officer? Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSE-2004-47 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-NYSE-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 Room, 100 F Street, NE., Washington, DC 20549. Copies of such filing will also be available for inspection and copying at the principal office of the NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to the File Number SR-NYSE-2004-47 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 8 8 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4234 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52180; File No. SR-OC-2005-02] Self-Regulatory Organization; OneChicago, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Listing Standards for Security Futures Products and the Final Settlement Price for Futures on Narrow-Based Security Indexes July 29, 2005. Pursuant to section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-7 thereunder 2 notice is hereby given that on July 20, 2005 OneChicago, LLC (“OneChicago” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in items I, II, and III below, which Items have been prepared by OneChicago. 3 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(7). 2 17 CFR 240.19b-7. 3 With the permission of OneChicago, the Commission made typographical, non-substantive corrections to the text of the proposed rule change. Telephone conversations between Madge Piro, Counsel for OneChicago, and Jennifer Dodd, Special Counsel, Division of Market Regulation (“Division”), Commission, July 21 and 29, 2005. OneChicago also has filed the proposed rule change with the Commodity Futures Trading Commission (“CFTC”). OneChicago filed a written certification with CFTC under Section 5c(c) of the Commodity Exchange Act (“CEA”) 4 on July 18, 2005. 4 7 U.S.C. 7a-2(c). I. Self-Regulatory Organization's Description of the Proposed Rule Change OneChicago is proposing to amend its listing standards for security futures products (“SFPs”) and its rule relating to the final settlement price for futures on narrow-based security indexes (“NBIs”). The text of the proposed rule change follows; additions are *italicized* ; deletions are [bracketed]. [Eligibility and Maintenance Criteria for Security Futures Products] *906* [I.] *Listing Standards* *(a)* Initial listing standards for a security futures product based on a single security. [A.] For a security futures product that is physically settled to be eligible for initial listing, the security underlying the futures contract must meet each of the following requirements: [(i)] *(1)* It must be a common stock, an American Depositary Receipt (“ADR”) representing common stock or ordinary shares, a share of an exchange traded fund (“ETF Share”), a trust issued receipt (“TIR”) or a share of a registered closed-end management investment company (“Closed-End Fund Share”). [(ii)] *(2)* It must be registered under Section 12 of the Securities Exchange Act of 1934 (as amended from time to time, the “Exchange Act”), and its issuer must be in compliance with any applicable requirements of the Exchange Act. [(iii)] *(3)* It must be listed on a national securities exchange (“Exchange”) or traded through the facilities of a national securities association (“Association”) and reported as a “national market system” security as set forth in Rule 11Aa3-1 under the Exchange Act (“NMS security”). [(iv)] *(4)* There must be at least seven million shares or receipts evidencing the underlying security outstanding that are owned by persons other than those required to report their security holdings pursuant to Section 16(a) of the Exchange Act. Requirement [(iv)] *(4)* as Applied to Restructure Securities: In the case of an equity security that a company issues or anticipates issuing as the result of a spin-off, reorganization, recapitalization, restructuring or similar corporate transaction (“Restructure Security”), [OneChicago, LLC (“OneChicago”)] *the Exchange* may assume that this requirement is satisfied if, based on a reasonable investigation, it determines that, on the product's intended listing date:

(A)at least 40 million shares of the Restructure Security will be issued and outstanding; or

(B)the Restructure Security will be listed on an Exchange or automated quotation system that is subject to an initial listing requirement of no less than seven million publicly owned shares. In the case of a Restructure Security issued or distributed to the holders of the equity security that existed prior to the ex-date of a spin-off, reorganization, recapitalization, restructuring or similar corporate transaction (“Original Equity Security”), [OneChicago] *the Exchange* may consider the number of outstanding shares of the Original Equity Security prior to the spin-off, reorganization, recapitalization, restructuring or similar corporate transaction (“Restructuring Transaction”). [(v)] *(5)* In the case of an underlying security other than an ETF Share, TIR or Closed-End Fund Share, there must be at least 2,000 securityholders. Requirement [(v)] *(5)* as Applied to Restructure Securities: If the security under consideration is a Restructure Security, [OneChicago] *the Exchange* may assume that this requirement is satisfied if, based on a reasonable investigation,[OneChicago] *the Exchange* determines that, on the product's intended listing date:

(A)at least 40 million shares of the Restructure Security will be issued and outstanding; or

(B)the Restructure Security will be listed on an Exchange or automated quotation system that is subject to an initial listing requirement of at least 2,000 shareholders. In the case of a Restructure Security issued or distributed to the holders of the Original Equity Security, [OneChicago] *the Exchange* may consider the number of shareholders of the Original Equity Security prior to the Restructuring Transaction. [(vi)] *(6)* In the case of an underlying security other than an ETF Share, TIR or Closed-End Fund Share, it must have trading volume (in all markets in which the underlying security is traded) of at least 2,400,000 shares in the preceding 12 months. Requirement [(vi)] *(6)* as Applied to Restructure Securities: Look-Back Test: In determining whether a Restructure Security that is issued or distributed to the shareholders of an Original Equity Security (but not a Restructure Security that is issued pursuant to a public offering or rights distribution) satisfies this requirement,[OneChicago] *the Exchange* may “look back” to the trading volume history of the Original Equity Security prior to the ex-date of the Restructuring Transaction if the following Look-Back Test is satisfied: [(1)] *(A)* The Restructure Security has an aggregate market value of at least $500 million; [(2)] *(B)* The aggregate market value of the Restructure Security equals or exceeds the Relevant Percentage (defined below) of the aggregate market value of the Original Equity Security; [(3)] *(C)* The aggregate book value of the assets attributed to the business represented by the Restructure Security equals or exceeds $50 million and the Relevant Percentage of the aggregate book value of the assets attributed to the business represented by the Original Equity Security; or [(4)] *(D)* The revenues attributed to the business represented by the Restructure Security equal or exceed $50 million and the Relevant Percentage of the revenues attributed to the business represented by the Original Equity Security. For purposes of determining whether the Look-Back Test is satisfied, the term “Relevant Percentage” means:

(i)25%, when the applicable measure determined with respect to the Original Equity Security or the business it represents includes the business represented by the Restructure Security; and

(ii)33-1/3%, when the applicable measure determined with respect to the Original Equity Security or the business it represents excludes the business represented by the Restructure Security. In calculating comparative aggregate market values, [OneChicago] *the Exchange* will use the Restructure Security's closing price on its primary market on the last business day prior to the date on which the Restructure Security is selected as an underlying security for a security futures product (“Selection Date”), or the Restructure Security's opening price on its primary market on the Selection Date, and will use the corresponding closing or opening price of the related Original Equity Security. Furthermore, in calculating comparative asset values and revenues, [OneChicago] *the Exchange* will use the issuer's

(i)latest annual financial statements or

(ii)most recently available interim financial statements (so long as such interim financial statements cover a period of not less than three months), whichever are more recent. Those financial statements may be audited or unaudited and may be pro forma. Limitation on Use of Look-Back Test: Except in the case of a Restructure Security that is distributed pursuant to a public offering or rights distribution, [OneChicago] *the Exchange* will not rely upon the trading volume history of an Original Equity Security for any trading day unless it also relies upon the market price history for that trading day. In addition, once [OneChicago] *the Exchange* commences to rely upon a Restructure Security's trading volume and market price history for any trading day,[OneChicago] *the Exchange* will not rely upon the trading volume and market price history of the Original Equity Security for any trading day thereafter. [(vii)] *(7)* In the case of an underlying security that is an ETF Share, TIR or Closed-End Fund Share, it must have had a total trading volume (in all markets in which the underlying security has traded) of at least 2,400,000 shares or receipts evidencing the underlying security in the preceding 12 months. [(viii)] *(8)* If the underlying security is a “covered security” as defined under Section 18(b)(1)(A) of the Securities Act of 1933, the market price per share of the underlying security has been at least $3.00 for the previous five consecutive business days preceding the date on which the Exchange submits a certificate to The Options Clearing Corporation for listing and trading. For purposes of this provision, the market price of such underlying security is measured by the closing price reported in the primary market in which the underlying security is traded. Requirement [(viii)] *(8)* as Applied to Restructure Securities: Look-Back Test: In determining whether a Restructure Security that is issued or distributed to the shareholders of an Original Equity Security (but not a Restructure Security that is issued pursuant to a public offering or rights distribution) satisfies this requirement, [OneChicago] *the Exchange* may “look back” to the market price history of the Original Equity Security prior to the ex-date of the Restructuring Transaction if the following Look-Back Test is satisfied: [(a)] *(A)* The Restructure Security has an aggregate market value of at least $500 million; [(b)] *(B)* The aggregate market value of the Restructure Security equals or exceeds the Relevant Percentage (defined below) of the aggregate market value of the Original Equity Security; [(c)] *(C)* The aggregate book value of the assets attributed to the business represented by the Restructure Security equals or exceeds both $50 million and the Relevant Percentage of the aggregate book value of the assets attributed to the business represented by the Original Equity Security; or [(d)] *(D)* The revenues attributed to the business represented by the Restructure Security equals or exceeds both $50 million and the Relevant Percentage of the revenues attributed to the business represented by the Original Equity Security. For purposes of determining whether the Look-Back Test is satisfied, the term “Relevant Percentage” means:

(i)25%, when the applicable measure determined with respect to the Original Equity Security or the business it represents includes the business represented by the Restructure Security; and

(ii)33- 1/3 %, when the applicable measure determined with respect to the Original Equity Security or the business it represents excludes the business represented by the Restructure Security. In calculating comparative aggregate market values,[OneChicago] *the Exchange* will use the Restructure Security's closing price on its primary market on the last business day prior to the Selection Date, or the Restructure Security's opening price on its primary market on the Selection Date, and will use the corresponding closing or opening price of the related Original Equity Security. Furthermore, in calculating comparative asset values and revenues, [OneChicago] *the Exchange* will use the issuer's

(i)latest annual financial statements or

(ii)most recently available interim financial statements (so long as such interim financial statements cover a period of not less than three months), whichever are more recent. Those financial statements may be audited or unaudited and may be pro forma. Restructure Securities Issued in Public Offering or Rights Distribution: In determining whether a Restructure Security that is distributed pursuant to a public offering or a rights distribution satisfies requirement [(viii)] (8), [OneChicago] *the Exchange* may look back to the market price history of the Original Equity Security if:

(i)the foregoing Look-Back Test is satisfied;

(ii)the Restructure Security trades “regular way” on an Exchange or automatic quotation system for at least five trading days immediately preceding the Selection Date; and

(iii)at the close of trading on each trading day on which the Restructure Security trades “regular way” prior to the Selection Date, as well as at the opening of trading on Selection Date, the market price of the Restructure Security was at least $3.00. Limitation on Use of Look-Back Test: Except in the case of a Restructure Security that is distributed pursuant to a public offering or rights distribution, [OneChicago] *the Exchange* will not rely upon the market price history of an Original Equity Security for any trading day unless it also relies upon the trading volume history for that trading day. In addition, once [OneChicago] *the Exchange* commences to rely upon a Restructure Security's trading volume and market price history for any trading day, [OneChicago] *the Exchange* will not rely upon the trading volume and market price history of the related Original Equity Security for any trading day thereafter. [(ix)] *(9)* If the underlying security is not a “covered security” as defined under Section 18(b)(1)(A) of the Securities Act of 1933, it must have had a market price per security of at least $7.50, as measured by the lowest closing price reported in any market in which it has traded, for the majority of business days during the three calendar months preceding the date of selection. Requirement [(ix)] *(9)* as Applied to Restructure Securities: Look-Back Test: In determining whether a Restructure Security that is issued or distributed to the shareholders of an Original Equity Security (but not a Restructure Security that is issued pursuant to a public offering or rights distribution) satisfies this requirement, [OneChicago] *the Exchange* may “look back” to the market price history of the Original Equity Security prior to the ex-date of the Restructuring Transaction if the following Look-Back Test is satisfied: [(a)] *(A)* The Restructure Security has an aggregate market value of at least $500 million; [(b)] *(B)* The aggregate market value of the Restructure Security equals or exceeds the Relevant Percentage (defined below) of the aggregate market value of the Original Equity Security; [(c)] *(C)* The aggregate book value of the assets attributed to the business represented by the Restructure Security equals or exceeds both $50 million and the Relevant Percentage of the aggregate book value of the assets attributed to the business represented by the Original Equity Security; or [(d)] *(D)* The revenues attributed to the business represented by the Restructure Security equals or exceeds both $50 million and the Relevant Percentage of the revenues attributed to the business represented by the Original Equity Security. For purposes of determining whether the Look-Back Test is satisfied, the term “Relevant Percentage” means:

(i)25%, when the applicable measure determined with respect to the Original Equity Security or the business it represents includes the business represented by the Restructure Security; and

(ii)33-1/3%, when the applicable measure determined with respect to the Original Equity Security or the business it represents excludes the business represented by the Restructure Security. In calculating comparative aggregate market values, [OneChicago] *the Exchange* will use the Restructure Security's closing price on its primary market on the last business day prior to the Selection Date, or the Restructure Security's opening price on its primary market on the Selection Date, and will use the corresponding closing or opening price of the related Original Equity Security. Furthermore, in calculating comparative asset values and revenues, [OneChicago] *the Exchange* will use the issuer's

(i)latest annual financial statements or

(ii)most recently available interim financial statements (so long as such interim financial statements cover a period of not less than three months), whichever are more recent. Those financial statements may be audited or unaudited and may be pro forma. Restructure Securities Issued in Public Offering or Rights Distribution: In determining whether a Restructure Security that is distributed pursuant to a public offering or a rights distribution satisfies requirement [(ix)] *(9)* , [OneChicago] *the Exchange* may look back to the market price history of the Original Equity Security if:

(i)the foregoing Look-Back Test is satisfied;

(ii)the Restructure Security trades “regular way” on an Exchange or automatic quotation system for at least five trading days immediately preceding the Selection Date; and

(iii)at the close of trading on each trading day on which the Restructure Security trades “regular way” prior to the Selection Date, as well as at the opening of trading on Selection Date, the market price of the Restructure Security was at least $7.50. Limitation on Use of Look-Back Test: Except in the case of a Restructure Security that is distributed pursuant to a public offering or rights distribution,[OneChicago] *the Exchange* will not rely upon the market price history of an Original Equity Security for any trading day unless it also relies upon the trading volume history for that trading day. In addition, once [OneChicago] *the Exchange* commences to rely upon a Restructure Security's trading volume and market price history for any trading day, [OneChicago] *the Exchange* will not rely upon the trading volume and market price history of the related Original Equity Security for any trading day thereafter. [(x)] *(10)* If the underlying security is an ADR: [(a)] *(A)* [OneChicago] *The Exchange* must have in place an effective surveillance sharing agreement with the primary exchange in the home country where the stock underlying the ADR is traded; [(b)] *(B)* The combined trading volume of the ADR and other related ADRs and securities in the U.S. ADR market, or in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement, represents (on a share equivalent basis) at least 50% of the combined worldwide trading volume in the ADR, the security underlying the ADR, other classes of common stock related to the underlying security, and ADRs overlying such other stock over the three-month period preceding the dates of selection of the ADR for futures trading (“Selection Date”); [(c)(1)] *(C)(i)* The combined trading volume of the ADR and other related ADRs and securities in the U.S. ADR market, and in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement, represents (on a share equivalent basis) at least 20% of the combined worldwide trading volume in the ADR and in other related ADRs and securities over the three-month period preceding the Selection Date; [(2)] *(ii)* The average daily trading volume for the ADR in the U.S. markets over the three-month period preceding the Selection Date is at least 100,000 receipts; and [(3)] *(iii)* The daily trading volume for the ADR is at least 60,000 receipts in the U.S. markets on a majority of the trading days for the three-month period preceding the Selection Date; or [(d)] *(D)* The Securities and Exchange Commission and Commodity Futures Trading Commission have otherwise authorized the listing. [(xi)] *(11)* [OneChicago] *The Exchange* will not list for trading any security futures product where the underlying security is a Restructure Security that is not yet issued and outstanding, regardless of whether the Restructure Security is trading on a “when issued” basis or on another basis that is contingent upon the issuance or distribution of securities. [II.]

(b)Maintenance standards for a security futures product based on a single security. [A] *(1) The Exchange* [OneChicago] will not open for trading any security futures product that is physically settled with a new delivery month, and may prohibit any opening purchase transactions in the security futures product already trading, to the extent it deems such action necessary or appropriate, unless the underlying security meets each of the following maintenance requirements; provided that, if the underlying security is an ETF Share, TIR or Closed-End Fund Share, the applicable requirements for initial listing of the related security futures product (as described in [I.A.] *906(a)* above) shall apply in lieu of the following maintenance requirements: [(i)] *(A)* It must be registered under Section 12 of the Exchange Act. [(ii)] *(B)* There must be at least 6,300,000 shares or receipts evidencing the underlying security outstanding that are owned by persons other than those who are required to report their security holdings pursuant to Section 16(a) of the Exchange Act. [(iii)] *(C)* There must be at least 1,600 securityholders. [(iv)] *(D)* It must have had an average daily trading volume (across all markets in which the underlying security is traded) of least 82,000 shares or receipts evidencing the underlying security in each of the preceding 12 months. Requirement [(iv)] *(D)* as Applied to Restructure Securities: If a Restructure Security is approved for a security futures product trading under the initial listing standards in [Section I] *paragraph

(a)of this Rule* , the average daily trading volume history of the Original Equity Security (as defined in [Section I] *paragraph

(a)of this Rule* ) prior to the commencement of trading in the Restructure Security (as defined in [Section I] *paragraph

(a)of this Rule* ), including “when-issued” trading, may be taken into account in determining whether this requirement is satisfied. [Requirement

(v)as Applied to Restructure Securities: If a Restructure Security is approved for security futures product trading under the initial listing standards in Section I, the market price history of the Original Equity Security prior to the commencement of trading in the Restructure Security, including “when-issued” trading, may be taken into account in determining whether this requirement is satisfied.] [(v)] *(E)* The market price per share of the underlying security has not closed below $3.00 on the previous trading day to the Expiration Day of the nearest expiring Contract on the underlying security. The market price per share of the underlying security will be measured by the closing price reported in the primary market in which the underlying security traded. Requirement [(v)] *(E)* as Applied to Restructure Securities: If a Restructure Security is approved for security futures product trading under the initial listing standards in [Section I] *paragraph

(a)of this Rule* , the market price history of the Original Equity Security prior to the commencement of trading in the Restructure Security, including “when-issued” trading, may be taken into account in determining whether this requirement is satisfied. [(vi)] *(F)* If the underlying security is an ADR and was initially deemed appropriate for security futures product trading under paragraph [(x)(b)] *(10)(B)* or [(x)(c)] *(10)(C)* in [Section I] *paragraph

(a)of this Rule* , [OneChicago] *the Exchange* will not open for trading security futures products having additional delivery months on the ADR unless: [(a)] *(i)* The percentage of worldwide trading volume in the ADR and other related securities that takes place in the U.S. and in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement for any consecutive three-month period is: [(1)] *(I)* at least 30%, without regard to the average daily trading volume in the ADR; or [(2)] *(II)* at least 15% when the average U.S. daily trading volume in the ADR for the previous three months is at least 70,000 receipts; [(b)] *(ii) The Exchange* [OneChicago] has in place an effective surveillance sharing agreement with the primary exchange in the home country where the security underlying the ADR is traded; or [(c)] *(iii)* The Securities and Exchange Commission and Commodity Futures Trading Commission have otherwise authorized the listing. [B.] *(2) The Exchange* [OneChicago] will not open trading in a security futures product with a new delivery month unless: [(i)] *(A)* The issuer of the underlying security satisfies applicable Exchange Act reporting requirements, or corrects any failure within 30 days after the date the report was due to be filed; and [(ii)] *(B)* The underlying security is listed on a national securities exchange or is principally traded through the facilities of a national securities association and is designated as an NMS security. [C.] *(3)* If prior to the withdrawal from trading of a security futures product covering an underlying security that has been found not to meet [OneChicago's] *the Exchange's* requirements for continued approval, [OneChicago] *the Exchange* determines that the underlying security again meets [OneChicago's] *the Exchange's* requirements, [OneChicago] *the Exchange* may open for trading new delivery months in such security futures product and may lift any restriction on opening purchase transactions. [D.] *(4)* Whenever [OneChicago] *the Exchange* announces that approval of an underlying security has been withdrawn for any reason or that [OneChicago] *the Exchange* has been informed that the issuer of an underlying security has ceased to be in compliance with Exchange Act reporting requirements, each Clearing Member and Exchange Member (as such terms are defined in the Rules of [OneChicago] *the Exchange* as in effect from time to time) shall, prior to effecting any transaction in security futures products with respect to such underlying security for any customer, inform such customer of such fact and that [OneChicago] *the Exchange* may prohibit further transactions in such security futures products as it determines is necessary and appropriate. *1006* [III.] *Listing Standards* *(a)* Initial eligibility criteria for a security futures product based on an index composed of two or more securities. [A.] For a security futures product [that is physically settled] based on an index composed of two or more securities to be eligible for initial listing, the index must: [(i)] *(1)* Meet the definition of a narrow-based security index in Section 1a(25) of the Commodity Exchange Act and Section 3(a)(55) of the Exchange Act; [and] [(ii)] *(2)* Meet the following requirements: [(a)] *(A)(i)* It must be capitalization-weighted, modified capitalization-weighted, price-weighted, *share-weighted* , equal dollar-weighted [or], [in the case of an index underlying physically settled security futures products only,] approximately equal dollar-weighted, *or modified equal-dollar weighted* . *(ii)* [Weighting Methodology for Approximately Equal Dollar-Weighted Indices Underlying Physically Settled Security Futures Products:] In the case of a [physically settled] security futures product based on an approximately equal dollar-weighted index composed of one or more securities, each component security will be weighted equally based on its market price on the *index* [S] *s* election [D] *d* ate, subject to rounding up or down the number of shares or receipts evidencing such security to the nearest multiple of 100 shares or receipts. *(iii) In the case of a modified equal-dollar weighted index, each underlying component represents a pre-determined weighting percentage of the entire index. Each component is assigned a weight that takes into account the relative market capitalization of the securities comprising the index.* *

(iv)In the case of a share-weighted index, the index is calculated by multiplying the price of the component security by an adjustment factor. Adjustment factors are chosen to reflect the investment objective deemed appropriate by the designer of the index and will be published by the Exchange as part of the contract specifications. The value of the index is calculated by adding the weight of each component security and dividing the total by an index divisor, calculated to yield a benchmark index level as of a particular date. A share-weighted index is not adjusted to reflect changes in the number of outstanding shares of its components. * [(b)] *(B)* Its component securities must be registered under Section 12 of the Exchange Act. [(c)] *(C)* Subject to *Subparagraphs* [(e)]

(E)and [(l)] *(O)* below, the component securities that account for at least 90% of the total index weight and at least 80% of the total number of component securities in the index must meet the requirements for listing a single-security future, as set forth in [Section I] *Rule 906(a)* . [(d)] ( *D* ) Each component security in the index must have a minimum market capitalization of at least $75 million, except that each of the lowest weighted securities in the index that in the aggregate account for no more than 10% of the weight of the index may have a minimum market capitalization of only $50 million. [(e)] ( *E* ) The average daily trading volume in each of the preceding six months for each component security in the index must be at least 45,500 shares or receipts, except that each of the lowest weighted component securities in the index that in the aggregate account for no more than 10% of the weight of the index may have an average daily trading volume of only 22,750 shares or receipts for each of the last six months. [(f)] ( *F* ) Each component security in the index must be [(1)] *(i)* listed on an Exchange or traded through the facilities of an Association and [(2)] *(ii)* reported as an NMS security. [(g)] ( *G* ) Foreign securities or ADRs thereon that are not subject to comprehensive surveillance sharing agreements must not represent more than 20% of the weight of the index. [(h)] ( *H* ) The current underlying index value must be reported at least once every 15 seconds during the time the security futures product is traded on [OneChicago] *the Exchange.* [(i)] ( *I* ) An equal dollar-weighted index must be rebalanced at least once every calendar quarter, except that an approximately equal dollar-weighted index underlying a [physically settled] security futures product need only be rebalanced as provided in [(j)] *(L)* below. *(J) A modified equal-dollar weighted index must be rebalanced quarterly.* *(K) A share-weighted index will not be rebalanced.* [(j)] ( *L* ) An approximately equal dollar-weighted index underlying a [physically settled] security futures product must be rebalanced annually on *December 31 of each year* if the [aggregate value ( *i.e.* , the original number of shares multiplied by their current price) of the security position with the highest value is two or more times greater than the aggregate value of the security position with the lowest value in the index for any period of 10 consecutive trading days within the last month preceding the date of determination. In addition, OneChicago may from time to time, but no more frequently than quarterly, elect to rebalance any approximately equal dollar-weighted index underlying a physically settled security futures product depending on several factors, including the relative price changes of the component securities, the levels of volume and open interest in the contracts and input from market participants.] *notional value of the largest component is at least twice the notional value of the smallest component for 50 per cent or more of the trading days in the three months prior to December 31 of each year. For purposes of this provision the “notional value” is the market price of the component times the number of shares of the underlying component in the index. In addition, the Exchange reserves the right to rebalance quarterly at its discretion.* [Procedure for Rebalancing under (j): The date of determination for the mandatory annual rebalancing of an approximately equal dollar-weighted index underlying a physically settled security futures product as described in the first sentence of

(j)will be the last trading day of the year. New contracts issued on or after a date on which the corresponding index is rebalanced in accordance with

(j)will be based on an index consisting of the original component securities, weighted applying the methodology described under

(a)above on the basis of security prices on the rebalancing date. Outstanding contracts will not be affected by any rebalancing.] *(M) An underlying index may be rebalanced on interim basis if warranted as a result of extraordinary changes in the relative values of the component securities. To the extent investors with open position must rely upon the continuity of the security futures Contract on the index, outstanding Contracts are unaffected by rebalancings.* [(k)] ( *N* ) If the underlying index is maintained by a broker-dealer, the index must be calculated by a third party who is not a broker-dealer, and the broker-dealer must have in place an information barrier around its personnel who have access to information concerning changes in and adjustments to the index. [(l)] ( *O* ) In a capitalization-weighted index, the lesser of: [(1)] ( *i* ) the five highest weighted component securities in the index each have had an average daily trading volume of at least 90,000 shares or receipts over the past six months; or [(2)] ( *ii* ) the highest weighted component securities in the index that in the aggregate represent at least 30% of the total number of securities in the index each have had an average daily trading volume of at least 90,000 shares or receipts over the past six months. *(P) If a security future on an index is cash settled, it must be designated as AM-settled.* [IV.] ( *(b)* ) Maintenance standards for a security futures product based on an index composed of two or more securities. [A.] ( *1* )[OneChicago] *The Exchange* will not open for trading security futures products [that are physically settled based] on an index composed of two or more securities with a new delivery month unless the underlying index: [(i)] ( *A.* ) Meets the definition of a narrow-based security index in Section 1a(25) of the Commodity Exchange Act and Section 3(a)(55) of the Exchange Act; and [(ii)] ( *B.* ) Meets the following requirements: [(a)] ( *i* ) Its component securities must be registered under Section 12 of the Exchange Act; [(b)] ( *ii* ) Subject to [(d)] ( *iv* ) and [(k)] ( *xiii* ) below, the component securities that account for at least 90% of the total index weight and at least 80% of the total number of component securities in the index must meet the requirements for listing a single-security future, as set forth in [Section I] *Rule 906(a).* [(c)] ( *iii* ) Each component security in the index must have a market capitalization of at least $75 million, except that each of the lowest weighted component securities that in the aggregate account for no more than 10% of the weight of the index may have a market capitalization of only $50 million. [(d)] ( *iv* ) The average daily trading volume in each of the preceding six months for each component security in the index must be at least 22,750 shares or receipts, except that each of the lowest weighted component securities in the index that in the aggregate account for no more than 10% of the weight of the index may have an average daily trading volume of at least 18,200 shares or receipts for each of the last six months. [(e)] ( *v* ) Each component security in the index must be [(1)] ( *I* ) listed on an Exchange or traded through the facilities of an Association and [(2)] ( *II* ) reported as an NMS security. [(f)] ( *vi* ) Foreign securities or ADRs thereon that are not subject to comprehensive surveillance sharing agreements must not represent more than 20% of the weight of the index. [(g)]( *vii* ) The current underlying index value must be reported at least once every 15 seconds during the time the security futures product is traded on [OneChicago] the Exchange. [(h)] ( *viii* ) An equal dollar-weighted index must be rebalanced at least once every calendar quarter, except that an approximately equal dollar-weighted index underlying a [physically settled] security futures product need only be rebalanced as provided in [(i)]

(I)below. [(i)] ( *ix* ) An approximately equal dollar-weighted index underlying a physically settled security futures product must be rebalanced annually *on December 31 of each year* if [the aggregate value ( *i.e.* , the original number of shares multiplied by their current price) of the security position with the highest value is two or more times greater than the aggregate value of the security position with the lowest value in the index for any period of 10 consecutive trading days within the last month preceding the date of determination. In addition, OneChicago may from time to time, but no more frequently than quarterly, elect to rebalance any approximately equal dollar-weighted index underlying a physically settled security futures product depending on several factors, including the relative price changes of the component securities, the levels of volume and open interest in the contracts and input from market participants.] *the notional value of the largest component is at least twice the notional value of the smallest component for 50 per cent or more of the trading days in the three months prior to December 31 of each year. For purposes of this provision the “notional value” is the market price of the component times the number of shares of the underlying component in the index. In addition, the Exchange reserves the right to rebalance quarterly at its discretion.* [Procedure for Rebalancing under (i): See under III.A.(ii)(j) above.] *(x) In a modified equal-dollar weighted index the Exchange will re-balance the index quarterly.* *(xi) In a share-weighted index, if a share-weighted Index fails to meet the maintenance listing standards under Rule 1006(b), the Exchange will not re-balance the index and will not issue Contracts for new delivery months for that index.* [(j)] ( *xii* ) If the underlying index is maintained by a broker-dealer, the index must be calculated by a third party who is not a broker-dealer, and the broker-dealer must have in place an information barrier around its personnel who have access to information concerning changes in and adjustments to the index. [(k)] ( *xiii* ) In a capitalization-weighted index, the lesser of: [(1)] ( *I* ) the five highest weighted component securities in the index each have had an average daily trading volume of at least 45,500 shares or receipts over the past six months; [and] *or* [(2)] ( *II* ) the highest weighted component securities in the index that in the aggregate represent at least 30% of the total number of stocks in the index each have had an average daily trading volume of at least 45,500 shares or receipts over the past six months. [(l)] ( *xiv* ) The total number of component securities in the index must not increase or decrease by more than 33-1/3% from the number of component securities in the index at the time of its initial listing. [E.] ( *2* ) If the foregoing maintenance standards *in subparagraph (b)* are not satisfied, [OneChicago] *the Exchange* will not open for trading a security futures product based on an index composed of two or more securities with a new delivery month, unless it receives the approval of the Securities and Exchange Commission and the Commodity Futures Trading Commission. 1007 LISTING STANDARDS For MicroSectors Cash Settled narrow-based index futures [V.] ( *a* ) Initial eligibility criteria for a MicroSector security futures product, based on an index composed of two or more securities. [A.] *Notwithstanding Rule 1006* , [F] *f* or a cash settled Dow Jones MicroSector security futures product, the Dow Jones MicroSector Index must: [(i)] ( *1* ) Meet the definition of a narrow-based security index in Section 1a(25) of the Commodity Exchange Act and Section 3(a)(55) of the Exchange Act; and [(ii)] ( *2* ) Meet the following requirements: [(a)] ( *A* ) It must be approximately equal dollar-weighted composed of one or more securities in which each component security will be weighted equally based on its market price on the Selection Date. [(b)] ( *B* ) Each of its component securities must be registered under Section 12 of the Exchange Act. [(c)] ( *C* ) Each of its component securities must be a component security in the Dow Jones U.S. Total Market Index or an ADR linked to a security in the Dow Jones Global Index. [(d)] ( *D* ) Each of its component securities must be the subject of a U.S. exchange-traded option on the date of selection for inclusion in the index. [(e)] *(E)* Each of its component securities must have a trading history on a U.S. exchange for at least 12 months. [(f)] *(F)* Each of its component securities must have a “float market capitalization” of at least one billion dollars. [(g)] *(G)* Each of its component securities close at or above $7.50 for each of the trading days in the three months prior to selection for the index. [(h)] *(H)* Subject to [(g),

(i)and (k)] *(G),

(I)and (K)* below, component securities that account for at least 90 per cent of the total index weight and at least 80 per cent of the total number of component securities in the index must meet the requirements for listing a single-security future contract, as set forth in [Section I] *Rule 906(a)* . [(i)] *(I)* Each of its component securities must have an average daily trading volume in each of the preceding 12 months prior to selection for inclusion in the index greater than 109,000 shares (an ADR must have an average daily trading volume greater than 100,000 receipts). [(j)] *(J)* Each of its component securities must be [(1)] *(i)* listed on an Exchange or traded through the facilities of an Association and [(2)] *(ii)* reported as an NMS security. [(k)] *(K)* [(1)] *(i)* [OneChicago] *The Exchange* must have in place an effective surveillance sharing agreement with the primary exchange in the home country where the stock underlying each component ADR is traded; [(2)] *(ii)* The combined trading volume of each component ADR and other related ADRs and securities in the U.S. ADR market, or in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement, represents (on a share equivalent basis) at least 50% of the combined worldwide trading volume in the ADR, the security underlying the ADR, other classes of common stock related to the underlying security, and ADRs overlying such other stock over the three-month period preceding the dates of selection of the ADR for futures trading (“Selection Date”); [(3)(A)] *(iii) (I)* The combined trading volume of each component ADR and other related ADRs and securities in the U.S. ADR market, and in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement, represents (on a share equivalent basis) at least 20% of the combined worldwide trading volume in the ADR and in other related ADRs and securities over the three-month period preceding the Selection Date; [(B)] *(II)* The average daily trading volume for the ADR in the U.S. markets over the three-month period preceding the Selection Date is at least 100,000 receipts; and [(C)] *(III)* The daily trading volume for the ADR is at least 60,000 receipts in the U.S. markets on a majority of the trading days for the three-month period preceding the Selection Date; [(4)] *(iv)* The Securities and Exchange Commission and Commodity Futures Trading Commission have otherwise authorized the listing; or [(5)] *(v)* Foreign securities or ADRs thereon that are not subject to comprehensive surveillance sharing agreements must not represent more than 20% of the weight of the index. [(l)] *(L)* The current underlying index value must be reported at least once every 15 seconds during the time the MicroSector futures product is traded on [OneChicago] *the Exchange* . [(m)] *(M)* An index underlying a MicroSector future must be reconstituted and rebalanced if the notional value of the largest component is at least twice the notional [volume] *value* of the smallest component for 50 per cent or more of the trading days in the three months prior to December 31 of each year. For purposes of this provision the “notional value” is the market price of the component times the number of shares of the underlying component in the index. Reconstitution and rebalancing are also mandatory if the number of component securities in the index is greater than five at the time of rebalancing. In addition, [OneChicago] *the Exchange* reserves the right to rebalance quarterly at its discretion. [(n)] *(N)* The MicroSector futures products will be AM settled. [(o)] *(O)* The initial indexes underlying MicroSector futures products will be created only for industry groups that have five or more qualifying securities. [VI] *(b)* Maintenance standards for a MicroSector futures product based on an index composed of two or more securities. [A.] [OneChicago] *The Exchange* will not open for trading MicroSector futures products that are cash settled based on an index composed of two or more securities with a new delivery month unless the underlying index: [(i)] *(1)* Meets the definition of a narrow-based security index in Section 1a(25) of the Commodity Exchange Act and Section 3(a)(55) of the Exchange Act; and [(ii)] *(2)* Meets the following requirements: [(a)] *(A)* All of its component securities must be registered under Section 12 of the Exchange Act; [(b)] *(B)* Subject to [(d) and (k)] *(D) and (K)* below, component securities that account for at least 90 per cent of the total index weight and at least 80 per cent of the total number of component securities in the index must meet the requirements for listing a single-security future, as set forth in [Section I] *Rule 906(a)* . [(c)] *(C)* Each component security in the index must have a market capitalization of at least $75 million, except that each of the lowest weighted component securities that in the aggregate account for no more than 10 per cent of the weight of the index may have a market capitalization of only $50 million. [(d)] *(D)* The average daily trading volume in each of the preceding six months for each component security in the index must be at least 22,750 shares or receipts, except that each of the lowest weighted component securities in the index that in the aggregate account for no more than 10 per cent of the weight of the index may have an average daily trading volume of at least 18,200 shares for each of the last six months [(e)] *(E)* Each component security in the index must be [(1)] *(i)* listed on an Exchange or traded through the facilities of an Association and [(2)] *(ii)* reported as an NMS security. [(f)] *(F)* The current underlying index value must be reported at least once every 15 seconds during the time the security futures product is traded on [OneChicago] *the Exchange* . [(g)] *(G)* An approximately equal dollar weighted index underlying a MicroSector future must be reconstituted and rebalanced if the notional value of the largest component is at least twice the notional volume of the smallest component for 50 per cent or more of the trading days in the three months prior to December 31 of each year. For purposes of this provision the “notional value” is the market price of the component times the number of shares of the underlying component in the index. Reconstitution and rebalancing are also mandatory if the number of component securities in the index is greater than five at the time of rebalancing. In addition, [OneChicago] *the Exchange* reserves the right to rebalance quarterly at its discretion. [(h)] *(H)* The total number of component securities in the index must not increase or decrease by more than 33- 1/3 % from the number of component securities in the index at the time of its initial listing. [(i)] *(I)* [(1)] *(i) The Exchange* [OneChicago] must have in place an effective surveillance sharing agreement with the primary exchange in the home country where the stock underlying each component ADR is traded; [(2)] *(ii)* The combined trading volume of each component ADR and other related ADRs and securities in the U.S. ADR market, or in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement, represents (on a share equivalent basis) at least 50 per cent of the combined worldwide trading volume in the ADR, the security underlying the ADR, other classes of common stock related to the underlying security, and ADRs overlying such other stock over the three-month period preceding the dates of selection of the ADR for futures trading (“Selection Date”); [(3)] *(iii)* [(a)] *(I)* The combined trading volume of the ADR and other related ADRs and securities in the U.S. ADR market, and in markets with which [OneChicago] *the Exchange* has in place an effective surveillance sharing agreement, represents (on a share equivalent basis) at least 20 per cent of the combined worldwide trading volume in the ADR and in other related ADRs and securities over the three-month period preceding the Selection Date; [(b)] *(II)* The average daily trading volume for the ADR in the U.S. markets over the three-month period preceding the Selection Date is at least 100,000 receipts; and [(c)] *(III)* The daily trading volume for the ADR is at least 60,000 receipts in the U.S. markets on a majority of the trading days for the three-month period preceding the Selection Date; [(4)] *(iv)* The Securities and Exchange Commission and Commodity Futures Trading Commission have otherwise authorized the listing, or [(5)] *(v)* Foreign securities or ADRs thereon that are not subject to comprehensive surveillance sharing agreements must not represent more than 20 per cent of the weight of the index. [B.] *(2)* If the foregoing maintenance standards are not satisfied prior to opening a MicroSector futures product with a new delivery month, [OneChicago] *the Exchange* will either

(i)replace the component security or securities that fail to meet the maintenance standards with a security or securities that qualify under the initial listing standards for MicroSector futures products set forth in [Section V] *paragraph

(a)of this Rule* , or

(ii)receive the approval of the Securities and Exchange Commission and the Commodity Futures Trading Commission. 1002. Contract Specifications (i)(1) No Change

(2)Final Settlement Price.

(A)No Change

(B)Notwithstanding subparagraph (2)(A) of this Rule, if an opening price for one or more securities underlying a Stock Index Future is not readily available, [the Chief Executive Officer of the Exchange or his designee for such purpose (referred to hereafter in this Rule 1002(i) as the “Designated Officer”)] *the Exchange* will determine whether the security or securities are likely to open within a reasonable time.

(i)If the [Designated Officer] *Exchange* determines that one or more component securities are not likely to open within a reasonable time, then for the component security or securities which the [Designated Officer] *Exchange* determined were not likely to open within a reasonable time, the last trading price of the underlying security or securities during the most recent regular trading session for such security or securities will be used to calculate the special opening quotation.

(ii)If the [Designated Officer] *Exchange* determines that the security or securities are likely to open within a reasonable time, then for the component security or securities which the [Designated Officer] *Exchange* determined were likely to open within a reasonable time, the next available opening price of such security or securities will be used to calculate the special opening quotation.

(C)No Change

(D)No Change II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose OneChicago proposes to amend its Eligibility and Maintenance Criteria for Security Futures Products (“Listing Standards”) by incorporating them into the rules of the Exchange, deleting all references to “physically settled” in the Listing Standards pertaining to NBIs, permitting futures on modified equal-dollar weighted and share-weighted indexes, amending provisions related to the rebalancing of various NBIs, requiring AM settlement for cash settled security futures, and other conforming changes. The proposed rule change would also amend OneChicago Rule 1002(i)(2)(B) regarding the determination of when an opening price for one or more securities underlying a futures on an NBI (“Stock Index Futures”) is not available to determine the final settlement price of the Stock Index Future. The proposed rule change would amend the numbering of the Listing Standards to incorporate them into the rules of the Exchange. The Listing Standards pertaining to futures on a single security would be incorporated without changes (other than numbering) into new OneChicago Rule 906. The Listing Standards pertaining to NBIs would be incorporated into new OneChicago Rule 1006, and the Listing Standards for MicroSectors would be new OneChicago Rule 1007. The proposed rule change would delete all references to “physically settled” NBIs, making OneChicago Rules 1006(a) and

(b)generic as to the type of settlement process. Thus, the Listing Standards in OneChicago Rule 1006 would apply to cash settled and physically settled NBI contracts. 5 This proposed change is consistent with the listing standards for options on NBIs. 6 5 All futures on NBIs would be subject to the applicable position limits in OneChicago Rules 414 and 1002(e). The position limit for each cash settled future on an NBI would be calculated according to the Market Cap Position Limit or SSF Position Limit formula in OneChicago Rule 1002(e)(2). The position limit for physically settled futures on NBIs would be established by the Exchange in conformance with CFTC Regulation 41.25 as required in OneChicago Rule 414(a). *See* 17 CFR 41.25. 6 *See* Chicago Board Options Exchange (“CBOE”) Rules 24.2(d) and (e). The proposed rule change would add share-weighted and modified equal-dollar weighted to the list of permissible indexes. New provisions would also be added to define modified equal-dollar weighted and share-weighted indexes. These provisions are consistent with options listing standards previously approved by the Commission. 7 A modified equal-dollar weighted index is designed to be a fair measurement of a particular industry or sector but without assigning an excessive weight to one or more index component(s) that have a large market capitalization relative to other index components. In a modified equal-dollar weighted index, each underlying component security represents a pre-determined weighting percentage of the entire index. Each security in the index is assigned a weight that takes into account the relative market capitalization of the securities comprising the index. 7 Securities Exchange Act Release No. 49932 (June 28, 2004), 69 FR 40994 (July 7, 2004) (SR|CBOE-2002-24). A share-weighted index is calculated by multiplying the price of the component security by an adjustment factor. Adjustment factors are chosen to reflect the investment objective deemed appropriate by the designer of the index and would be published by the Exchange as part of the contract specifications. The value of the index is calculated by adding the weight of each component security and dividing the total by an index divisor, calculated to yield a benchmark index level as of a particular date. A share-weighted index is not adjusted to reflect changes in the number of outstanding shares of its components. New provisions would also be added regarding rebalancing of these indexes. Under the proposed rule change, a modified equal-dollar weighted index must be rebalanced quarterly and a share-weighted index would not be rebalanced. The proposed rule change would also amend the rebalancing language pertaining to approximately equal dollar-weighted index. Under the proposed rule change, an approximately equal dollar-weighted index would be required to be rebalanced annually on December 31 of each year if the notional value of the largest component is at least twice the notional value of the smallest component for 50 percent or more of the trading days in the three months prior to December 31 of each year. The Exchange would retain the right to rebalance quarterly at its discretion. This rebalancing requirement was adopted by the Exchange for MicroSector futures. 8 8 *See* Section V.A.ii.m of the Listing Standards for MicroSectors Cash Settled Narrow-Based Index Futures. In addition to rebalancing, the NBIs may be adjusted due to corporate events. Attached as Exhibit A is the Corporate Action Summary A for Approximately Equal Dollar-Weighted Indexes and Exhibit B is the Corporate Action Summary B for Share-Weighted Indexes. Depending on the index design, the Corporate Action Summary A or B may be modified. The Exchange would notify the public of the Corporate Actions that would be taken in regards to an index before the index begins trading. The proposed rule change would also permit the Exchange to rebalance an index on an interim basis if there are extraordinary changes in the relative values of the component securities. To the extent investors with open position must rely upon the continuity of the security futures contract on the index, the proposed rule change would leave outstanding contracts unaffected by the rebalancing. Consistent with OneChicago Rule 1002(i), the proposed rule change adds a provision that requires AM settlement for cash settled security futures on NBIs. Under the proposed rule change, OneChicago Rule 1002(i)(2)(B), which relates to the final settlement price of a Stock Index Future, would be amended by permitting the Exchange to make a determination when an opening price for one or more securities underlying a Stock Index Future is not readily available. Under the current OneChicago Rule, only the Chief Executive Officer of the Exchange or his designee, referred to as the Designated Officer, may make the determination whether the security or securities are likely to open within a reasonable time. The Exchange believes that it is more appropriate and provides more flexibility to state that the Exchange would make this determination. *CFMA Listing Standard Requirements for Security Futures.* Section 6(h) of the Act 9 requires that certain standards be met in order for an exchange to trade SFPs. OneChicago previously established that it met those standards in the proposed rule change submitted to the Commission. 10 OneChicago also established that it met those standards in the proposed rule change it submitted to the Commission regarding listing standards for MicroSectors. 11 The Exchange believes that the proposed rule change OneChicago submits at this time merely amends the current OneChicago Listing Standards and does not alter its ability to meet the standards required under section 6(h) of the Act. 12 9 15 U.S.C. 78f(h). 10 Securities Exchange Act Release No. 47114 (December 31, 2002), 68 FR 837 (January 7, 2003) (SR-OC-2002-24). 11 Securities Exchange Act Release No. 48191 (July 17, 2003), 68 FR 43555 (July 23, 2003) (SR-OC-2003-06). 12 15 U.S.C. 78f(h). Section 6(h)(3)(A) of the Act 13 requires that each security underlying an SFP must be registered pursuant to section 12 of the Act. 14 OneChicago believes that the Listing Standards continue to meet this requirement. 13 15 U.S.C. 78f(h)(3)(A). 14 15 U.S.C. 781. Section 6(h)(3)(B) of the Act 15 requires the market on which a physically settled SFP is traded have arrangements in place with a registered clearing agency for the payment and delivery of the securities underlying the SFP. The proposed rule change would not make amendments related to this requirement. OneChicago has entered into arrangements with both The Options Clearing Corporation (“OCC”) and the clearinghouse of the Chicago Mercantile Exchange Inc. (“CME”), both of which are registered clearing agencies, relating to the clearing of SFPs. By virtue of the CME clearinghouse being an associated clearinghouse of OCC, and OCC having in place arrangements with the National Securities Clearing Corporation for the delivery of securities underlying physically settled SFPs, One Chicago believes that it meets the requirements of section 6(h)(3)(B) of the Act. 16 15 15 U.S.C. 78f(h)(3)(B). 16 *Id.* The Exchange clarified its belief that the proposed rule change meets the requirement of Section 6(h)(3)(B) of the Act. Telephone conversation between Madge Piro, Counsel for OneChicago, and Jennifer Dodd, Special Counsel, Division, Commission, July 28, 2005. Section 6(h)(3)(C) of the Act 17 requires Listing Standards for security futures be no less restrictive than comparable Listing Standards for options traded on a national securities exchange. The Commission has approved a similar rule for CBOE. 18 Since CBOE has comparable listing standards, OneChicago believes that the proposed rule change meets the requirement of section 6(h)(3)(C) of the Act. 19 17 15 U.S.C. 78f(h)(3)(C). 18 *See* note 6 *supra* . 19 15 U.S.C. 78f(h)(3)(C). Section 6(h)(3)(D) of the Act 20 requires that all SFPs be based on common stock and such other equity securities as the Commission and CFTC have jointly determined is appropriate. The Commission and CFTC have jointly permitted that SFPs be based on depositary shares, 21 a share of an exchange traded fund, a trust issued receipt, or a share of a registered closed-end management investment company. 22 The proposed rule change would not amend the provisions in the Listing Standards pertaining to this requirement. Therefore, OneChicago believes that it continues to meet this requirement. 20 15 U.S.C. 78f(h)(3)(D). 21 *See* Securities Exchange Act Release No. 44725 (August 20, 2001), 67 FR 42670 (June 25, 2002). 22 *See* Securities Exchange Act Release No. 46090 (June 19, 2002), 67 FR 42670 (June 25, 2002). Section 6(h)(3)(E) of the Act 23 requires that each SFP be cleared by a clearing agency that has in place provisions for linked and coordinated clearing with other clearing agencies that clear SFPs, which permits an SFP to be purchased on one market and offset on another market that trades such product. OneChicago notes that pursuant to section 6(h)(7) of the Act, 24 the foregoing requirement is deferred until the “compliance date” (as defined therein). OneChicago expects that both OCC and CME clearinghouses would have in place procedures complying with the requirements of clause

(E)after such “compliance date.” Therefore, OneChicago believes that it continues to meet this requirement. 23 15 U.S.C. 78f(h)(3)(E). 24 15 U.S.C. 78f(h)(7). Section 6(h)(3)(F) of the Act 25 requires that broker-dealers must be subject to suitability rules comparable to those of a national securities association to effect transactions in SFPs. OneChicago believes it continues to satisfy this requirement through OneChicago Rule 605 which requires members to comply with the sales practice rules of the National Futures Association (“NFA”) or the National Association of Securities Dealers, Inc. (“NASD”), which include suitability rules. 25 15 U.S.C. 78f(h)(3)(F). Section 6(h)(3)(G) of the Act 26 requires that SFPs be subject to the prohibition against dual trading in Section 4j of CEA 27 and CFTC regulations. Pursuant to section 4j of CEA, 28 CFTC promulgated Regulation 41.27, 29 which states that an electronic futures exchange is subject to the dual trading rule if the exchange provides market participants with a time or place advantage or the ability to override a predetermined algorithm. OneChicago market participants have no such advantage or ability. Therefore, OneChicago believes that the dual trading rule does not apply to OneChicago. 26 15 U.S.C. 78f(h)(3)(G). 27 7 U.S.C. 4j. 28 *Id.* 29 17 CFR 41.27. Section 6(h)(3)(H) of the Act 30 provides that SFPs must not be readily susceptible to manipulation of the price of the SFP, the price of the underlying security, the price of the option on such security, or options on a group or index including such securities. Nothing in the proposed rule change would alter OneChicago's fulfillment of this requirement. Therefore, OneChicago believes that it continues to meet this requirement. OneChicago Rule 603 specifically prohibits market manipulation, and OneChicago Rule 604 prohibits OneChicago members or access persons from violating applicable laws. 30 15 U.S.C. 78f(h)(3)(H). Section 6(h)(3)(I) 31 of the Act requires that procedures be in place for coordinated surveillance among the markets on which an SFP is traded, any market on which any security underlying an SFP is traded, and other markets on which any related security is traded to detect manipulation and insider trading. OneChicago believes that it continues to meet this requirement through its affiliation with the Intermarket Surveillance Group, under which it has an agreement to share market surveillance and regulatory information with other members of the group, which includes all of the predominant U.S. securities exchanges. OneChicago is also a member of the Joint Audit Committee, in which the futures self-regulatory organizations have an agreement to share information for regulatory purposes. Therefore, OneChicago believes it continues to meet this requirement. 31 15 U.S.C. 78f(h)(3)(I). Section 6(h)(3)(J) of the Act 32 requires that an exchange have audit trails that are necessary or appropriate to facilitate the coordinated surveillance required under section 6(h)(3)(I) of the Act. 33 OneChicago believes that it continues to meet this requirement. The audit trail capability provided by CBOE *direct* ®, the trade matching engine used by OneChicago, creates and maintains an electronic transaction history database that contains information with respect to all orders, whether executed or not, and resulting transactions on the Exchange. This applies to orders entered through CBOE *direct* ® terminals as well as to orders routed to CBOE *direct* ® through CME's Globex® system. The information recorded with respect to each order includes: time received (by CBOE *direct* ® or Globex®), terms of the order, order type, instrument and contract month, price quantity, account type, account designation, user code, and clearing firm. 32 15 U.S.C. 78f(h)(3)(J). 33 15 U.S.C. 78f(h)(3)(I). OneChicago's electronic audit trail consists of data recorded by CBOE *direct* ® and Globex®, and OneChicago has full access to all such data. Information logged by CBOE *direct* ®, including orders received through CBOE *direct* ® terminals, are archived and provided to OneChicago each day. Orders received through Globex® are archived and maintained at CME. Together, these data sets enable OneChicago to trace each order back to the clearing firm by or through which it was submitted. If any question or issue arises as to the source of an order prior to submission by or through a clearing firm, OneChicago would request that the clearing firm provide an electronic or other record of the order. For orders that cannot be immediately entered into either CBOE *direct* ® and Globex®, and therefore would not be recorded electronically at the time they are placed, OneChicago Rule 403(b) requires that the Clearing Member or, if applicable, the Exchange Member or the Access Person receiving such order must prepare an order form in a non-alterable written medium, which must be time-stamped when received and include the account designation, date, and other required information ( *i.e.* , order terms, order type, instrument and contract month, price, and quantity). Each such form must be retained for at least five years from the time it was prepared. In addition, OneChicago Rule 501 establishes a general recordkeeping requirement pursuant to which each Clearing Member, Exchange Member, and Access Person must keep all books and records as required to be kept by it pursuant to CEA, CFTC regulations, the Act, regulations under the Act, and OneChicago Rules. OneChicago Rule 501 also requires that such books and records be made available to the Exchange upon request. Current CFTC regulations require books and records to be maintained for a period of five years. OneChicago believes that its audit trail continues to meet the requirement of section 6(h)(3)(J) of the Act. 34 34 15 U.S.C. 78f(h)(3)(J). Block trades are entered in CBOE *direct* ® by OneChicago's operations management after they are reported by designated individuals at the Clearing Member for the selling party. Similar procedures apply to the exchange of futures for physical (“EFP”) transactions. Since block trades and EFP transactions involve orders that cannot be immediately entered into either CBOE's or CME's systems, the Clearing Members or, if applicable, Exchange Members or Access Persons involved must comply with the relevant OneChicago policy and procedures regarding these transactions. Section 6(h)(3)(K) of the Act 35 requires that a market on which an SFP is traded have in place procedures to coordinate trading halts between such market and any market on which any security underlying an SFP is traded and other markets on which any related security is traded. OneChicago believes that it continues to meet this requirement through OneChicago Rule 419, which requires that trading in a security future be halted at all times that a regulatory halt has been instituted for the relevant underlying security or securities. 35 15 U.S.C. 78f(h)(3)(K). Section 6(h)(3)(L) of the Act 36 requires that the margin requirements for an SFP comply with the regulations prescribed pursuant to section 7(c)(2)(B) of the Act. 37 OneChicago believes that its current Rule 515 continues to fulfill this requirement. 38 36 15 U.S.C. 78f(h)(3)(L). 37 15 U.S.C. 78g(c)(2)(B). 38 Securities Exchange Act Release No. 46787 (November 7, 2002), 67 FR 69059 (November 14, 2002) (SR-OC-2002-01); Securities Exchange Act Release No. 47810 (May 7, 2003), 68 FR 26369 (May 15, 2003) (SR-OC-2003-05); Securities Exchange Act Release No. 50115 (July 29, 2004), 69 FR 48261 (August 9, 2004) (SR-OC-2004-01). 2. Statutory Basis OneChicago believes that the proposed rule change is consistent with section 6(b)(5) of the Act 39 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. OneChicago further believes that the proposed changes would promote competition and are designed to protect investors and the public interest by permitting investors to use new, competitive, and innovative products for hedging and speculative purposes. 39 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition OneChicago believes that the proposed rule change would not unduly burden competition. In fact, OneChicago believes that the proposed rule change would promote competition by permitting OneChicago to list a broader array of futures, without jeopardizing investor protection. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Comments on the proposed rule change have not been solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change has become effective on July 20, 2005. Within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of section 19(b)(1) of the Act. 40 40 15 U.S.C. 78s(b)(1). 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-OC-2005-02 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-OC-2005-02. 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 OneChicago. 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-OC-2005-02 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 41 41 17 CFR 200.30-3(a)(15). Jill M. Peterson, Assistant Secretary. BILLING CODE 8010-01-P EN05AU05.028 EN05AU05.029 [FR Doc. E5-4233 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-C SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52165; File No. SR-PCX-2005-80] Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to the Continuing Education Regulatory Element Requirement July 29, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on July 8, 2005, the Pacific Exchange, Inc. (“PCX” 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 July 13, 2005, the Exchange filed Amendment No. 1 to the proposed rule change. 3 On July 21, 2005, the Exchange filed Amendment No. 2 to the proposed rule change. 4 The PCX has filed the proposal as a “non-controversial” rule change pursuant to section 19(b)(3)(A) of the Act 5 and Rule 19b-4(f)(6) thereunder, 6 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange added language to its rule text to make PCX rules consistent with the rules of the other self-regulatory organizations (“SROs”) and added clarifying language to the purpose section. 4 In Amendment No. 2, the Exchange made minor edits to the rule text and withdrew its request to have the Commission waive the 30 day operative period. The effective date of the original proposed rule change is July 8, 2005, the effective date of Amendment No. 1 is July 13, 2005 and the effective date of Amendment No. 2 is July 21, 2005. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, under Section 19(b)(3)(C) of the Act, the Commission considers such period to commence on July 21, 2005, the date on which the Exchange filed Amendment No. 2. *See* 15 U.S.C. 78s(b)(3)(C). 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The PCX proposes to amend PCX Rule 9.27 to eliminate the “Grandfather” exemption to the regulatory element of the Continuing Education (“CE”) Program. Below is the text of the proposed rule change. Proposed new language is in *italics.* Deletions are in [brackets]. Rules of the Pacific Exchange, Inc. Rule 9 Rule 9.27(a)-(b)—No Change. Rule 9.27(c)—No OTP Firm or OTP Holder shall permit any registered person to continue to, and no registered person shall continue to, perform duties as a registered person, unless such person has complied with the continuing education requirements of this Rule 9.27(c). Each registered person shall complete the Regulatory Element of the continuing education program beginning with the occurrence of their second registration anniversary date, and every three years thereafter, or as otherwise prescribed by the Exchange. On each occasion, the Regulatory Element must be completed within one hundred twenty days after the person's registration anniversary date. A person's initial registration date, *also known as the “base date”* , shall establish the cycle anniversary dates for purposes of this Rule. The content of the Regulatory Element of the program shall be determined by the Exchange for each registration category of persons subject to the Rule.

(1)*Reserved.* [Persons who have been continuously registered for more than ten years as of the effective date of this Rule are exempt from the requirements of this rule relative to participation in the Regulatory Element of the continuing education program, provided such persons have not been subject to any disciplinary action within the last ten years as enumerated in subsection (c)(3)(i)-(ii) of this Rule. However, persons delegated supervisory responsibility or authority pursuant to Rule 9.8 and registered in such supervisory capacity are exempt from participation in the Regulatory Element under this provision only if they have been continuously registered in a supervisory capacity for more than 10 years as of the effective date of this Rule and provided that such supervisory person has not been subject to any disciplinary action under subsection (c)(3)(i)-(ii) of this Rule. In the Event that a registered person who is exempt from participation in the Regulatory Element subsequently becomes the subject of a disciplinary action as enumerated in subsection (c)(3)(i)-(ii), such person shall be required to satisfy the requirements of the Regulatory Element as if the date the disciplinary action becomes final is the person's initial registration anniversary date.]

(2)Failure to Complete—Unless otherwise determined by the Exchange, any registered persons who have not completed the Regulatory Element of the program within the prescribed time frames will have their registration deemed inactive until such time as the requirements of the program have been satisfied. Any person whose registration has been deemed inactive under this Rule shall cease all activities as a registered person and shall be prohibited from performing any duties and functioning in any capacity requiring registration. The Exchange may, upon application and a showing of good cause, allow for additional time for a registered person to satisfy the program requirements.

(3)*Disciplinary Actions* [Re-entry into Program]—Unless otherwise determined by the SRO, a registered person will be required to [re-enter] *re-take* the Regulatory Element and satisfy all of its requirements in the event such person:

(A)becomes subject to any statutory disqualification as defined in Section (3)(a)(39) of the Securities Exchange Act of 1934;

(B)becomes subject to suspension or to the imposition of a fine of $5,000 or more for violation of any provision of any securities law or regulation, or any agreement with or rule of standard of conduct of any securities governmental agency, securities self-regulatory organization, or as imposed by any such regulatory or self-regulatory organization in connection with a disciplinary proceeding; or

(C)is ordered as a sanction in a disciplinary action to [re-enter] *re-take* the [continuing education program] *Regulatory Element* by any securities governmental agency or securities self-regulatory organization. [Re-entry into the program] *A re-taking of the Regulatory Element* shall commence with [the initial] participation within 120 days of the registered person becoming subject to the statutory disqualification, in the case of ([i] *A* ) above, or the disciplinary action becoming final, in the case of ([ii] *B* ) or ([iii] *C* ) above. *The date that the disciplinary action becomes final will be deemed the person's new base date for purposes of this Rule.* Rule 9.27(d)—Commentary .02—No Change. Commentary .03—Any registered person who has terminated association with a registered broker or dealer and who has, within two years of the date of termination, become reassociated in a registered capacity with a registered broker or dealer shall participate in the Regulatory Element of the continuing education program at such intervals that apply (second registration anniversary and every three years thereafter) based on the [initial registration anniversary] *new base* date, rather than based on the date of reassociation in a registered capacity. Any former registered person who becomes reassociated in a registered capacity with a registered broker or dealer more than two years after termination as such will be required to satisfy the program's requirements in their entirety based on the most recent registration date. Commentary .05— *Reserved.* [The effective date of this Rule, for the purposes of determining whether a registered person is exempt from participation in the Regulatory Element is September 14, 2000.] *Commentary .06—Any registered member who is an OTP Holder who is also a member of another self-regulatory organization (“SRO”) shall be subject to the other SRO's implementation date for the elimination of the exceptions to the Regulatory Element section of the continuing education program, if that date is earlier than September 30, 2005.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change, as amended, and discussed any comments it received on the proposed rule change, as amended. The text of these statements may be examined at the places specified in item IV below. The PCX has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend PCX Rule 9.27 to eliminate all exemptions from the Exchange Continuing Education Regulatory Element Program for registered representatives to conform its PCX Rule 9.27 with applicable rules of other SROs. Currently PCX Rule 9.27 sets forth the rules governing the requirements for registered representatives to participate in the Continuing Education Regulatory Element Program (the “Regulatory Element”). 7 The Regulatory Element is a computer-based education program administered by the National Association of Securities Dealers (“NASD”) to help ensure that registered persons are kept up-to-date on regulatory, compliance and sales practices in the industry. PCX Rule 9.27 specifies the Continuing Education (“CE”) requirements for registered persons subsequent to their initial qualification and registration with the PCX. Unless exempt, each registered person is required to complete the Regulatory Element within 120 days after the person's second anniversary date and, thereafter within 120 days after every third registration anniversary date. There are three Regulatory Element programs: the S201 Supervisor Program for registered principals and supervisors, the S106 Series 6 Program for Series 6 representatives, and the S101 General Program for Series 7 and all other registrations. 7 The Continuing Education Program also has a “Firm Element.” *See* PCX Rule 9.27(d). The Exchange Firm Element of the Continuing Education Program applies to any person registered with an NASD member firm who has direct contact with customers in the conduct of the member's securities sales, trading and investment banking activities, any person registered as a research analyst pursuant to NASD Rule 1050, and to the immediate supervisors of such persons (collectively called “covered registered persons”). The requirement stipulates that each member firm must maintain a continuing and current education program for its covered registered persons to enhance their securities knowledge, skill and professionalism. Each firm has the requirement to annually conduct a training needs analysis, develop a written training plan, and implement the plan. According to the NASD, approximately 135,000 registered persons are exempt from the Regulatory Element. These include registered persons who, when the Continuing Education Program was adopted in 1995, had been registered for at least ten years and who did not have a significant disciplinary action 8 in the CRD record for the previous ten years (so-called “grandfathered” persons). These also include those persons who had “graduated” from the Regulatory Element by satisfying their tenth anniversary requirement before July 1998, when PCX Rule 9.27 was amended and the graduation provision eliminated, and who did not have a significant disciplinary action in their CRD record for the previous ten years. 9 8 For purposes of PCX Rule 9.27(c), a significant disciplinary action generally means a statutory disqualification, a suspension or imposition of a fine of $5,000 or more, or being subject to an order from a securities regulator to re-take the Regulatory Element. *See* PCX Rule 9.27(c)(3). 9 When PCX Rule 9.27 was first adopted in 1995, the Regulatory Element required registered persons to satisfy the Regulatory Element on the second, fifth, and tenth anniversary of their initial securities registration. After satisfying the tenth anniversary requirement, a person was “graduated” from the Regulatory Element. A graduated person who was not a principal re-entered if he or she acquired a principal registration or incurred a significant disciplinary action. At its December 2003 meeting, the Securities Industry/Regulatory Council on Continuing Education (“Council”) discussed the current exemptions from the Regulatory Element and agreed unanimously to recommend that the SROs repeal the exemptions and require all registered persons to participate in the Regulatory Element. In reaching this conclusion, the Council was of the view that there is great value in exposing all industry participants to the benefits of the Regulatory Element, in part because of the significant regulatory issues that have emerged over the past few years. The Regulatory Element programs include teaching and training content that is continuously updated to address current regulatory concerns as well as new products and trading strategies. Exempt persons presently do not have the benefit of this material. In addition, the Council will introduce a new content module to the Regulatory Element programs that will specifically address ethics and will require participants to recognize ethical issues in given situations. Participants will be required to make decisions in the context of, for example, peer pressure, the temptation to rationalize, or a lack of clear-cut guidelines from existing rules or regulations. The Council strongly believes that all registered persons, regardless of their years of experience in the industry, should have the benefit of this training. Consistent with the Council's recommendation, the proposed rule change, as amended, would eliminate the current Regulatory Element exemptions. The other SRO members of the Council also support eliminating the exemptions and either have already or are pursuing amendments to their respective rules. The effective date of the proposed rule change, as amended, will be September 30, 2005. 10 PCX will announce the effective date of the proposed rule change in the PCX Weekly Bulletin following the effective date of the proposed rule, as amended. 10 To eliminate any confusion, the Exchange has confirmed in the proposed rule change that an Exchange participant who is also a member of another SRO must comply with the rules of the other SRO which eliminated these exceptions as of an earlier date. *See* Securities Exchange Act Release Nos. 50404 (September 16, 2004), 69 FR 57126 (September 23, 2004); 50456 (September 27, 2004), 69 FR 59285 (October 4, 2004); 50630 (November 3, 2004), 69 FR 65232 (November 10, 2004); and 50651 (November 10, 2004) 69 FR 67374 (November 17, 2004). Moreover, following the effective date of the proposed rule change, as amended, implementation will be based on the application of the existing requirements of the Regulatory Element to all registered persons. The way in which the Web Central Registration Depository (“Web CRD”), which is administered by the NASD, applies these requirements is as follows. Web CRD establishes a “base date” for each registered person and calculates anniversaries from that date. Usually, the base date is the person's initial securities registration. However, the base date may be revised to be the effective date of a significant disciplinary action in accordance with PCX Rule 9.27 or the date on which a formerly registered person re-qualifies for association with a PCX OTP Holder or OTP Firm by qualification exam. Using the base date, Web CRD creates a Regulatory Element requirement on the second anniversary of the base date and then every three years thereafter. Registered persons formerly exempt from the Regulatory Element requirement must satisfy this requirement that occurs on an anniversary on or after the effective date of the proposed rule change, as amended. It is noted that a person's base date may be revised to be the effective date of a significant disciplinary action in accordance with PCX Rule 9.27. The Exchange proposes to amend PCX Rule 9.27 to clarify that a person subject to a significant disciplinary action would be required to “re-take” rather than “re-enter” the Regulatory Element. 11 A person's base date may also be revised to be the date on which a formerly registered person re-qualifies for association with an OTP Holder or OTP Firm. 11 This requirement would apply to all registered persons that are subject of a significant disciplinary action, and not only to currently exempt persons. 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with section 6(b) 12 of the Act, in general, and furthers the objectives of section 6(b)(5), 13 in particular, in that it is designed to facilitate transactions in securities, to promote just and equitable principles of trade, to foster competition, and to protect investors and the public interest. The Exchange believes that the proposed rule change is designed to accomplish these ends by ensuring that all registered persons are kept up-to-date on industry rules, regulations, and practices. 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(5). Additionally, under section 6(c)(3)(B) of the Act, 14 the Exchange may bar a natural person from becoming a member or person associated with a member, if such natural person does not meet such standards of training, experience, and competence as prescribed by the rules of the Exchange. Pursuant to this statutory obligation, the Exchange is rescinding all exemptions from the requirement to complete the Regulatory Element of the Continuing Education Program as prescribed by Exchange Rule 9.27. 14 15 U.S.C. 78f(c)(3)(B). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change, as amended:

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

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

(3)does not 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, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act 15 and Rule 19b-4(f)(6) thereunder. 16 15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6) also requires that the exchange give the Commission 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 the proposed rule change. The Exchange satisfied this requirement. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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-PCX-2005-80 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-PCX-2005-80. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal offices of the PCX. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-PCX-2005-80 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4224 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52175; File No. SR-Phlx-2005-26] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Amendments to the Exchange's Trade-Through and Locked Markets Rules July 29, 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 26, 2005, the Philadelphia Stock Exchange, Inc. (“Phlx”) 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 Phlx. On July 21, 2005, the Phlx filed 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 *See* Form 19b-4 dated July 21, 2005 (“Amendment No. 1”). In Amendment No. 1, the Phlx revised the rule text to use terms consistent with Phlx's current rules and to be consistent with the language of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage, and made clarifying changes in the description of the substance of the proposed rule change and the purpose of statutory basis sections. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to amend two of its rules relating to the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (“Plan”). 4 Specifically, Phlx Rule 1083(t) concerning the definition of “Trade-Through” would be amended to reflect that a Participant in the Plan (“Participant Exchange”) 5 may trade an order at a price that is one-tick inferior to the National Best Bid or Offer (“NBBO”) if a Linkage Order 6 is transmitted to the Participant Exchange(s) that are disseminating the NBBO to satisfy all interest at the NBBO price (“trade and ship”). 4 *See* Securities Exchange Act Release Nos. 44482 (June 27, 2001), 66 FR 35470 (July 5, 2001) (Amendment to Plan to Conform to the Requirements of Securities Exchange Act Rule 11Ac1-7); 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000) (Order approving the Phlx as a Participant in the Plan); and 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000) (Approval of the Plan). 5 Phlx Rule 1083(o) defines a “Participant Exchange” as a registered national securities exchange that is a party to the Plan. 6 The term “Linkage Order” means an Immediate or Cancel order routed through the Linkage as permitted under the Plan. There are three types of Linkage Orders:

(i)“Principal Acting as Agent (“P/A”) Order,” which is an order for the principal account of a specialist (or equivalent entity on another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent;

(ii)“Principal Order,” which is an order for the principal account of an Eligible Market Maker and is not a P/A Order; and

(iii)“Satisfaction Order,” which is an order sent through the Linkage to notify a member of another Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that Trade-Through. *See* Phlx Rule 1083(k). The Phlx further proposes to amend Phlx Rule 1086, Locked and Crossed Markets, to provide that the rule requiring an Eligible Market Maker 7 or a member other than an Eligible Market Maker, that locks or crosses a market to unlock/uncross the market does not apply to the situation where an Eligible Market Maker or a member other than an Eligible Market Maker, books an order that would lock a market and contemporaneously sends through the Linkage 8 a P/A Order or Principal Order to such other market for the full size of the bid or offer that was locked (“book and ship”). The text of the proposed rule change is available on the Phlx's Web site ( *http://www.phlx.com* ), at the Phlx's Office of the Secretary, and at the Commission's Public Reference Room. 7 Phlx Rule 1083(e) defines an “Eligible Market Maker” as, with respect to an Eligible Option Class, a specialist or Registered Options Trader (“RoT”) that:

(i)Is assigned to, and is providing two-sided quotations in, an Eligible Option Class;

(ii)is in compliance with the requirements of Rule 1087 (concerning the limitation on Principal Order access);

(iii)is participating in the Exchange's AUTOM system in such Eligible Option Class; and

(iv)has a clearing arrangement with a clearing firm that is a member of the exchange to which such specialist or ROT sends a Linkage Order. 8 Phlx Rule 1083(j) defines “Linkage” as the systems and data communications network that link electronically the Participant Exchanges for the purposes specified in the Plan. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Phlx included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item IV below. The Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to provide that

(i)a Participant Exchange may trade an order at a price that is one-tick inferior to the NBBO provided a Linkage Order is contemporaneously transmitted to the NBBO market(s) to satisfy all interest at the NBBO price; and

(ii)an Eligible Market Maker or a member other than an Eligible Market Maker may book an order that would lock a market if a Linkage Order is sent contemporaneously through the Linkage for the full size of the bid or offer that was locked. i. Trade and Ship The proposed amendment to Phlx Rule 1083(t) would exclude the trade and ship concept from the definition of “Trade-Through.” 9 Under trade and ship, any execution received from the NBBO market must (pursuant to agency obligations) be reassigned to the customer order that is underlying the Linkage Order that was transmitted to “take out” the NBBO market. 9 “Trade-Through” means a transaction in an options series at a price that is inferior to the NBBO. *See* Phlx Rule 1083(t). *Trade and Ship Example.* Participant Exchange A is disseminating an offer of $2.00 for 100 contracts. Participant Exchange B is disseminating the national best offer of $1.95 for 10 contracts. No other market is at $1.95. Participant Exchange A receives a 100-contract customer buy order to pay $2.00. Under this proposal, Participant Exchange A could execute 90 contracts (or 100 contracts) of the customer order at $2.00 provided Participant Exchange A simultaneously transmits a 10-contract P/A Order to Participant Exchange B to pay $1.95. Assuming an execution is obtained from Participant Exchange B, the customer would receive an execution to buy 10 contracts at $1.95 and 90 contracts at $2.00 (if the customer order was originally filled in its entirety at $2.00, an adjustment would be required to provide the customer with the $1.95 price for 10 contracts reflecting the P/A Order execution). Under this proposal, this would not be deemed a Trade-Through. ii. Book and Ship Currently, Phlx Rule 1086, Locked and Crossed Markets, requires an Eligible Market Maker or a member other than an Eligible Market Maker that creates a locked market or a crossed market to unlock or uncross the market. The proposed amendment to Phlx Rule 1086 would provide that the provisions of this rule relating to locked markets would not apply in situations where an Eligible Market Maker or a member other than an Eligible Market Maker books an order that would lock a market and contemporaneously sends through the Linkage a P/A Order or Principal Order for the full size of the bid or offer that was locked. *Book and Ship Example.* Participant Exchange A is disseminating a $1.85-$2.00 market. Participant Exchange B is disseminating a $1.80-$1.95 market. The $1.95 offer is for 10 contracts. No other market is disseminating an offer of $1.95. Participant Exchange A receives a customer order to buy 100 contracts at $1.95. Under this proposal, Participant Exchange A could book 90 contracts of the customer buy order at $1.95 provided Participant Exchange A simultaneously transmitted a 10-contract P/A Order to Participant Exchange B to pay $1.95. Assuming an execution is obtained from Participant Exchange B, the customer would receive an execution to buy 10 contracts and the rest of the customer's order will be displayed as a $1.95 bid on Participant Exchange A. The national best offer would likely be $2.00. As proposed, this would not be deemed a “locked” market for purposes of the Plan. 2. Statutory Basis The Phlx believes that the proposed rule change is consistent with section 6(b) of the Act 10 in general, and furthers the objectives of section 6(b)(5) of the Act 11 in particular, in that the proposed rule change is designed to perfect the mechanism of a free and open market and a national market system, protect investors and the public interest, and promote just and equitable principles of trade. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Phlx does not believe that the proposed rule change will impose any inappropriate burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

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

(ii)as to which the Phlx 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-Phlx-2005-26 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-Phlx-2005-26. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2005-26 and should be submitted on or before August 26, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4229 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-52140; File No. SR-Phlx-2005-31] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Priority in Trades Involving Synthetic Option Orders July 27, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 , and Rule 19b-4 2 thereunder, notice is hereby given that on April 29, 2005, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in items I and II, below, which items have been prepared by Phlx. On June 10, 2005, Phlx filed Amendment No. 1 to the proposed rule change. 3 On July 15, 2005, Phlx filed Amendment No. 2 to the proposed rule change. 4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons and is approving the proposed rule change, as amended, on an accelerated basis, for a pilot period expiring on December 31, 2005. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, the Exchange made a technical change to the filing. 4 Amendment No. 2 replaced the original filing in its entirety. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Phlx proposes to amend Phlx Rule 1033(e) to afford priority to synthetic option orders 5 traded in open outcry over bids and offers in the trading crowd but not over bids and offers of public customers on the limit order book and not over crowd participants willing to participate in the synthetic option order at the net debit or credit price. The proposed rule change, as amended, would apply to orders for 100 contracts or more and would be subject to a pilot program expiring on December 31, 2005. The text of the proposed rule change is set forth below. *Italics* indicate new text: 5 Phlx Rule 1066(g) defines a synthetic option order as an order to buy or sell a stated number of option contracts and buy or sell the underlying stock or Exchange-Traded Fund Share in an amount that would offset (on a one-for-one basis) the option position. For example:

(1)Buy-write: an example of a buy-write is an order to sell one call and buy 100 shares of the underlying stock or Exchange-Traded Fund Share.

(2)Synthetic put: an example of a synthetic put is an order to buy one call and sell 100 shares of the underlying stock or Exchange-Traded Fund Share.

(3)Synthetic call: an example of a synthetic call is an order to buy (or sell) one put and buy (or sell) 100 shares of the underlying stock or Exchange-Traded Fund Share. Bids and Offers—Premium Rule 1033. (a)-(d) No change.

(e)Synthetic Option Orders. When a member holding a synthetic option order, as defined in Rule 1066, and bidding or offering on the basis of a total credit or debit for the order has determined that the order may not be executed by a combination of transactions at or within the bids and offers established in the marketplace, then the order may be executed as a synthetic option order at the total credit or debit with one other member, provided that, the member executes the option leg at a better price than the established bid or offer for that option contract, in accordance with Rule 1014. *Subject to a pilot expiring December 31, 2005, synthetic option orders in open outcry, in which the option component is for a size of 100 contracts or more, have priority over bids (offers) of crowd participants who are bidding (offering) only for the option component of the synthetic option order, but not over bids (offers) of public customers on the limit order book, and not over crowd participants that are willing to participate in the synthetic option order at the net debit or credit price.* (f)-(i) 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, Phlx included statements concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in item III below. Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Phlx proposes to amend rules that would facilitate the execution of synthetic option orders 6 that are represented in the crowd, which the Exchange believes may be difficult to execute without a limited exception to current Exchange priority rules by virtue of the stock component. Currently, Phlx Rule 1033(e) provides that if an Exchange member holding a synthetic option order and bidding or offering on a net debit or credit basis determines that such synthetic option order cannot be executed at the net debit or credit against the established bids and offers in the crowd, such Exchange member may execute the synthetic option order with one other crowd participant, provided that the option portion of the synthetic option order is executed at a price that is better than the established bid or offer for the option. Thus, if the desired net debit or credit amount cannot be achieved by way of executing against the established bids and offers in the crowd, the member may elect to trade at the desired net debit or credit amount with one other member, provided that there is price improvement for the option component of the synthetic option order. 6 *Id.* The Exchange proposes to amend Phlx Rule 1033(e) to afford synthetic option orders priority over bids or offers of the trading crowd but not over bids or offers of public customers on the limit order book and not over crowd participants that are willing to participate in the synthetic option order at the net debit or credit price. The effect of the proposal is that a crowd participant bidding or offering for the synthetic option order would have priority over other crowd participants that are bidding or offering only for the option component of the order. Currently, such crowd participant does not have such priority. The proposal would apply only to synthetic option orders of 100 contracts or more. In addition, the proposal provides that Exchange members bidding and offering for synthetic option orders of 100 contracts or more would not have priority over bids and offers of public customers on the limit order book. 7 Therefore, if Exchange members of the trading crowd wish to trade a synthetic option order that is marketable against public customer orders on the limit order book, public customers would have priority. Multiple public customer orders at the same price would be accorded priority based on time. 7 *See* Phlx Rule 1080, Commentary .02. The Exchange believes that the proposed rule change, as amended, providing a limited exception to the Exchange's priority rules only with respect to controlled accounts 8 competing at the same price, should enable Phlx Floor Brokers representing synthetic option orders to provide best executions to customers placing such orders. The Exchange also believes that the proposed rule change, as amended, should enable the Exchange to provide liquid markets and compete for order flow in such orders. 8 A controlled account includes any account controlled by or under common control with a broker-dealer. Customer accounts are all other accounts. Orders of controlled accounts are required to yield priority to customer orders when competing at the same price. Orders of controlled accounts generally are not required to yield priority to other controlled account orders. *See* Phlx Rule 1014(g)(i)(A). As stated above, the proposed rule change would apply only to synthetic option orders in which the option component is for a size of 100 contracts or more that are represented in the trading crowd in open outcry, and would be subject to a pilot program expiring on December 31, 2005. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(5) of the Act 10 in particular, in that it is designed to perfect the mechanisms of a free and open market and the national market system, protect investors and the public interest and promote just and equitable principles of trade, by adopting a limited exception to the Exchange's priority rules concerning synthetic option orders. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Phlx-2005-31 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-Phlx-2005-31. 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 Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2005-31 and should be submitted on or before August 26, 2005. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, 11 and, in particular, with the requirements of section 6(b) of the Act 12 and the rules and regulations thereunder. The Commission finds that the proposed rule change, as amended, is consistent with section 6(b)(5) of the Act, 13 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market, and to protect investors and the public interest. The Commission notes that the priority rules with respect to the execution of synthetic option orders on other options exchanges are similar to the Phlx's proposed rule change. 14 In general, such rules serve to reduce the risk of incomplete or inadequate executions of synthetic option orders by allowing the synthetic option orders to have priority over bids and offers of crowd participants who are bidding or offering only for the option component of the synthetic option order but only subject to restrictions such as those proposed by Phlx. For example, the proposed rule change would continue to protect the priority of public customer orders on the limit order book. In addition, Phlx's proposed rule change protects the priority of crowd participants who are willing to participate in the synthetic option order at the net debit or credit price. 11 In approving this rule, the Commission notes that it has considered its impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(5). 14 *See, e.g.* , Securities Exchange Act Release Nos. 20294 (October 17, 1983), 48 FR 49114 (October 24, 1983) (approving SR-CBOE-83-4); 47959 (May 30, 2003), 68 FR 34441 (June 9, 2003) (approving SR-CBOE-2002-05); 44955 (October 18, 2001), 66 FR 53819 (October 24, 2001) (approving SR-ISE-2001-18); and 46646 (October 11, 2002), 67 FR 64428 (October 18, 2002) (approving SR-ISE-2002-20). The Commission finds good cause, pursuant to section 19(b)(2) of the Act, 15 for approving the proposed rule change, as amended, prior to the thirtieth day after the date of publication of the notice of the filing thereof in the **Federal Register** . The Commission notes that the proposed rule change is similar to Chicago Board Options Exchange Rule 6.45A(b)(iii) and International Stock Exchange Rule 722, 16 which were previously approved by the Commission after notice and comment, and therefore does not raise any new regulatory issues. 15 15 U.S.C. 78s(b)(2). 16 *See supra* note 14. V. Conclusion *It is therefore ordered* , pursuant to section 19(b)(2) of the Act 17 that the proposed rule change, as amended (SR-Phlx-2005-31), is hereby approved on an accelerated basis for a pilot period to expire on December 31, 2005. 17 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 18 18 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E5-4231 Filed 8-4-05; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION Notice of Senior Executive Service Performance Review Board Membership Title 5, U.S. Code, section 4314(c)(4) of the Civil Service Reform Act of 1978, Public Law 95-454, requires that the appointment of Performance Review Board members be published in the **Federal Register** . The following persons will serve on the Performance Review Board which oversees the evaluation of performance appraisals of Senior Executive Service members of the Social Security Administration. Nancy Berryhill*, Nicholas M. Blatchford, Michael G. Gallagher, Rogelio Gomez, Myrtle S. Habersham, Nancy A. McCullough, Gregory Pace*, Ronald Raborg*, Donna Siegel*, Felicita Sola-Carter, Thomas J. Tobin, Manuel Vaz, and Alice H. Wade. * New Member Dated: July 28, 2005. Reginald F. Wells, Deputy Commissioner for Human Resources. [FR Doc. 05-15499 Filed 8-4-05; 8:45 am]

Notices. SECURITIES AND EXCHANGE COMMISSION